Trademark Assignment Online - Process, Documents, Benefits, Cost

What is Trademark Assignment / Trademark Transfer?

According to the Trade Marks Act, 1999, a Trademark Assignment is the transfer of the ownership of a trademark to another person. This assignment involves all material rights associated with the mark, including:

• Right to use the trademark : the new owner is allowed to use the marks with regards to their goods or services.
• Right to license the trademark : the new owner has the right to grant other persons the right to use the marks.
• Right to sue for infringement : all profit on the mark belongs to the new owner.
• Right to earn profits or royalties : any income from the mark now belongs to the new owner.

The assignee is the legal owner of the trademark once the assignment is signed and registered with the Trademark Registry.

Difference Between Assignment, Licensing, Transmission & Ownership Transfer

In order to be more precise, the following are the main differences:

1. Assignment

• A full or partial assignment of a trademark to a different party.
• The assignor loses any rights allocated and the assignee acquires the rights to become the new owner.

2. Licensing

• Licence does not involve ownership.
• The owner will not pass the ownership of the trademark but will permit another person to use it under certain terms and conditions.

3. Transmission

• An operation of law rather than a contract change of ownership of trademarks.
• This occurs when there is a bankruptcy, inheritance, or succession.

4. Ownership Transfer

• A wider meaning that encompasses any change of ownership, assignment, merger, re-structuring of the business and inheritance.
• One type of ownership transfer is assignment.

Key Sections governing Trademark Assignment in India

Section 37 to 45 of the Trade Marks Act, 1999 provide the principles of assigning and transferring trademarks.

Key provisions include:

• Section 37 : Allows the trademark holder the right to assign or transfer their trademark.
• Section 38 : Allows a free assignment of registered trademarks not to the extent of the Act.
• Section 39 : The assignment of unregistered trademarks is also allowed.
• Sections 40–42 : Impose limitations on assignment that can lead to confusion, multiple ownership in same goods/services or misleading the masses.
• Section 45 : States that the assignment should be registered by the Registrar in order to be said to be valid and enforceable.

All these provisions explain the conditions under which a trademark can be transferred in India, and how and when a transfer can be done.

Trademark Rules (TM-P, TM-23, TM-24)

Under the Trade Marks Rules, a change in ownership of a trademark is recorded under certain forms:

• Form TM-P : The main form of recording the assignment or transmission of a registered trademark.
• TM-23 / TM-24 : Older or special forms used in specific situations, e.g. in cases where the assignment is not made in good faith or in cases where old applications should be updated.

Such forms make sure that the correct legal owner is recorded in the Trademark Register and thus the assignment is valid and enforceable.

Common Situations Requiring Trademark Transfer

Sale of a Business

In the event of a business or brand being sold, its trademarks should be transferred to the buyer to ensure that the new owner obtains all legal rights and continuity.

Merger, Amalgamation, or Corporate Restructuring

Trademarks are also exchanged during mergers or restructuring and handed over to the surviving business or the new company as part of the business assets.

Death or Inheritance

In case of the death of a trademark owner, the rights are transferred directly to the legal heirs, and they may further use the mark or transfer all the rights.

Sale of a Brand or Product Line

In the situations when a company sells a certain brand or a certain section of a product, there is a need to transfer the trademark partially or in part.

Partner Exit or Retirement

When one partner drops out of a business, they may assign their rights on the trademark to the rest of the partners.

Internal Business Reorganization

Corporations transfer assets among group members such as relocating assets to a subsidiary. Such a case requires a formal assignment of a trademark to change the legal ownership.

Types of Trademark Assignment in India

1. Complete (Full) Assignment

In full assignment, all rights of the trademark are assigned to the new owner.
This covers ownership, right to use the mark, right to license and right to infringement suit.
Once this transfer has occurred, the former owner is left with no rights in the trademark.

2. Partial / Segmental Assignment

Under this type, the trademark is registered to apply to particular goods, services, classes or regions.
Example: The owner licenses the trademark only on cosmetics and reserves the rights on the skincare.

3. Assignment With Goodwill

The assignee receives:

• The trademark
• The customers associated with the mark.
• The reputation and brand value, goodwill.

This is the most common and straightforward form of assignment.

4. Assignment Without Goodwill

It is also called a gross assignment.
In this case, the trademark changes owner, yet the original owner retains goodwill of the business in existence.
The assignee is allowed to use the mark with new, different or unrelated goods/services.
Advertisements of such assignments should be done to avoid confusion with the public.

Advantages of Trademark Assignment

1. Intellectual Property (IP) / Brand Monetization.

Transfer or sale of trademarks gives its owner the right to earn money out of it.
It helps to convert an important IP asset into direct revenue.

2. Clear and Smooth Business Sale.

In cases where a business is sold, it is important to assign a trademark to the buyer to get the full rights of using the brand.
In the absence of proper assignment, the buyer can experience legal or operational issues, which can result in conflicts.

3. Avoidance of ownership conflict and Legal Clarity

The legal owner is well-documented and registered by means of trademark assignment, which eliminates any disagreements, unauthorized use, and infringement claims and is more convenient to license or franchise in the future.

4. Flexible Transfer Options

The flexibility of assignment can be used in such a manner that the owner may assign the rights of certain goods, classes, or jurisdictions, and retain the rights of other product lines.

Limitations and Restrictions on Trademark Assignment.

The Trade Marks Act of 1999, Section 40-42 prohibitions certain assignments to avoid confusion or misuse of assignment. These include:

• Assignments where several individuals have exclusive rights to the same trademark of the same goods/services.
• Assignments that deceive or misinform the consumer on the origin or quality of goods.
• Assignments without goodwill that are not properly advertised.
• Certification trademarks assignments including those not usually transferable.

These regulations contribute towards preserving the correct usage and reliability of trademarks.

Cost of Trademark Assignment

Typically the total amount of a trademark assignment consists of:

• Government filing fee to register the assignment with the Trademark Registry by filing Form TM-P.
• There are Professional drafting fees in order to prepare a legally sound trademark assignment deed.
• Stamp duty, which should be paid following the provisions of the state where the assignment deed is signed.

All these elements constitute the overall price of the trademark assignment.

Time Taken for Trademark Assignment

Assignment of trademarks normally requires the Registrar to examine documentations in about 3-6 months before the ownership record is revised. Merger or inheritance assignments can be handled faster due to the simplicity of the legal documents.

Documents Required for Trademark Assignment.

1. Assignment Deed

An agreement in writing with signature which provides the terms of the transfer, the assignment of rights, consideration and date of transfer.
In the absence of this deed the Registrar will not update the ownership.

2. Trademark Certificate / Application Details

Contains registration certificate or application number, class and description of goods/services.
These are the information that assists the Registrar to determine the specific mark that is being allocated.

3. ID Proofs of Both Parties

PAN, Aadhaar, Passport, or company KYC papers were needed to prove the identity and legality of the assignor and assignee.

4. Board Resolution (For Companies)

A written consent of the board of the company that the trademark can be transferred or accepted.

5. Affidavit of No Pending Litigation

The signed statement of the fact that the trademark is not subjected to a dispute or a court case.

6. Power of Attorney (POA)

This is required in the event that an assignment is being filed by a trademark agent or attorney on behalf of the parties.

7. Merger / Amalgamation Documents (Where Necessary)

Other documents like the merger orders or agreements or restructuring papers when the transfer occurs as a result of changes in the corporation.

Step-by-Step Procedure for Trademark Assignment in India

Step 1: Due Diligence

It is a legal process, where a trademark is transferred by a person/company to another. Once assigned the new owner obtains all the rights to use and defend the mark.

Step 2: Negotiation & Finalization of Terms

The assignor and assignee discuss and agree on important points like the value of the transfer, what rights will be transferred, and whether the assignment is with or without goodwill.

Step 3: Drafting & Execution of Assignment Deed

The transfer will be facilitated by a formal document signed and stamped by both parties.

Step 4: Filing Form TM-P / TM-23 / TM-24

The signed deed and the forms necessary are forwarded online to the Trademark Registry in a way that the transfer is registered. Such as:

• Record assignment of registered marks is registered in TM-P.
• TM-23/TM-24 can be used in the case of older or specific cases.
• Registered at the Trademark Registry and charged fees.

Step 5: Registrar Examination

The Registrar verifies the documents, Deed details, Compliance with the Act details to confirm that everything is in the legal regard and that the transfer does not create any confusion or the Act is not breached.

Step 6: Advertisement of Assignment (If Required)

Where the assignments are made without goodwill, a public advertisement might be needed to avoid confusion among the consumers.

Step 7: Responding to Objections / Oppositions

In the event that the Registrar asks any questions or an individual raises any objection, the new owner will be required to respond and explain the issue.

Step 8: Approval and Update in Records

After all the arrangements have been made, the Registrar updates the official Trademark Register by inserting the name of the new owner.

Step 9: Completion of Transfer & Handover of Rights

Once the update has been done, the rights and benefits of the trademark are transferred in favor of the new owner and the assignment is accomplished.

Conclusion

The transfer of a trademark to a different individual or company is called trademark assignment. It helps to maintain the proper registry of the mark ownership, protect the brand value, and allow the new owner to assert his rights, and reduce the possibility of the court process. In order to transfer, a well written assignment deed with all important terms is required.