In essence, a trademark is a way of distinguishing similar goods by the brand name. It can be a combination of numbers, colours, signatures, names, or devices. It is very expensive for companies to establish their brand value by advertising and designing their products. As per the Trade Marks Act, 1999 and accompanying Rules of 2017, the same can be transferred like any other property.
Assignment v/s Licensing
Assigning Trademarks involves transferring ownership of the Trademark to the buyer, whether the trademark has goodwill attached or not.
Generally, licensing refers to transferring a trademark to a third party for the limited purpose of allowing him to use the trademark (within the terms of the agreement entered upon) without transferring ownership. By using the appeal of the Trademark, the Licensor (owner of the Trademark) usually generates loyalties, while the Licensee gets to expand his business.
Types of Assignment
Assignment in trademark under the Act can take the following forms:
- Complete Assignment:
In addition to a complete transfer of ownership, the buyer is empowered to sell the Trademark at a later time if he so desires.
- Partial Assignment:
Purchasers of these products or services receive only restricted ownership rights.
III. Assignment with Goodwill:
This type of assignment transfers ownership of the product and service rights and values associated with the trademark. Goodwill is an easy to describe but difficult to define concept that refers to the intangible value of a trade mark.
- Assignment without Goodwill:
A buyer is not permitted to use the trademark for the same product or service as the owner. Trademark ownership, excluding goodwill, remains transferable. As the goodwill associated with a product will not be transferred, the buyer may use the purchased Trademark for products other than those already manufactured by the original owner.
For the sake of preventing confusion among the public and users, certain restrictions apply to the assignment of registered trademarks.
- Generally, trademark assignments end up causing exclusive rights to be held by more than one person, resulting in production of similar goods or services, or those that are associated with each other.
- There is a restriction on assigning a trademark to multiple people at the same time in different parts of the country.
The following should be included in an assignment deed:
- Registering a trademark requires matching the owner’s name with the records at the Registry.
- It is important to explicitly state specific details about the trademark, such as its territorial extent, to prevent any ambiguity
- If there is no transfer of goodwill, it needs to be specifically stated.
- It is necessary to specify the date of the assignment.
Process with the Registry
As a result of Rule 75 of the Trademark Rules, 2017, Form TM-P should be submitted to the Trademark Registry when ownership changes are made. The registration fee is flat at Rs.9,000 for E-Filings and Rs.10,000 for Physical Filings. As a result, the assignment process has been streamlined and simplified.
As a measure of a company’s popularity and reputation in the market, trademarks are valuable assets. Therefore, organizations tend to buy them instead of investing a lot of resources and time into building their own brand. Assignment deeds should be made with care otherwise, they might become a basis for litigation for the buyer. They are advantageous for the buyer since a customer base is handed over with minimal effort.