In the Trademark Act of 1999, Section 37 outlines what a Trademark Assignment means. It refers to the transfer of ownership of a trademark and a brand mark. This transfer can be either temporary or permanent. It’s a process where the current owner of the trademark hands over ownership, with or without goodwill i.e., assignment of trademark with goodwill or without goodwill to a new registered proprietor. In this blog, we shall specifically see what assignment of trademark with goodwill means.
Understanding the Assignment of Trademark with Goodwill
When an Assignor transfers ownership of a trademark connected with goods or services currently in use by the assignor to the assignee, all associated value, rights, and entitlements are likewise transferred. This includes the assignment of a trademark with goodwill associated with the brand.
The Assignee, upon receiving the assignment of trademark with goodwill, gains the legal right to use the trademark for any products or services. This includes the ability to use the mark for goods or services that were previously provided by the assignor.
This transaction, in which the assignment of trademark with goodwill takes place, is commonly referred to as “Trademark with Business Goodwill.”
Assignment of Trademark without Goodwill
When an Assignor opts to assign a trademark without goodwill, it signifies a transaction in which the Assignor imposes restrictions on the buyer’s rights while transferring the trademark.This type of transaction is commonly referred to as a “Gross Trademark,” emphasizing the absence of goodwill transfer along with the trademark.
Advantages of Assignment of Trademark with Goodwill
There are various advantages that assignment of trademark with goodwill offers, as have been mentioned below:
1. Brand Monetization
One of the key advantages of assignment of trademark with goodwill is the opportunity to monetize your brand. By transferring the trademark to another party, you can realize financial gains and participate in the value generated from the brand you’ve invested time and effort in developing.
2. Easy Brand Development
Trademark assignments benefit not only the assignor but also the assignee. When a trademark with goodwill is transferred, the assignee inherits an established brand without the need to invest in the time and resources required for brand development. This can expedite their entry into the market.
3. Maintenance of Intellectual Property Rights
Trademark registrations require ongoing maintenance to remain current and enforceable. assignment of trademark with goodwill can aid in this process by ensuring that the rights associated with the trademark are preserved and upheld. This serves as a major benefit of assignment of trademark with goodwill.
4. Realizing the Trademark’s Financial Value
Creating a brand is a resource-intensive endeavour, involving significant financial investment, effort, and time. Through trademark assignment, the creator of the trademark can determine and realize the financial worth of their intellectual property, providing a return on their initial investment.
5. Reliable Legal Proof
In the event of disputes or disagreements related to the assignment of a trademark, the assignment agreement serves as legitimate proof. Such agreements effectively secure the legal rights of the registered trademark owner, offering a reliable means of resolving disputes and upholding the integrity of the trademark ownership transfer.
Required Documentation for Trademark Assignment
In the process of trademark assignment, several essential documents are necessary to ensure a legally sound transfer. These documents include:
1. Certificate of Trademark Registration
A certificate proving the registration of the trademark being assigned is a fundamental document to establish the legitimacy of the trademark and its ownership.
2. Details of the Assignor and Assignee
Comprehensive information about both the assignor (current trademark owner) and the assignee (the party receiving the trademark) is vital. This should include evidence of their identity and residence to verify their credentials.
3. Non-Objection Certificate (NOC)
A No-Objection Certificate, commonly referred to as an NOC, is required from the original registered trademark holder, indicating their consent to the assignment. This ensures that the transfer is carried out without any legal objections.
4. Description of Goodwill or Without Goodwill
The type of trademark assignment, whether with or without goodwill, should be explicitly described in the documentation to clarify the nature of the transfer.
5. Copy of Advertisement and Registrar’s Instructions
Including a copy of any advertisements or notices regarding the assignment, as well as any instructions from the registrar’s office, can be crucial for record-keeping and transparency.
6. Witnesses and Signatories
The involvement of witnesses and the signatures of both parties, i.e., the assignor and assignee, are integral to validate the agreement.
7. Notarization
Notarization of the documents ensures their authenticity and legal validity.
8. Proof of Time and Place of Execution
Documentation should include evidence of when and where the assignment agreement was executed. This information helps establish the timeline and location of the transaction.
9. Authority of Attorney
If an attorney is representing either party in the assignment, documentation verifying their authority to act on behalf of the assignor or assignee should be included.
By providing these documents, the trademark assignment process is made transparent, legally binding, and free from potential disputes or challenges.
Requirements for Trademark Assignment Registration
Before registering a trademark assignment, several prerequisites must be met to ensure its validity and legality. These prerequisites include:
1. Written Agreement: The assignment of a trademark must be formalized in a written agreement. This written document is a crucial requirement to establish the transfer.
2. Identifying Parties: The agreement should clearly identify the following parties:
- Assignor: The current trademark owner or the legal owner of the trademark who is transferring the rights.
- Assignee: The purchaser of the trademark or the new owner who is receiving the rights to the trademark.
3. Assignor’s Knowledge and Consent: The assignment must be carried out with the assignor’s full knowledge and explicit permission. It is essential that the assignor consents to the transfer.
4. Just Compensation: The assignment agreement should stipulate that the transfer is made in exchange for just compensation or consideration. This consideration may be financial, goods, services, or any other agreed-upon form of compensation.
Steps Involved in Trademark Assignment Agreements
The process of executing a trademark assignment involves several sequential steps, as outlined below:
1. Application Submission
The Assignee, Assignor, or both parties must initiate the trademark assignment by submitting an application. This application should adhere to the guidelines specified in Trademark Rules 2017 and be prepared using Form TH. It should contain all relevant information regarding the transfer.
2. Application Submission Deadline
The finished application needs to be sent to the trademark registrar within a certain timeframe. Usually, this should be done within three months of obtaining ownership or control of the trademark.
3. Registrar Approval
Approval from the Registrar of Trademarks is necessary in three months. In certain cases, such as Trademark Assignments with goodwill or without goodwill, the period may be extended.
4. Advertising Process
The Registrar will outline how to advertise the Trademark Assignment. It is the applicant’s duty to conduct the advertisement following the guidelines set by the registrar.
5. Official Ownership Transfer
After the Registrar reviews all the provided proof and is content with it, they will officially transfer ownership of the trademark from the current owner (Assignor) to the new owner (Assignee).
6. Register Entry
The Assignee, now the new owner, needs to have their name entered in the register as the rightful owner of the trademark. Consequently, they gain the right to use the trademark as per the terms in the assignment agreement.
Final Thoughts
The assignment of trademark with goodwill is a strategic and mutually beneficial transaction for both assignors and assignees. It allows the assignor to monetize the value of their brand and the hard work invested in its development. Simultaneously, the assignee gains immediate access to an established brand, eliminating the need for extensive brand building efforts. This form of assignment maintains the intellectual property rights associated with the trademark, ensuring legal protection and credibility. Furthermore, it serves as a reliable proof of the transfer, offering security in case of disputes. In essence, assignment of trademark with goodwill is a vital mechanism that facilitates a seamless transition of brand ownership, ultimately driving the growth and prosperity of businesses while upholding the integrity of intellectual property rights.
