Assignment of Trademarks in India

Just as in the case of physical property such as land, every owner of a Brand or Trademark has the right to sell, license, transfer, etc. its respective brand or trademark in accordance with legal procedures. A brand or Trademark owner can transfer his rights with respect to his trademark either by way of assignment or by licensing. In India, The Trade Marks Act, 1999 deals with assignment as well licensing of trademarks.

To put it simply, in case of an assignment of  trademark, there is a change in the ownership of the registered brand and in case of licensing, the right in the trade mark continues to vest with the original owner but only few restricted rights to use the brand/mark are given to the third party.

In this article we are going to discuss Transfer of Trademark ownership India and How to transfer Trademark ownership India.

Assignment of trademark in India occurs when the ownership of such a mark, as such, is transferred from one party to another whether along with or without the goodwill of the business. In case of a registered Trademark assignment it is required to be recorded in the Register of trademarks.

A mark may be assigned or transferred to another entity in any of the following manners:

• Complete Assignment to another entity- The owner transfers all its rights with respect to a mark to another entity, including the transfer of the rights such as right to further transfer, to earn royalties, etc. (E.g. X, the proprietor of a brand, sells his mark completely through an agreement to Y. After this X does not retain any rights with respect to the brand.)

• Assignment to another entity but with respect to only some of the goods/services- The transfer of ownership is restricted to specific products or services only. (E.g. P, the proprietor of a brand used for jams and jellies and dairy products. P assigns the rights in the brand with respect to only dairy products to Q and retains the rights in the brand with respect to jams and jellies.) This is called partial assignment.

• Assignment of Trademark with goodwill- Such assignment is where the rights and value of a trademark as associated with the product is also transferred to another entity.(E.g. P, the proprietor of a brand "Shudh" relating to dairy products, sells his brand to Q such that Q will be able to use the brand "Shudh" with respect to dairy products as well as any other products it manufactures.)

• Assignment of Trademark without goodwill- Such assignment also referred to as gross assignment, is where the owner of the brand restricts the right of the buyer and does not allow him to use such brand for the products being used by the original owner. Thus, the goodwill attached to such a brand with respect to the product already being sold under such brand, is not transferred to the buyer. (E.g. P, the proprietor of a brand "Shudh" relating to dairy products, sells his brand to Q such that Q will not be able to use the mark "Shudh" with respect to dairy products but can use this brand for any other products being manufactured by it. In such case the goodwill which is associated with brand "Shudh" for dairy products is not transferred to Q and Q will be required to create distinct goodwill of brand "Shudh" for any other product or service like Restaurant wherein Q proposes to use this brand.). In many jurisdictions like the United States, assignment of marks without goodwill is not allowed at all. India on the other hand allows assignment without goodwill.
  
  Further, in case of registered Trademarks, the Trade Mark Act 1999 also puts certain restrictions on the assignment of a registered trade mark wherein there exist possibilities of creating confusion in the mind of public/users. Such restrictions are:
  

• Restriction on assignment that results in the creation of exclusive rights in more than one person with respect to the same goods or services, or for the same description of goods or services or such goods or services as associated with each other.

• Restriction on assignment that results in different people using the trademark in different parts of the country simultaneously.

Agreements for Transmission

A trade mark is generally assigned by way of a properly executed Trademark Assignment Agreement India which pertains to the transfer of the mark from one person or entity who is the owner to another. It is to be ensured when drafting such agreement that:

• the rights of the owner of the brand are not detrimentally affected due to the obligations contained.

• the requirement and decision regarding whether the assignment should be with or without the goodwill of the business is explicitly mentioned and negotiated

• the agreement should be drafted keeping in mind the purpose of the transaction in question 

Fee for assignment or transfer of single trademark:

-If made within six months from the date of acquisition of proprietorship: Statutory fee is INR. 5,000

-If made after the expiration of six months but before 12 months from the date of acquisition of proprietorship: Statutory fee is INR. 7,500

-If made after 12 months from the date of acquisition of proprietorship: Statutory fee is INR. 10,000

Procedure to record the assignment of trademark with the Registry:

Assignment of unregistered mark:

Section 39 stipulates that an unregistered trademark may be assigned or transmitted with or without the goodwill of the business concerned. A request has to be made on Form TM-16 for an unregistered trademark to be assigned or transferred.

Assignment of a registered trademark:

Section 38 stipulates that trademarks assignment in India is full or transmitted in part, with or without the goodwill of the business. All transmissions or assignments must be registered with the Registrar of TradeMarks on Form 23 or 24 of the Trade Marks.