Trademark Assignment in India - A Comprehensive Guide

The transfer of a trademark or a right associated with it is done by the process of trademark assignment agreement or trademark licensing. In legal parlance, “assignment” is a term whereby a party, known as the “assignor,” transfers rights, property, or other benefits in their intellectual property to another party known as the “assignee.”

Under section 37 of the Trademark Act, 1999, the term trademark assignment has been defined. As per the definition, trademark assignment means transferring the owner’s right, interest, and title in a trademark and a brand mark.

A trademark assignment agreement acts as a valid proof or evidence in case any situation or dispute relating to the assignment/ transmission arises. The legal rights of the author or the owner of the trademark are well protected through such assignment agreements. As a result, it is necessary to understand the intricacies related to trademark assignment.

Types of trademark assignments

There are various types of assignments of trademarks, enlisted by the Act, each with distinct characteristics and legal implications. They are depicted below:

A. Based on rights’ transfer:

1. Partial assignment

Partial Assignment involves the transfer of ownership restricted to specific services or products, or for specific periods or jurisdictions.

For example, company XYZ sells cosmetics and shoes throughout the world. Company XYZ may assign the trademarks with respect to cosmetics to one distributor to only sell the cosmetics under the trademark in the Asia Pacific region for a period of ten (10) years. XYZ may also assign rights over his trademarks for shoes to another company for Americas for a period of five (5) years.

2. Complete assignment

Complete Assignment refers to the transfer of all rights associated with a trademark from one party to another. This includes the rights to further transfer the trademark, receive assignment fee and the assignee exercising full ownership and control over its usage.

For example, if A, a proprietor has transferred a trademark to B by selling the entire rights of that trademark, A has no right on the trademark anymore and B may license or sell off that trademark further to anyone without taking approval from A. B becomes the exclusive owner.

In the above example (covered under ‘partial assignment’), company XYZ may assign the trademarks with respect to cosmetics to another company ABC perpetually for the entire world as part of a business transfer to ABC. Similarly, XYZ may also assign rights over his trademarks for shoes to their subsidiary perpetually pursuant to a business vertical separation.

B. Based on the goodwill of the business concerned:

1. Assignment with Goodwill

Assignment with Goodwill means the transfer of a trademark with the entire goodwill of the business which uses the trademark. For instance, if ‘X’ assigns their trademark to ‘Z’ with the goodwill, ‘Z’ gains full rights to use the trademark in the original category of products or services covered under the brand, and is also entitled to claim rights over the valuable reputation and goodwill[1] that was generated by X due to the original use of the trademark thereby for its entire period of use.

2. Assignment without Goodwill

Assignment without goodwill involves the transfer of a trademark without any legacy goodwill created by the assignor in their business. For example, if ABC, a proprietor, dealing in jewellery, assigns the trademark to XYZ without goodwill, XYZ can use the trademark with respect to any goods and services, except for jewellery. In this regard, it is noteworthy to highlight that:

The assignment of a trademark without goodwill will only be effective if the proposed assignee applies to the Registrar for directions regarding the advertisement of the assignment first and receives no third party conflicts in relation to the proposed assignment. Section 42 of the Act provides for the conditions of assignment and transmission of a trademark without the goodwill of the business concerned.
The proposed assignee must advertise the assignment within the timeframe specified by the Registrar. This period of advertisement should not exceed six months before the date of the assignment or an extended period of nine months in all, if permitted by the Registrar.

C. Based on the official status of the trademark

1. Assignment of registered or applied for trademarks

Section 38 of the Trademark Act states that a registered trademark can be assigned and licensed, with or without the goodwill of the business associated with it. This can either be a partial or a complete assignment as stated above.

For example, if Company A has registered for the trademark “Briteglow” and decides to sell the product with the trademark as per the agreement to Company B, it is the assignment of a registered trademark.

Once the assignment of a registered or applied for trademark occurs, the new proprietor is required to record the assignment and bring themselves as a subsequent / new proprietor of the trademark, in the records of the Trademarks Office. While official fee for bringing the subsequent proprietor of a registered trademark is Rs. 9,000, the same is Rs. 900 for an applied for mark.

2. Assignment of unregistered trademarks

According to Section 39 of the Trademark Act, an unregistered trademark can also be assigned or transmitted, with or without the goodwill of the business concerned.

For example, A runs a bakery named “Baker’s Delite” for years and has gained significant goodwill and reputation in the market. He has not registered his trademark. Now A wants to retire and sell this bakery to B along with the trademark the bakery operating under it. They agree to the sale of the trademark which has not been registered. This is called assignment of an unregistered trademark.

Types of Trademark Assignments

Category	Type	Description	Example
Based on Rights’ Transfer	Partial Assignment	Transfer of ownership restricted to specific services/products, periods, or jurisdictions.	Company XYZ assigns cosmetics trademark to a distributor for the Asia Pacific region for 10 years.
	Complete Assignment	Transfer of all rights associated with a trademark from one party to another.	Proprietor A transfers all rights of a trademark to B. B can license or sell the trademark without A’s approval.
Based on the Goodwill of the Business Concerned	Assignment with Goodwill	Transfer of a trademark with the entire goodwill of the business using the trademark.	‘X’ assigns their trademark to ‘Z’ with goodwill. ‘Z’ gains full rights to use the trademark in the original category.
	Assignment without Goodwill	Transfer of a trademark without any legacy goodwill created by the assignor in their business.	Proprietor ABC assigns a jewelry trademark to XYZ without goodwill. XYZ can use the trademark for any goods except jewelry.
Based on the Official Status of the Trademark	Assignment of Registered or Applied for Trademarks	Assignment of a registered trademark, with or without the goodwill of the business associated with it.	Company A registers the trademark “Briteglow” and assigns it to Company B.
	Assignment of Unregistered Trademarks	Assignment of an unregistered trademark, with or without the goodwill of the business concerned.	Proprietor A assigns the unregistered trademark “Baker’s Delite” to B along with the bake

Restrictions on Assignment of trademarks

There are certain restrictions on the assignment of trademarks. These have been imposed to maintain the integrity and distinctiveness of a trademark and to ensure there is no confusion regarding the source of these brands which would mislead the public at large.

There is a restriction on trademark assignment, which results in the creation of exclusive rights for more than one person with respect to the same or similar goods or services. For example, A cannot transfer the same rights of a trademark to B and C. This would make both B and C exclusive owners with respect to the same goods and services which is not permissible by law.
The Act also puts a restriction on the assignment of the trademark, which results in different people using the same trademark in different parts of the country at the same time simultaneously. For example, A, living in West Bengal and B living in Maharashtra cannot use the trademark “Honda” simultaneously.

Process of Assignment and Transmission of Trademark

Essentials for concluding a trademark assignment

Assignment must be in writing
The assignment must have the following two identifying parties-
An assignor (original proprietor of the trademark); and
An assignee (buyer of the trademark).
The assignor must not only have the intention and consent for the trademark assignment, but should clearly assign their trademark either completely or partially, as the case may be.
The subject of the assignment, i.e., trademark rights, should be clearly set out in the assignment. If the trademark is registered, the assignment should provide relevant official details, the status of the mark, tenure of validity, jurisdictions where it is registered, etc.. If the trademark is unregistered, the assignment should also make a mention thereof.
The parties should identify whether the assignment is with or without goodwill; and if it is without goodwill, due process prescribed by the law should be followed, prior to the assignment.
The trademark assignment must be for adequate valuable consideration and its receipt should be acknowledged by the original proprietor.
The assignment should be suitably signed by the assignor and the assignee or their authorized representatives. It should be stamped as per the stamp laws and local regulations thereto and notarized by a public notary.
In relation to registered trademarks, the assignment, once fully executed and notarized, is required to be recorded with the trademark authorities for bringing the assignee as the subsequent proprietor on record of the trademark office.

Requirements for the recordal of trademark assignment

Duly executed, notarized and stamped Trademark Assignment Agreement
Description of trademark assignment with or without goodwill
Mention of valuable consideration, and the receipt from the Assignor
An Affidavit that there is no pending legal proceeding with respect to the ownership of the trademark in question
Power of attorney, if required, in favour of the trademark attorney assisting with the assignment recordal
A Statement of Case, if needed, by the Trademark Registry
Requisite fees, as applicable.

Process of Assignment recordal in case of a registered or an applied for trademark

Step 1- Filing of Application

The first step is to file an application for the assignment of trademark. This application should be made by the assignee mentioning all the details of the transfer in a Statement Of Case and must be made under the form TM-P (in case of a registered mark) and form TM-M (in case of a pending mark) as mentioned under the Trademark rules 2017.

Step 2- Review by the Registrar

On receiving the application, the Registrar will review the application and provides a decision within three months. This is a step to check if the applicant has conformed with all the procedures and documents. The decision may include informing the applicant about the assignment or requesting additional proof if there are any discrepancies.

Step 3 – Advertisement of the Assignment

After reviewing the application and removal of discrepancies, the Registrar will advertise the particulars of the trademark assignment in the Trade Marks Journal.

Step 4- Transfer of the trademark and registration of the assignee as a new proprietor

Once the advertisement process is over and the Registrar is satisfied records the rights of the assignee and officially assigns the trademark. The name of the assignee is reflected in the official records as a new proprietor. After this, the assignee can exercise his rights, interests and ownership over the trademarks as per the terms of the assignment.

Difference with trademark licenses

It is pertinent to mention that the assignment of a trademark is different from its license. While an assignment transfers all ownership, interests and rights associated with the trademark to another party, a license merely is a licensor’s permission to use the trademark by the licensee while the ownership is retained by the licensor. A license is another means to commercialize trademarks and often used in franchising, joint ventures, and distribution agreements.

Assignment of Registered and Unregistered trademarks

Registered trademarks

For example, if Company A has registered for the trademark “Briteglow” and decides to sell the product with the trademark as per the agreement to Company B, it is the assignment if a registered trademark.

Unregistered trademarks

According to Section 39 of the Trademark Act, an unregistered trademark can also be assigned or transmitted, with or without the goodwill of the business concerned.

Feature	Trademark Assignment	Trademark License
Ownership	Full transfer of ownership, interests, and rights of the trademark	Original owner retains ownership, grants limited usage rights to licensee
Legal Proof	Serves as legal proof in case of disputes related to trademark usage	Does not transfer ownership, only usage rights are granted
Commercial Use	Assignee gains full rights to use, license, or sell the trademark	Licensee gains rights to use the trademark under specific conditions
Scope	Can be partial or complete, with or without goodwill	Limited to the terms of the licensing agreement

Common pitfalls during assignment of trademark

Unwritten assignment– The prerequisite of a trademark assignment is that it should always be in writing and there should clearly be two parties present, i.e., the assignor and assignee who have a clear intention of transferring the trademark. If a written assignment is missing, there remains no proof that the trademark has in fact, been assigned. This would be detrimental if a dispute arises.

Type of assignment ambiguous– It should clearly be mentioned in the agreement of assignment whether it is a partial, complete, with or without goodwill type of an assignment to avoid future complications. If there is no clear specification whether the trademark has been assigned with or without goodwill or whether there is a partial or complete assignment, it would lead to certain complications. If the assignor did not intend to assign all the rights, but this intention was ambiguous in the agreement, and the assignee uses the trademark with all its rights, then there will be undesirable consequences and disputes. As a result, one should always specify the type of assignment in the agreement.

Failure to conduct due diligence– Before acquiring rights to a trademark and having it assigned in your favour, it is pertinent to conduct due diligence as to there are no conflicts or claims of infringement on the trademark to be assigned. One should also check for prior registrations or pending applications.

Confusing with trademark license – It is important to clearly understand the specific scope of the rights’ transfer before a trademark assignment is sought from another party. For an assignee, it constitutes a huge business risk when his intention was to have the transfer of trademark ownership and interests, and in reality the agreement merely provides a right or a permission to use a mark. If there is a confusion in this regard, one must seek clarifications and bring in specific terms with respect to assignment. If needed, he should consult his trademark cum commercial lawyers to have a wholesome perspective on the nature of the transfer.

Conclusion

As a result, trademark assignment is an important process by which a company or proprietor may commercialize their brand related rights built over years. Due diligence should be carried out with proper documents and application to avoid future complication. Assigning and transmitting a trademark allows the assignee to benefit from an already established brand in the market, saving them the effort and resources required to create a new brand. In addition, business should always keep in mind that the implications of trademark assignment are evolving day by day, and as a result they should stay updated with the current rules.

FAQs

Q1. What is the form for trademark assignment’s recordal application?

The recordal application must be made under the form TM-P in case of a registered trademark as mentioned under Rule 75 of Trademark rules 2017. In case of an unregistered trademarks, the recordal application must be made under form TM-M.

Q2. What is the legal benefit of recording an assignment?

The assignment and transmission of a trademark serves as legal proof in case of any disputes related to trademark usage. The rights and liabilities associated with the trademark are clearly outlined in the agreement.

Q3. What is the difference between assignment of a trademark and its license?

In the case of trademark assignment, there is a transfer of ownership, interests and rights of the registered trademark to another party. On the other hand, in the case of trademark license, the original owner retains the ownership to the trademark but grants limited rights to a third party for its use.

[1] Goodwill is also considered a strong business asset of intangible nature and gets valued high in a high-profile business transaction.

Article contributed by Ms. Eesha Parande.

Trademark Assignment in India – A Comprehensive Guide