Trademark is a form of Intellectual Property. It essentially refers to the brand name that allows for differentiation between similar goods. Trademarks can be in the form of numerals, a combination of colours, signature, name, or device. Companies spend a huge amount of money through advertising and product design to establish their brand value. The same is treated as an asset that can be transferred like any other type of property, in accordance with the Trade Marks Act, 1999 and accompanying Rules of 2017.
Assignment v/s Licensing
The assignment of Trademarks refers to the transfer of ownership of the Trademark to the buyer. The transfer can be with or without goodwill.
Licensing refers to a limited transfer i.e.; the transferee is allowed to use the Trademark (within the limits of the agreement entered upon) without having the ownership transferred to him. The Licensor(owner of the Trademark) usually generates loyalties while the Licensee gets the ability to expand his business using the appeal of the Trademark.
Types of Assignment
The following are the different types of Assignments allowed under the Act:
I. Complete Assignment:
As the name entails, a complete transfer of all the rights pertaining to the Trademark is transferred to the buyer. The buyer would be empowered to sell it later on if he so chooses to.
II. Partial Assignment:
Herein only restricted ownership pertaining to specific products or services is transferred to the buyer.
III. Assignment with Goodwill:
Goodwill is a term that is easy to describe but hard to define. It refers to the intangible value of (in this case) a Trademark. In this type of assignment, the owner transfers the rights and values related to the product or service.
IV. Assignment without Goodwill:
Trademark Ownership excluding Goodwill stands transferred. The buyer cannot use the Trademark for the same product or service as used by the owner. That is, the buyer shall be allowed to use the purchased Trademark for products other than those already being produced by the original owner, as the goodwill relating to that product is not transferred.
There exist certain restrictions on the assignment of registered Trademark so as to prevent creating confusion in the mind of the public or users.
- The restriction is placed on the assignment of a trademark that results in the creation of exclusive rights in more than persons that may lead to the production of the same goods/services or the same description or associated with each other.
- The restriction is placed on the assignment that results in the Trademark being used in different parts of the country by different people simultaneously.
While drafting an assignment deed, it is necessary to include the following:
- The name of the owner which needs to match the records present with the Registry if the Trademark is registered.
- Specificities like the territorial extent of the Trademark should be explicitly mentioned in order to prevent any ambiguity
- It is absolutely necessary to clearly mention whether the transfer of goodwill is taking place or not.
- The date of the assignment should be specified.
Process with the Registry
It is important to record the change in ownership with the Trademark Registry. According to Rule 75 of Trademarks Rules, 2017, Form TM-P should be filed with the Registry intimidating the changes to the ownership of Trademark. A flat fee is applicable - Rs.9,000 for E-Filing, and Rs.10,000 for Physical Filing. This has made the process of assignment streamlined and simpler.
Trademarks are valuable assets. They are a measure of a company's popularity and reputation in the market. Therefore, entities rather than investing a lot of time, effort, and money into creating a brand of their own sometimes prefer to buy it. It is advantageous for the buyer as through minimal effort; a customer base is handed over. Assignment deeds should be made with proper care otherwise, they might become a reason for litigation.
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