Trademark transfer, often referred to as trademark assignment, is the legal process of transferring the ownership and associated rights of a trademark from one party (the assignor, or original owner) to another (the assignee, or new owner). This is a crucial aspect of intellectual property management, especially during business sales, mergers, acquisitions, or restructuring.
In India, trademark transfer is primarily governed by the Trademarks Act, 1999 and the Trademarks Rules, 2017.
Why Transfer a Trademark?
Sale of Business
When a business is sold, its brand assets (including trademarks) are typically transferred to the new owner.
Mergers and Acquisitions
In corporate mergers or acquisitions, the trademarks of the acquired entity are transferred to the acquiring entity.
Restructuring
Internal restructuring within a corporate group might involve transferring trademarks between subsidiaries or holding companies.
Inheritance
Ownership of a trademark might be transferred through inheritance.
Monetization of IP
A trademark owner might choose to sell their brand entirely to another entity.
Assignment vs. Licensing: Key Differences
It’s important to distinguish trademark assignment from trademark licensing:
Trademark Assignment
This involves the permanent transfer of ownership of the trademark from the assignor to the assignee. Once assigned, the assignor no longer holds any rights to the trademark, and the assignee becomes the sole owner. It’s a complete change of proprietorship.
Trademark Licensing
This is a legal arrangement where the trademark owner (licensor) grants another party (licensee) permission to use the trademark under specific conditions, for a limited time, or within a specific geographical area, while the ownership of the trademark remains with the licensor. The licensor usually receives royalties or fees in exchange for this permission.
Types of Trademark Assignment in India
The Trademarks Act, 1999, allows for two main types of trademark assignments
Assignment with Goodwill
- This is a complete transfer of the trademark along with the goodwill of the business or the products/services it represents.
- The assignee can use the trademark for all products/services for which the assignor was using it, and also expand its use to other related products/services.
- This is the most common type of assignment, typically occurring when an entire business is sold.
Assignment Without Goodwill (Gross Assignment)
- This involves the transfer of the trademark rights without the associated goodwill of the business or products.
- The assignee can use the trademark, but usually not for the same goods or services as the assignor, to avoid confusing consumers about the origin of the goods/services.
- This type of assignment is less common and is often subject to stricter scrutiny by the Registrar to ensure it doesn’t lead to public deception. The Registrar may require the parties to advertise the assignment without goodwill to inform the public.
Process of Trademark Transfer (Assignment) in India
The process involves several systematic steps:
Due Diligence
- Before the transfer, the assignee should conduct thorough due diligence to ensure the assignor is the rightful owner of the trademark, that the trademark is valid, and that there are no encumbrances, legal disputes, or pending actions against it.
- Verify the current status and ownership details of the trademark on the Trademark Registry’s website.
Negotiation and Agreement
- The assignor and assignee negotiate the terms and conditions of the transfer, including the scope of the assignment (with or without goodwill, full or partial), the consideration (price), and any specific conditions or restrictions.
- It’s crucial to clarify if the transfer includes past rights (e.g., the right to sue for past infringements).
Drafting and Execution of Trademark Assignment Deed
- This is the most critical document. A formal, written Trademark Assignment Deed (or Agreement) must be drafted.
- Contents of the Deed:
- Full names and addresses of both the assignor and assignee.
- Details of the trademark(s) being assigned (trademark word/logo, application/registration number, class(es) of goods/services).
- Type of assignment (with or without goodwill).
- The consideration (monetary value) for the assignment.
- Effective date of the assignment.
- Representations and warranties of the assignor regarding ownership and validity.
- Indemnities.
- Signatures of both parties (assignor and assignee).
- Stamping and Notarization: The assignment deed must be properly stamped as per the Indian Stamp Act (stamp duty varies by state and consideration amount) and notarized.
Filing the Application with the Registrar (Form TM-P)
- Either the assignor, the assignee, or both jointly, can file an application to register the assignment with the Registrar of Trademarks.
- The application is made in Form TM-P.
- Time Limit: Form TM-P must be filed within six months from the date of execution of the assignment deed. While it can be filed after six months, there are higher fees and it may require a separate request for extension of time.
- Submission: The application can be filed online through the Intellectual Property India portal.
Examination by the Registrar
- The Registrar reviews the application and the assignment deed to ensure it complies with the provisions of the Trademarks Act, 1999, and does not lead to confusion or deception of the public.
- If the assignment is “without goodwill,” the Registrar might issue directions requiring advertisement of the assignment to inform the public.
Advertisement (if required, especially for “without goodwill” assignment)
- If the Registrar directs, the assignment must be advertised in a specified manner (e.g., in a newspaper or the Trademark Journal).
- Proof of such advertisement must then be submitted to the Registry. This allows any affected third party to raise objections.
Registration of Assignment
- Once the Registrar is satisfied with all the documents, compliance with legal requirements, and any directions (like advertisement), they will officially record the change in ownership in the Register of Trademarks.
- The name of the assignee will be entered as the new proprietor of the trademark.
Documents Required for Trademark Transfer
Trademark Assignment Deed
The duly executed, stamped, and notarized original or certified copy.
Original Trademark Registration Certificate/Application Details
Copy of the trademark registration certificate or the application number if the trademark is still pending registration.
Identity Proof of Assignor and Assignee
PAN Card, Aadhaar Card for individuals; Certificate of Incorporation, PAN for companies/LLPs.
Address Proof of Assignor and Assignee
Utility bills, bank statements.
No Objection Certificate (NOC) from Assignor
Though usually part of the assignment deed, a separate NOC might be required in certain cases.
Power of Attorney (Form TM-48)
If the application is filed through a trademark agent or attorney, authorizing them to act on behalf of the assignor/assignee.
Form TM-P
The official application form for recording the assignment.
Government Fees for Trademark Assignment (Form TM-P)
The government fees are generally per trademark, per class:
For recording assignment of a registered trademark
- E-filing: ₹9,000 per mark, per class.
- Physical filing: ₹10,000 per mark, per class.
For recording assignment of a pending trademark application
- E-filing: ₹900 per mark, per class.
For requesting advertisement of assignment without goodwill
- E-filing: ₹2,700 per mark, per class.
(Note: These are government fees. Professional fees for drafting the assignment deed and handling the application process by a trademark agent or attorney would be separate.)
Importance of Registration of Assignment
While an assignment deed legally transfers ownership between parties, registering the assignment with the Trademark Registry is crucial because:
- It provides public notice of the change of ownership.
- It serves as conclusive evidence of the assignee’s title to the trademark.
- The assignee cannot initiate infringement proceedings in their own name until the assignment is recorded in the Register.
- It ensures that all official communications from the Registry go to the correct owner.
Given the legal complexities, stamping requirements, and various procedural steps, it is highly advisable to get help from our trademark experts to manage the trademark transfer process to ensure accuracy and compliance.