Assignment of Trademarks in India

In India, the first legislation in regards to Trademark was Indian Merchandise Marks Act, 1889 followed by the Trade Mark Act, 1940. Then India became a party to the Agreement on Trade Related Aspects of Intellectual Property Rights i.e. TRIPS Agreement. Therefore, it became mandatory for India to bring our Trademark Laws in conformity with TRIP’s Agreement and hence India amended its Trademark Act, 1940 and came with the Trademark Act, 1999.

Trademarks are the assets by its nature. However, under the Trademark Act 1999 it is not mandatory to register your trademark. Therefore, the rights of proprietors such as assignment or transmission can be done even when the trademark is unregistered.

Assignment of Trademark:

A trademark assignment is a transfer of an owner’s rights, title, and interest in a trademark. Section 37 of the 1999 Act recognizes the right of registered proprietor to assign the trademark for any consideration and to give receipt. It provides that subject to the provisions of the 1999 Act and to any rights appearing from the register to be vested in any other person, the proprietor of a Trade Mark has the power to assign the trademark and to give effectual receipts for any consideration for such assignment. In simple terms, the owner of the trademark (assigner) can assign his rights of trademark to any other person (assignee/ receiver).

The term Assignment is defined under Section 2(1)(b) of the Trade Marks Act, 1999 as, assignment means an assignment in writing by act of the parties concerned i.e. the assignment of trademarks is conducted by way of a properly executed Trademark Assignment Agreement signifying the transfer of the mark from assigner to assignee. In India, for assignment of registered trademark it is required to be recorded in the register by filing Form TM-P along with the prescribed fees.

Essentials for Valid Assignment:

The essential requirement for valid assignment is as follows-

  • The Agreement must be in writing.
  • The Agreement must clearly identify the parties involved i.e., assignor and assignee.
  • There must be a clear indication of the nature and value of the consideration for which the ownership is being transferred for.
  • The date and day of assignment to be mention clearly.
  • Agreement must be duly executed i.e., it must be notarized, stamped as per the applicable Stamp Act, stamp duty.
  • Signatures and Witnesses along with the date and place of execution must be clearly provided.

Various ways for execution of Assignment:

  1. Complete Assignment– When the owner transfers all 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.
  2. Assignment to another entity but with respect to only some of the goods/services- When the transfer of ownership is restricted to the type of goods or services agreed upon by the parties.
  3. Assignment with goodwill– Section 39 of the Act says, When All rights and value of the trademark as associated with the goods or the services are transferred. The party receiving the ownership of such trademark is free to use such trademark for any class of goods.
  4. Assignment without goodwill– Such assignment also referred to as gross assignment, when 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. Unregistered trademarks which are assigned without goodwill, restrict the assignee’s right to protect the trademark against passing off actions. Unless, there is a registration of the trademark, no enforceable rights shall be within the scope of the assignee.

Limitation for Assignment under Trademark Act:

Section 40(1) of the Trade Mark Act, 1999 restrict the assignment if the creation of exclusive rights in more than one person with respect to same or similar goods or services since it would create confusion in the minds of the general public.

In addition, the assignment of trademark to different people in different parts of the country is also restricted. Moreover, it restricts the assignment of goods or services or description of goods or services which are associated with each other.

Registration of Assignment:

Section 45 (2) of the 1999 Act, says when a person becomes entitled by assignment to a registered trademark he shall apply in the prescribed manner to the Registrar to register his title. It has to be registered within six months from the date of assignment, however, an extension for the period of three months can be granted. The application to register the title of a person who becomes entitled by assignment shall be made in Form TM-24 or TM-23.

How Assignment is different from Transmission of trademark:

The Trademark Act, 1999 under Section 2 (1) (zc) differentiates transmission from assignment as- when the transfer of rights is by operation of law, devolution on the personal representative of a deceased person and any other mode of transfer, not being assignment, is known as transmission of trademark. The Assignment and Transmission of trademark is not extremely distinctive from each other even the procedure for entitlement of both is ideal. 

Trademark Assignment is an innovation in the field of Intellectual Property Rights to gain benefit and grow in various forms. The procedure and rights related to it is very important to know as a party of the agreement. The sound and precise drafting of the trademark assignment agreement becomes essential and demands assignment as per intention of the parties.

References:

The Trademark Act, 1999

https://taxguru.in/corporate-law/assignment-transmission-trade-marks.html

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