TRADEMARK ASSIGNMENT AGREEMENT

“An agreement is a mutual understanding between two or more legally competent individual and entity about their rights and duties regarding their past and future performances and consideration”.

A Trademark Assignment Agreement is a formal written contract that will transfer a “Trademark” (weather that is a phrase, symbol, word or design) from its current owner (the Assignor) to the future owner (the Assignee).

Trademarks are often transferred from one owner to another. The transfers may well be temporary through licensing or permanent through the assignment. Trademark Assignment may be a method within which the owner of the trademark transfers the possession either with or without the goodwill of the business. In different words, transfer of intellectual property rights from, the owner of the rights to another person or organization. Section 2(1)(b) of the Trade Mark Act,1999 defines the assignment to mean “an assignment in writing by act of the parties concerned”. In view of this definition, an assignment has to be in writing and by the act of the parties concerned. Both the assignor and the assignee must execute the document. Such document will be known as the assignment agreement. There cannot be a unilateral execution of document by one party alone.

TYPES OF ASSIGNMENT AGREEMENT IN INDIA

Multiple types of Trademark assignment are accepted in India. Based on the need and requirement, the parties would fall under the specific type, and accordingly, the Assignment Agreement would be drafted.

  1. Complete assignment

In this, the owner of the trademark transfers the ownership and rights completely to the assignee related to the trademark. After the complete assignment, the owner loses his power over the trademark and an assignee retains all such respective rights.

  1. Partial assignment

In this, the transfer of the ownership is done to certain products and services. The assignor holds the rights over the part which has not been transferred to the assignee in terms of assignment.

  1. Trademark assignment with Goodwill

In this, assignor transfer the rights of the ownership as well as the image valued rights over the trademark.

  1. Trademark assignment without Goodwill

In this, the restriction over the usage of the trademark product on the part of the assignee i.e. the assignor can restrict the assignee for not using the trademark in business. The same can be used by both, the assignor and the assignee in their different business filed. This assignment is also called as gross trademark assignment.

According to the Trade Mark Act, in case of registered trade mark there are some restriction on the assignment of a registered trade mark under section 40 of the act wherein exist the possibility of creating the confusion in the minds of the public. Such includes:

  • Restriction on assignment that results in the creation of exclusive right in more than one person with respect to the same goods or service, or for same description of goods or services or such goods or services are associated with each other.
  • Restriction on assignment that result in different people using the trademark in different part of the country simultaneously.

PROCEDURE TO RECORD THE ASSIGNMENT OF TRADEMARK WITH THE REGISTRY


ASSIGNMENT OF AN UN-REGISTERED TRADEMARK

Section 39 of the Trademark Act 1999 stipulates that an un-registered trademark can be assigned with or without the goodwill of the business concerned.


ASSIGNMENT OF A REGISTERED TRADEMARK

Section 38 of the Trademark act 1999 stipulates that a registered trademark cab be either assigned full or transmitted in part, with or without the goodwill of the business. All assignment must be registered with the Registrar of the Trademark on Form TM-P of the Trademark.

REGISTRATION OF ASSIGNMENT

Section 45 of the Trade Mark Act,1999 lays down the procedure for the registration of the assignment. Where a person becomes entitled by assignment to a registered trade mark, he shall apply in the prescribed manner to the registrar to register his title. Registrar shall upon the receipt of the application, register him as the proprietor of the trade mark in respect of the goods or services in respect of assignment.

Registrar may require further evidences and statement in proof of title if there is any reasonable doubt about the veracity of the statement or any document furnished.

If the validity of the assignment is in dispute between the parties, the registrar may refuse registration of the assignment until the rights of parties have been determined by a competent court. Until an application is filed in an aforesaid manner, the assignment shall be ineffective against a person acquiring the conflicting interest in or under the registered trade mark without the knowledge of assignment.

DISCRETION PROVIDED TO THE REGISTRAR

According to the provision of section 45, rule 75 of the Trade Mark Act,1999 application for the registering the title of a person shall be made in form TM-P. Further, an affidavit for no legal proceedings pending in relation to the trademark which are part of the merger can also be filed on behalf of the transferee company.

The registrar shall dispose of an application made under Rule 75, within three months from the date of application and he may call person for furnishing the proof of the title for his satisfaction. On getting satisfied the registrar will register him as subsequent proprietor of the trade mark in respect of the goods and services. Once the trade mark get registered with the goodwill, the assignor cannot have the interest in the trade mark assigned. The assignee alone can represent the opposition proceedings as a party interested.

POSITION OF A NON-REGISTERED ASSIGNEE IN INDIA

The law empowers the registrar to refuse to register the assignment or transmission when the validity of an assignment or transmission is in dispute between the parties, until the rights of the parties have been determined by a competent court [section 47 (2)]. The Registrar’s refusal to register the assignment or transmission will naturally arise only before the actual change is effected in the register. The assignor or any other person may complain that the assignment is invalid or that it has been procured from him under circumstances entitling him to repudiate that transaction. In such circumstances the registrar cannot be expected to decide upon the validity of the assignment where it is challenged before him.

  • In Radha Kashan Khandelwal vs. Asst. Registrar of Trade Mark[1], the Delhi high court held that “it is true that the rules do not expressly require a notice to be issued or a hearing to be given to the party adversely affected by the order when an application on form TM 24 is made before the registrar, but there is in eye of law a necessary implication that the party adversely affected should be heard before an order for the removal of his name can be made against him.

Moreover, if no entry has been made in the register, the document or instrument will not be admitted in evidence by the registrar or the appellate board or any court except for certain purposes as stipulated. The Registrar, or the concerned Authority as the case may be, has been given a discretion under this section to admit or not admit an assignment deed for which no application under Form TM-24 has not been made as an evidence of title of the assignee. Such a situation usually arises in cases where actions against third parties are involved. Very often the question as to the maintainability of a suit initiated by an unregistered assignee against the third parties has been dealt with by the Courts.

  • In Shaw Wallace & Co. (supra)[2]case, an application for impleadment of the assignee was under consideration. This court held that till the time the Registrar of Trade Mark, does not record the title in favour of the assignee, the deed of assignment cannot be admitted in evidence. However, the assignee was still impleaded as a party with direction to file the registration as and when accorded by the Registrar.

The above view of the Courts has also been contravened by other Courts. Emphasizing the fact that even if the assignment deed is not registered with the records of the Trademarks Registry, it, itself is a valid instrument and hence permissible to be taken as an evidence of the assignee’s title on the trademark.

  • Further, in Hindustan Lever Ltd. v. Bombay Soda Factory[3], it was held that “the plaintiff could not be non suited merely because the change in the name of the registered proprietor had not been effected by the time suit was instituted. Registration of the name of the proprietor does not confer title on him. it is merely an evidence of his title. The plaintiff –company was the owner of the trademark in question at all times.”

DRAFTING OF THE TRADEMARK ASSIGNMENT AGREEMENT

While drafting the Trademark Assignment Agreement, the parties should keep the following key elements in the agreement:

  • Effective date of transfer
  • The Trademark
  • Assignor and Assignee
  • Consideration
  • Warranties
  • Signature
  • Notary Public

CONCLUSION

Trademark assignment is the most crucial step, which open the plethora of opportunities for the growth of business. It is important to register the assignment of trademark with the concerned authority or registrar. An assignee does not get his rights assigned to him from the assignor, without registration of the assignment.

The assignment agreements are always considered important in the intellectual property. It allows the property owner to transfer his ownership rights for the commercial returns and ensures the monetary gains to him. It is a written, enforceable contract that pertains to transfer the rights in a formalize agreement between two persons. It protects and regulates the rights of all the parties that are engaged in the agreement. Assignment agreement involves the exclusive sale of the rights which gives the assignee complete ownership over the marks of the assignor in whatever way, shape, or form it is in.

[1] AIR 1969 Delhi 324

[2] 105 (2003) DLT 586, 2003 (27) PTC 63 Del, 2003 (3) RAJ 224

[3] AIR 1964 Kant 173, AIR 1964 Mys 173

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