Like any other property rights, intellectual property rights allow their creator or owners to benefit from their own work and investment made. Upon registration of Intellectual Property, the owners are allotted with the exclusive rights over same. The owner or say, the IP-holder can assign or license the intellectual property to a third party for either and receive royalties in return. In this article, we are specifically speaking of an assignment in case of trademarks.
Transfer of ownership and rights over the Trademark to any other person or entity is known as Trademark Assignment in legal terms. An assignment can also be partial which is commonly known as licensing. Further, it is assignable with or without the goodwill of the business either in respect of all goods or services or a part thereof. A trademark is usually assigned by the execution of an agreement between the parties known as the Trademark Assignment Agreement. The most important requirement for a valid assignment agreement is that it must show intention the part of the assignor to transfer complete or partial ownership of the mark.
Although the assignment is an agreement between two or more parties, there are certain cases prescribed wherein the restriction to the assignment is provided.
- The assignment creates exclusive rights for more than one person with respect to the same goods or services.
For example; if you assign trademark to X for providing services related to health care and also to Y who is providing services and manufacturing goods related to health care, such assignment would not be permitted as it is creating exclusive rights for more than one person.
- If the assigned marks are used simultaneously by different individuals in different parts of the country then the assignment is not permitted as it would deceive or cause confusion.
Types of Trademark Assignment 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.
In this case, all the rights that are vested in the registered trademark are assigned to a third party. The assignee then enjoys all the rights that the original trademark owner had. The assignee would then be the sole owner of the trademark having rights to assign, trade, and market it and also to stop others from using it without authorisation.
In this type of assignment, the transfer of ownership is restricted only to certain products/services as decided by the parties and expressed in the Trademark Assignment Agreement. For example, if the owner of a trademark named “owa” mentions in the assignment agreement that the assignee can use the assigned trademark for only food products that are suitable for human consumption only. Then he cannot use the mark for any other goods/ services except food products for human consumption.
Now, both, the complete and partial assignment can be made with the assignment of goodwill or without goodwill.
Assignment with goodwill
When an assignment is made with goodwill, the rights and value associated with the trademark are given for using the mark for the products and services already being sold by the assignor.
For example, X, the owner of “owa”, owns trademark for manufacturing and selling of shoes, can assign the trademark along with giving the assignee the right to use the said trademark for the same product and activity for manufacturing and selling of shoes.
Assignment without goodwill
Here, the assignor can restrict the assignee’s rights for the product already used by him. This means that assignor & assignee both can use the same trademark but in distinct goods or services.
For example, if the owner of the trademark “owa” uses it for manufacturing and selling of shoes and decides to assign it without the goodwill, it means that the assignee can use the trademark “owa” for any other product the trademark covers but other than the shoes.
Benefits of Assignment of Trademark
Find out your trademark’s monetary value
- When you invest your money, time, and work after a brand, you must seek the returns, too. In addition to product values, the TM owner can also encash the brand value through assignment, which is only recorded on a piece of paper.
- With the assignment process, the brand is valued and the consideration in terms of royalty or otherwise is received by the owner.
- To note one, the Ahmedabad-based brand, Havmor Ice Cream has transferred the partial rights over to Lotte Confectionery for INR 1020 Crore.
Security for both – The Assignor and The Assignee
With the assignment process, the Trademark Assignment Agreement is executed by both parties. It creates a valid proof that is admissible in the court of law in case of any dispute. The assigned mark is published in the trademark journal by the registry and all the clauses of the assignment agreement are scrutinized adequately to avoid any hurdles in the future.
Benefit from an already established brand
For the assignee, purchasing a pre-recognised brand would certainly be a benefit in terms of market base. Further, the assignee would be exempted from investing a lot of money, time and labour in the creation and marketing of the brand. And certainly, assignee need not pass from the months-long registration process, if the concerned mark is already registered.
Expansion of business
Licensing is also one of the assignment types, whereby the assignor, as well as the assignee, has the right to associate the brand with their respective business. Therefore, the combined efforts of all would increase the value. Further, with the partial assignment, the assignor can expand the business by inviting more vendors to contribute to brand building. In the case of Havmor, the chairperson also believed that the Lotte Confectionery (assignor) is the right brand to take the company to next level.
Assignment of brands may open vistas of opportunities with proper strategies. The concept of assignment involves a degree of planning for the future of the involved parties and the brand in question. The development of a brand, its propagation, and its use, all lies in the hands of the proprietor that makes the assignment an effective method to manage the same. Assignment helps in keeping the brand alive that avails many benefits to the assignee and the assignor as well.
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