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Rights in the trademark can be assigned through a Trademark assignment agreement. When a trademark is assigned by the owner to the third party, its ownership is transferred to the other party either completely or for a limited number of products or services. A complete transfer means ownership is transferred with goodwill and if it transferred without goodwill then it is limited transfer. Such an agreement can be executed even if the trademark is unregistered, a registered trademark can also be assigned but the assignee shall apply with the Registrar within six months.
Assignment of a trademark is when ownership of such mark is transferred from the owner to another party with or without the goodwill of the business. In case of a registered trademark, such assignment needs to be recorded in the Registrar of Trademark. A mark can be assigned or transferred to another entity in any of the provided manners:
Complete assignment to another entity: The owner can transfer all its rights with respect to mark to another entity this includes a transfer of right such as a right to further transfer to earn royalties.
Assignment to another individual but only with respect to some of the goods/services: In this kind of transfer the ownership is restricted to specific products or services. This kind of transfer is known as a partial assignment.
Assignment with goodwill: These kinds of an assignment are such in which the rights and the value of a trademark that is associated with the product are also transferred to another entity.
An assignment without the goodwill: Such kind of assignment is also known as the gross assignment, in these kinds of assignment owner of the brand restrict the rights of the buyer and doesn’t allow him to use such brand for products that are being used by the original owner.
Therefore, the goodwill attached to the brand with respect to the brand which has already been sold is not transferred to the buyer. In many jurisdictions like the USA, the assignment of the mark without goodwill is not allowed. Whereas in India assignment is allowed without goodwill.
As per the Trade Mark Act 1999, there are certain restrictions at the time of assignment of a registered trademark in all those cases where there is a possibility of creating any confusion in the mind of the existing public regarding the registered trademark. The restriction which is defined in the act is as under:
There is a restriction on the assignment that results in the creation of the exclusive right in favor of more than one person with respect to the same goods or services or for the goods and services of the same description or for the goods or services which are associated with each other.
There is a restriction on the assignment that will result in different people using the same trademark in different parts of the country at the same time.
Trademark can be assigned by way of Trademark Assignment Agreement which refers to the transfer of the mark from one person or an entity who is the owner of that mark to another. While drafting such agreement following points should be kept in mind:
It is also important while drafting a license agreement it is important to pre-determine and define the rights and duties of the licensee. It is important to not only protect the rights of the licensor in its own brand but also to secure the licensee with his rights to use such a brand.
With the help of the assignment agreement, the owner of the brand is able to unlock the value of the brand which was at this point only had value on papers. The assignee on another hand could be significantly better off entering a market with an already well-known brand, rather than building a new one entirely.
In case of any dispute which is related to the trademark, legal rights would easily be established only through the deed of assignment. The Registrar ensures that all the checks are in place by examining the validity of all the clauses which are mentioned in the agreement and publishing the assignment in the Trade Marks Journal.
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