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All about Trading Trademarks – Assignments, Mergers and Transmissions

Sonal Pruthi

| Updated: Jan 25, 2021 | Category: Trademark Registration

Trading Trademarks – Assignments, Mergers and Transmissions

This article is all about the trading trademarks for assignments, mergers, and Transmission. Assignment and Transmission are incorporated under the Trademark registration.

Trademarks are intellectual property[1]. They are identified as a distinctive mark, which helps to identify and differentiate the goods or services of one person to another. Here the mark is in its unique and distinctive form used by the proprietor to make it easily identifiable. In legal terms, it can be called as the name or symbol that a company uses on its products and that cannot legally be used by another company.

Definition of Trademark- Section 2(1) (zb)

Trademark as defined by the Trademarks Act as; a mark which is capable of being represented graphically, and which is capable of distinguishing the goods or services of one person from those of the others, which includes the shape of goods, their packaging, and combination of colours.

A trademark concerning services is that where the mark is used concerning the services, for the purpose of indicating the course of trade between the goods or services, and the person has the right to use the mark.

What is Assignment of Trademark- in the concept of Trading Trademark?

According to section 2(1), (b) – assignment means, an act by the parties in writing. An assignment will be through an instrument in writing, between the assignor and assignee and executed by them.

The assignment is not a unilateral act between the parties. It must be executed by both parties.

The assignment of trademark means, transfer of an owner’s rights, title, and interest in a trademark, or service mark.  The transferring party transfers the right to the receiving part. This means the assignor is moving to the assignee.

Features of Assignment of Trademark within Trading Trademarks

Features of Assignment of Trademark within Trading Trademarks
  1. Section 37- It is the section which deals with the assignment of the trademarks. This section says that the registered owner can assign his rights in a trademark to any other person.

According to the section, the registered owner has the right to assign the Trademark after receiving the consideration. It shows in correspondence of the act that the registered trademark owner has the right to vest the rights of a trademark in any other person. This is a process of assignment and gives the effectual receipts for any consideration for such assignment.

  1. There is a difference between the assignment and license. Where the license means that, a grant of permission to use the mark where no transfer of ownership in the mark takes place.
  2. It can be concluded that, a registered trademark is assignable and transmissible, in respect of all the goods or services in respect of which Trademark is registered.

Transmission of Trademark under Trading Trademarks

The Transmission of Trademark means where the Trademark is transferred by the operation of law or devolution on the representation of the deceased person. This is not an assignment. Where the Trademark is transferred due to some reason of law and transferred to his legal representatives. It can be well said that any mode which is not assignment but is a transmission. It can be with respect to goods or services and restricted to some goods or services and it can with goodwill or without goodwill.

How Trademarks are Assigned or Transmitted in the trading Trademarks?

The trademarks are both assignable, transmissible, or can be merged. The trading trademarks cover the concepts of assignment, Transmission and merger of Trademark. The current system, followed by the Indian Trademark, allows for the record, changes in the details of the owner of mark, under two methods:

  1. Changes due to assignment/ Transmission
  2. Change of the name of the proprietor- by the merger

Examples for the –Trading Trademarks

Here are some situations, where the assignment or Transmission is recorded:

  1. Company X sells its Trademark to Company Y- This means trademark assignment.
  2. Company X merges with Company Y- Both have their Trademark and merges to form Company Z. Company Z has no trademark of its own. Here the merger will lead to Transmission of the Trademark.
  3. Company X merges with company Y. Here the company X has its Trademark but the company Y now owns the Trademark as the XY. This is the classic case of a merger. Where there is the transfer of rights by the Company X. Here, the assignment of the Trademark by Company X to company Y should be done.
  4. Where there is a change in the structure of the partnership firm, which means, there is a death or retirement of either partner, then the Trademark owned by the partner shall be transmitted/assigned/ transferred to the new partnership.

Types of Assignment or Transmission- under Trading Trademarks

There are multiple ways of the assignment or Transmission of the trademarks under trading trademarks.

  1. Assignment in full capacity to other entity

This means where the owner transfers the exclusive rights to the other firm or entity. There is complete transfer of ownership of trademarks by one person to another.
Here the owner of the Trademark earns the royalties from the complete transfer or giving ownership of the Trademark.

  1. Partial Assignment- Assignment in respect of described goods or services

Here the assignment is restricted to the transfer in respect of specific goods or services. Such as assignment of the bakery items which is limited to particular breads or biscuits only.

  1. Assignment because of goodwill

This means that the rights and value of a trademark is associated with the product, is also transferred to another entity. The brand X transfers the rights over the Bread and any new development or creation related to the Bread will also be transferred to them.

  1. Gross Assignment-Assignment Without Goodwill

This means where the owner of the brand restricts the buyer’s rights and does not allow him to use such brand for the products being used by the original owner.
The goodwill attached to the brand concerning such a product already being sold under such brand is not transferred to such buyer.
Such as where the brand X is transferred to the proprietor, but he cannot use the goodwill attached to the brand in the bakery, he will have to develop his goodwill with respect to the product he transferred.

Conclusion

It can be concluded that the trading trademarks when the merger of entities occurs, then the Assignment or Transmission trademarks is performed. Like trademarks, the trading trademarks – Transmission and assignment is incorporated under Trademark Registration.

There are some restrictions which are attached to the trademark assignment or Transmission where the Trademark causes the confusion in the minds of the consumer, it will not be transmitted or assigned. It means where it is of- same goods or services, same description of goods or services or where the description of goods or services is with respect to the associated goods or services.

It can be well said that whenever there is any change in the owner, it has to be informed to the registrar of the Trademark. Whether there is any assignment or Transmission or merger.

Read our article:Step by Step Trademark Registration Procedure

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Sonal Pruthi

She is B.Com (H), LL.B LLM, Cs (Module 2) And Certification In Cyber Law From ILI Qualified. She has Been A Legal Teacher In The Previous Organization. My Strength Is My Expertise Knowledge In Civil Laws, Corporate Law And Tax Laws. I Have Been Legal Teacher And Legal Trainer In The Past Organization. Her Knowledge About The Subjects Have Expanded Due To Teaching Number Students From Various Universities All Over India.

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