A trademark serves as a unique identifier of goods or services, distinguishing them from others in the marketplace. In India, the rights over a trademark are protected under the Trade Marks Act, 1999, which provides a framework for its registration, use, and enforcement. Among the important aspects governed by the Act are assignment and transmission of trademarks, which allow the transfer of ownership or rights to another entity.
Trademark Assignment in India
Trademark Assignment refers to the process where the rights, title, and interest in a registered or pending trademark are transferred by the owner (assignor) to another person or entity (assignee). This transfer can be partial or complete, depending on the terms agreed upon between the parties.
Types of Assignment:
- Complete Assignment: In this type, the assignor transfers all rights over the trademark, including the right to further transfer, earn royalties, or use the trademark. The assignee assumes full control and the assignor relinquishes any interest in the trademark. For example, if Company A sells its trademark Company B, Company B becomes the soler owner the trademark.
- Partial Assignment: Here, the rights over the trademark are transferred only for specific goods or services. The assignor retains rights to use the trademark for other categories.
- Assignment with Goodwill: in this case, the goodwill associated with the trademark is transferred along with the trademark rights. Godwill refers to the value and reputation the trademark has built in connection with the specific goods or services. An assignment with goodwill means that the trademark can continue to be used in the same way it was associated with those goods or services before the assignment.
- Assignment without Goodwill: This type of assignment also called a gross assignment, transfers the trademark but not the goodwill associated with the business. As a result, the assignee can only use the trademark for goods or services not similar to those previously associated with the assignor. This form of assignment is rare, as trademarks are often closely tied to the goodwill of a brand.
Trademark Transmission
Trademark transmission is a process that occurs automatically or by the operation of law, usually in situations like inheritance, bankruptcy, or company mergers. Unlike assignment, which is a voluntary transfer of rights, transmission is often involuntary.
Tyes Of Transmission
- By Inheritance: When the original trademark owner dies, the ownership of the trademark is transferred to the legal heirs or successors. The heirs need to apply for transmission with the Trademarks Registry, providing proof of succession, such as a will or a legal heir certificate.
- By Operation of Law: Transmission may occur as a result of legal action, such as bankruptcy or liquidation. In such cases, the trademark may be sold off to pay creditors, and the buyer becomes the new owner.
- Corporate Merger or Amalgamation: When two companies merge, the trademarks owned by the merging entities are typically transferred to the new merged entity through transmission.
Key Differences Between Assignment and Transmission
| Basis | Assignment | Transmission |
|---|---|---|
| Definition | Voluntary transfer of ownership of a trademark by the proprietor to another party through an agreement | Transfer of ownership of a trademark by operation of law (e.g., inheritance, bankruptcy) |
| Nature | Deliberate and consensual transaction between parties | Involuntary or automatic transfer due to legal circumstances |
| Process | By executing an agreement by both the parties (Assignor and Assignee) | Automatic upon legal circumstances but requires registration with the TM Registry |
| Control by Owner | Owner has full control over deciding to transfer the rights | Generally outside the owner's control, happening due to legal events like death or insolvency. |
| Consideration | Involves consideration (payment) between parties | No consideration is involved as it occurs by law |
| Goodwill | Can be assigned with or without goodwill | The transfer usually includes the trademark as a whole, including goodwill |
| Example | A company sells its trademark to another company with/without goodwill | A trademark passes to the heir of a deceased proprietor |
In both the cases, registering the assignment or transmission with the Trademark Registry is essential to make the transfer legally enforceable.
Conclusion
The assignment and transmission of trademarks in India are important tools for businesses to transfer ownership or rights over their brands, either voluntarily or by law. Governed by the Trade Marks Act, 1999, the process ensures that trademarks, as valuable assets are protected, commercialized and utilized efficiently. Whether expanding to new markets, transferring ownership in the event of inheritance, or reorganizing after a merger, understanding the nuances of trademark assignment and transmission is crucial for brand owners.
Disclaimer: This article was first published in the S&A Law Offices - 'Intellectual Property (IP-Tech)' newsletter in September 2024.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
