Trademark Transfer in India by

Trademark is a type of Intellectual Property (IP) which signifies the brand that a company utilises to ensure that their product or service is distinguishable and easily identified by consumers from the rest of their competitors. Through registration, the companies can also safeguard their brand identity from duplication or being stolen by competitors. In India, the Trade Marks Registry, established in 1940, overseas the upholding of the Trade Marks Act, 1999. Its main aim is the registration and protection of the brands of enterprises while simultaneously prohibiting the illicit usage of the trademark.

The registration of trademarks in India, although, perpetual in nature through constant renewals, the overall maintenance of a trademark is costly. This may compel an individual to transfer their trademark registration, also known as the trademark assignment. Such a transfer is essentially a method wherein the owner of the trademark transfers the possession of the trademark. In other words, it is the transfer of the proprietary rights of the company. Primarily, owners will choose to assign their trademark or license such intangible properties to liquidate such assets. The trademark can be assigned or licensed on the event of the death of the trademark owner, when the business has been sold, when there has been a change in the name of the owner by a merger or amalgamation, or when the form of the business changes.

There are different types of trademark assignment, that is complete assignment, partial assignment, assignment with goodwill, and assignment without goodwill. In a complete assignment of logos, the owners transfers all of the rights in respect to the trademark. Amongst the many rights that are transferred the right to any transfer, the right to earn royalties, etc are vested to another company. In partial assignment there is a restriction in the transfer of possession to include a specific product or service. In this situation, the owner has the option to hold on to rights that they deem important. The assignment with goodwill is applicable in circumstances when the owner transfers the rights and price of the trademark in accordance to the selling point of the merchandise. Basically, the rights and the value associated with the mark are transferred for the use of it for the products and the services rendered that are already being sold by the transferor. An assignment without goodwill occurs when the owner places restrictions on the trademark for the merchandise that is being used. The assignor and the assignee in the last form of assignment use an equivalent trademark, but on products or services that are not the same.

The manner in which the assignment is recorded with the Register is dependent on whether the trademark is registered unregistered or registered. For an unregistered trademark section 39 of the Trade Marks Act, 1999 is applied and stipulates that the mark could be allotted or transmitted with the goodwill of the business. However, an invitation must be created on type TM-16. On the other hand, section 38 of the Act states that trademarks are usually allotted or transmitted partially with or without the goodwill of the company. All transfers has to register with the Registrar on type 23 or 23 of the trademarks. The fee structure of the assignment or transfer of a trademark is dependant upon the number of trademarks in question and the date of acquisition of the property.

The next step to be formulated in the assignment deed. It is imperative that the assignment deed should be written and the assignor’s name should correspond with the same as given in the Registrar. The deed should contain the territorial extent of the trademark transfer and the details of the trademark must be explained with clarity. Also, taxation must be calculated on the basis of the consideration and should be mentioned in the deed. An effective date should be specified and the final step is to mention whether there is goodwill or not.

As a end note, the recording of the trademark assignment should be recorded immediately. For instance, if the change in ownership is not done within a particular time frame, misconceptions amongst the consumers may arise. This may lead to harming the reputation of the brand or may fall short of showing the origin of the product or service. At times, the. new owner may be unable to claim the permissible rights such as filing a suit for infringement or making renewals. Failing to or delaying to record the transfer may lead to a loss of royalties. In the worst case, there will be no current license records and registered entries users. Ultimately this may impact the valid use by a licensor and the government approval, in regard to the remission of royalties, for foreign exchange authorisation. However if the recording is done on time, the assignment of the trademark will without doubt be successful. Trademark assignment or the transfer of trademarks is essential as it aids the trademark owner to preserve the goodwill and the brand.