Assignment of Trademarks in India

Similarly to other property rights, intellectual property rights allow their owners and creators to reap the benefits of their own efforts and investments. Owners of Intellectual Property receive exclusive rights over such property upon registration. It is possible for the owner of intellectual property, or IP, to assign the property or license it to another party for either and receive royalties for doing so. Here, we will discuss an assignment of trademarks specifically.

Trademark Assignment

In legal terms, the transfer of ownership and rights to a trademark to another entity or person is referred to as Trademark Assignment. Additionally, an assignment can be partial, commonly known as licensing. Moreover, the trademark can be assigned with or without the goodwill of the business, either in respect of all goods or services or a portion of them. Normally, trademarks are assigned by signing an agreement referred to as a Trademark Assignment Agreement. In order for an assignment agreement to be valid, the assignor must demonstrate an intention to transfer ownership of the mark in full or in part.

Even though an assignment is a contract between two or more parties, there are some cases where it can be restricted.

The assignment creates exclusive rights for more than one person with respect to the same goods or services. As an example, assigning a trademark to X who provides health care services and also to Y who provides health care services and manufactures health care goods would not be permitted since it creates exclusive rights for two parties at once.

The assignment is not permitted if multiple individuals in different parts of the country use the assigned marks simultaneously.

There are several types of trademark assignment in India

The assignment of a trademark is governed by a number of types. Depending on the parties' needs and requirements, the assignment agreement will be drafted according to the type to which they belong.

Assignment completed

All of the rights vested in the registered trademark are assigned to a third party in this instance. The assignee then enjoys all the rights that the original trademark owner enjoyed. As the sole owner of the trademark, the assignee would have the right to assign, trade, and market it, as well as prevent others from using it without permission.

Partial Assignment

This type of assignment restricts the transfer of ownership to a specific set of products/services, according to the agreement between the parties. As an example, if the owner of an owa trademark specifies in the assignment agreement that the assigned trademark can only be used for food products that are suitable for human consumption, the assignee can only use the assigned trademark. The mark cannot be used for other goods or services except food products.

With or without the assignment of goodwill, the complete and partial assignment can now be made.

A goodwill assignment

Assignations with goodwill include the rights and value associated with the trademark for the products and services the assignor is already selling.

In the case of “OWA”, where X has trademarked the production and sale of shoes, he can assign the trademark as well as allow the assignee to use it for the same product and activity for a manufacturer and retailer of shoes.

No goodwill attached to the assignment

Assignors are allowed to restrict the assignees' rights for products already being used by them. This outcome allows both assignors and assignees to use the same trademark in distinct products.

Buying the trademark "owa" without the goodwill can enable the assignee to use it for any other product the trademark covers but not shoes. For example, if the trademark "owa" is used for making and selling shoes and is assigned without goodwill, the assignee has the right to use it for any other product the trademark covers.

Assignment of trademarks has many benefits

Identify the monetary value of your trademark

There are many advantages to encash the value of a brand; however, the TM owner is also able to obtain this value through assignment, which is only documented on paper.

By assigning a brand, owners receive consideration in terms of royalty or otherwise for their efforts.

Lotte Confectionery has acquired partial rights to Havmor Ice Cream, an Ahmedabad-based brand, for INR 1020 crore.

Both assignors and assignees are secured

As part of the assignment process, both parties sign the Trademark Assignment Agreement, which is a valid legal document that can be used in court in the event of a dispute. In order to avoid any obstacles in the future, the assigned mark is published in the trademark journal by the registry and the assignment agreement is adequately scrutinized.

Take advantage of a brand that is already well-established

A pre-recognised brand would certainly be a benefit to the assignee in terms of market share. Furthermore, the assignee would not have to invest a great deal of money, time and labour in creating and marketing the brand. Furthermore, if the mark is already registered, the assignee doesn't have to go through the lengthy registration process.

Increasing business operations

As another assignment type, licensing grants both assignors and assignees the right to associate the brand with their respective businesses. This would increase the value of the brand if all of the parties worked together. Furthermore, the assignor can expand the business by inviting more vendors to contribute to brand building with the partial assignment. A Lotte Confectionery (assignor) brand was also considered by the chairperson to be the right brand for Havmor.

Conclusion

With the right strategies, brand assignment can open up vistas of opportunities. The concept of assignment involves some planning for the future of the parties involved and the brand in question. Developing, propagating, and using a brand all lie in the hands of the proprietor, so an assignment is an effective means of managing the same. By assigning brands, you are ensuring that they remain alive, which has a number of benefits for both assignees and assignors.