Assignment and Transmission of Trademark

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Assignment and transmission of trademarks involve transferring ownership rights from one party to another. The Trademark Act provides guidelines and conditions for such assignments and transmissions, distinguishing between assignments with or without the goodwill and specifying requirements for registration and documentation.

Meaning of Assignment and Transmission of Trademark

Assignment and transmission of a trademark refer to the legal process by which the ownership rights of a trademark are transferred from one person or entity to another. This process involves the transfer of the exclusive rights associated with the trademark, which can include the right to use, license, sell or enforce the trademark.

The assignment of a trademark involves the complete transfer of ownership from one party to another. In this case, the assignee (the party receiving the trademark rights) assumes full control and responsibility over the trademark, including the right to use it exclusively for their own commercial purposes. The assignor (the party transferring the trademark rights) relinquishes all rights and interests in the trademark.

On the other hand, the transmission of a trademark typically refers to the transfer of ownership rights in situations where the original owner passes away or there is a change in the ownership due to legal proceedings, inheritance or other circumstances. Transmission may occur through the distribution of assets in a will, the settlement of an estate or a court order.

Both registered and unregistered trademarks can be assigned or transmitted. A registered trademark is one that has been officially registered with the relevant trademark office, providing the owner with statutory rights and protection. An unregistered trademark refers to a mark that has not been formally registered but may still possess some degree of protection based on common law or other legal principles.

Types of Assignment and Transmission of Trademark

Complete Assignment and Transmission

Complete Assignment refers to the transfer of all rights associated with a trademark from one individual to another. This includes the rights to further transfer the trademark, receive royalties and exercise full control over its usage. For instance, if proprietor ‘X’ sells all rights of a trademark to proprietor ‘Y’, ‘Y’ becomes the exclusive owner with the freedom to use the trademark as desired, transfer it to others, set guidelines for its usage and receive royalties. No approval from ‘X’ is required in this case.

Partial Assignment

Partial Assignment involves the transfer of ownership restricted to specific services or products. For example, if proprietor ‘X’ has a trademark (♛) related to men’s lifestyle products but only wants to assign it to shoes, ‘X’ can transfer the trademark to ‘Z’ with the condition that ‘Z’ can only use it for shoes. ‘X’ retains the right to use the trademark for all other products. This type of transfer is known as a partial assignment.

Assignment with Goodwill

Assignment with Goodwill refers to the transfer of a trademark along with all the associated rights and values from one person to another. For instance, if ‘X’ assigns and transfers their trademark (♛) to ‘Z’ with all rights and values intact, ‘Z’ gains full rights to use the trademark for men’s lifestyle products or any other future products they manufacture.

Assignment without Goodwill

Assignment without goodwill involves the transfer of a trademark in a way that allows its use for purposes other than the original one. For example, if ‘X’, who deals with men’s lifestyle products, assigns and transfers their trademark (♛) to ‘Z’ with the condition that ‘Z’ can use it for any product except men’s lifestyle products.

Conditions for assignment and transmission as given in section 42

Section 42 of the Trademark Act outlines the conditions for the assignment and transmission of a trademark, specifically when it is not associated with the goodwill of a business. According to this section, the assignment or transmission of a trademark without goodwill will only be effective if the assignee applies to the registrar for directions regarding the advertisement of the assignment. 

The assignee must advertise the assignment within the timeframe specified by the Registrar, which should not exceed six months from the date of the assignment or an extended period of three months if permitted by the Registrar.

However, if the trademark is assigned along with the goodwill of the business for specific goods and services, it will not be considered an assignment without goodwill. Additionally, if the assignment includes goods for export or services used outside of India along with the assignment of goodwill, it is permissible.

Restrictions on Assignment of Trademarks

The Trademark Act imposes certain restrictions on the assignment and transmission of trademarks to prevent confusion among users or the general public. These restrictions include

  • Restriction on assignment or transmission that would create multiple exclusive rights.
  • Restriction on assignment or transmission that would create exclusive rights in different parts of India.

Process of Assignment and Transmission of Trademark (Section 45)

The process for the assignment and transmission of a trademark, as described in Section 45 of the Trademark Act, involves the following steps:

  • Application to the Registrar of Trademarks using Form TM-P, along with duly certified original documents.
  • The Registrar will review the application and provide a decision within three months. The decision may include informing the applicant about the assignment or requesting additional proof if there are doubts.
  • If the assignment is approved, the Registrar will make an entry in the Register, including details such as the name and address of the assignee, the date of the assignment, a description of the rights assigned (if applicable), the basis of the assignment and the date of entry in the register.
  • In case of a dispute between the parties regarding the validity of the assignment or transmission, the registrar may refuse to register it until the rights of the parties have been determined.

Assignment and Transmission of Registered Trademark (Section 38)

Section 38 of the Trademark Act states that a registered trademark can be assigned and transmitted, with or without the goodwill of the business associated with it. This can apply to all the goods or services covered by the registered trademark or only to a specific subset of goods or services.

Assignment and Transmission of Unregistered Trademarks (Section 39)

According to Section 39 of the Trademark Act, an unregistered trademark can also be assigned or transmitted, with or without the goodwill of the business concerned.

Benefits of Assignment and Transmission of Trademark

Expansion of business: By assigning and transmitting a trademark, the owner can expand their business by using the same trademark in multiple locations simultaneously. Additionally, partial authority can be given to assign the trademark to more than one person.

Leveraging an established brand: Assigning and transmitting a trademark allows the assignee to benefit from an already established brand in the market, saving them the effort and resources required to create a new brand.

Legal proof: The assignment and transmission of a trademark serve as legal proof in case of any disputes related to trademark usage. The rights and liabilities associated with the trademark are clearly outlined in a legal document.

Monetary benefits: The owner of the trademark can enjoy monetary benefits through the assignment and transmission process, including any financial gains resulting from the assignment or transmission. Furthermore, operating with the same trademark in multiple locations can increase the value of the brand.

Structural Waterproofing and ORS v. Amit Gupta ORS [93 (2001) DLT 496]

In this case, a dispute arose regarding the assignment and transmission of a trademark. The court highlighted that the registrar has the authority to refuse the registration of the assignment and transmission until a decision is made by the competent court. The plaintiff claimed ownership of the trademark based on a Memorandum of Understanding (MoU) between the parties. 

However, the court rejected the plaintiff’s request for an injunction against the defendant. The court emphasised that a change in the name of the registered proprietor does not automatically render the trademark unsuitable.

Cinni Foundation v. Raj Kumar Shah and Sons [2009 (41) PTC 320 (Del)]

In this case, the trademark “CINNI” was being used by the owner. A deed of assignment had been executed and signed between the parties. However, it was later discovered that the trademark was not registered. The defendant attempted to claim rights over the trademark. The court ruled that according to the law, the assignee acquires no title to the trademark without the registration of the assignment deed. Consequently, the defendant’s claim to the trademark was dismissed.

These cases illustrate the importance of registration and proper documentation in the assignment and transmission of trademarks. Registration provides legal protection and establishes ownership rights, while adherence to the legal requirements ensures the validity and enforceability of the assignment or transmission of the trademark.

Difference between the Assignment and Transmission of the Trademark

Assignment and transmission are two terms often used interchangeably, but they are distinct concepts according to Section 2 of the Trademark Act. In the case of trademark assignment, there is a transfer of ownership of the registered trademark to another party. On the other hand, in the case of trademark transmission, the original owner retains the rights to the trademark but grants limited rights to a third party for its use.

For instance, let’s consider the example of X, the current owner of the trademark “œ,” who decides to assign the trademark to Y. In this scenario, X relinquishes ownership of the trademark and after a proper assignment process, Y becomes the registered owner with full rights to the trademark.

However, if X chooses to transmit the trademark instead, it means that X remains the original owner of the trademark, but grants limited rights and responsibilities to Y for its use.

DefinitionTransfer of ownership rights from one party to anotherPassing of rights to a third party while retaining ownership
OwnershipOwnership of the trademark is transferredOwnership of the trademark remains with the original owner
RightsFull or partial rights depending on the terms and conditionsRestricted rights granted to the third party
GoodwillCan be with or without the goodwill of the businessCan be with or without the goodwill of the business
RegistrationAssignment of a registered trademark requires registrationTransmission can be of a registered or unregistered trademark
Legal ProofActs as legal proof in case of disputes or challengesActs as legal proof in case of disputes or challenges

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