Registration of Trademarks and licensing: Limitations on transfer of Goodwill
This article on Trademark Registration is written by Manish Kansra. A 3rd year law student from Himachal Pradesh University, and an intern at Legal Upanishad.
We all are aware of the marks, visuals, symbols which we see on the articles which we buy from the market. Brands also do a lot of advertising to promote their band name and their trade mark. Whenever we go to market to purchase stuff, we many times ask for reputed brands. Now the question arises can any person copy someone’s brand name or trademark and start his own production? Are these band names protected? If yes, is it my property? Can I transfer it? How can I transfer it? How can I register my trade mark? This article would brief you about all such questions.
What is a Trademark?
Trademark is a visual symbol in the form of words, label applied on the goods. Its main objective is to distinguish goods from similar goods and also to create a separate identity. Person selling goods with a particular trademark has the exclusive right to make use of the trademark. Such rights are recognized as a form of property under Trade Mark Act 1999. The concept of trade mark is based on the concept of distinctiveness of similarity of marks and similarity of goods (Role Of Goodwill In Transfer Of Trademark – Intellectual Property – India, 2021).
Function of trademark
The function of a trademark is to give an indication to the customer as to the manufacture or quality of the goods, to give an indication of the trade source from which the goods come. It tells the person what he is going to buy. It gives a purchaser a satisfactory assurance of the make and quality of the article he is buying. Under modern business conditions a trade mark performs four functions:
1) It helps in identity and its origin.
2) It guarantees its unchanged quality.
3) It advertises the product and
4) it creates an image for the product.
Steps involved in Registration of Trademarks
Registration of trademarks provides us with exclusive rights to sue the person who have used the visuals, symbol, logo etc. of the company. It provides us with a great legal support. Trademarks are very essential for the business as they are also the important assets of business.
In India following steps are to be followed for registration of trademarks
1) Choosing of Distinctive brand name
It is very important to decide a unique and distinctive brand name. Choosing a brand name is not easy, which is different from others and seems attractive to customers. It shall be selected very wisely. One selected it can’t be altered in future. Even if one thinks to do so. It requires a lot of legal formalities.
2) Research for similar names
After you have selected your brand name, we need to do research for the similar names in the market. If some companies are already registered with the same trademark, then the trade mark would get rejected.
3) Class Selection
Trademarks could be registered in a total of 45 classes. Each trade mark is classified into different types of classes. Trademarks of one class could be used in different classes unless such is done for the sole purpose of profits. But such grants are provided after examination of all facts.
4) Filling of application form
People could easily fill e-form. With e-form following documents shall be attached. First business identity proof which shall contain which form of business is being carried out sole proprietor or partnership or company etc. Second it shall contain trademark copy along with any specific dimensions if person wants to specify.
5) Verification by Registrar
Once the form is submitted the registrar will verify the logo and brand name that it does not match with that of the others. He would even check if it violates any rules.
6) Invitation for opposition
Once the verification is done by the registrar. He shall publish with application so that if anyone has any objections one could inform it to the registrar. Any person could apply for the objection within 3 months.
7) Registration of Trademarks
If no objections are raised on the application, then the registrar shall issue the Trade Mark Certificate. Such a certificate gives us the power to use “R “next to our brand name. It signifies that our trademark is registered.
Validity of Registration of Trademarks
Trademark is registered for the time period of 10 years from the date of applying. For renewal, it could be renewed for any number of times. But it shall be noted that application for renewal shall be filled before expiry of 10-year time period. (Assignment and Licensing of Trademarks in India – iPleaders, 2021)
Section 49 of the Indian Trade Marks Act of 1999 deals with procedure for licensing a registered trademark in India. It’s not compulsory to get the license of the trade mark with the registrar. Although registering it is secure and beneficial. Getting our self-registered gives us a tool to file a suit against the infringer of the trademark. It even helps to keep control on the licensee that he further doesn’t license or sell it or misuse it.
Transfer of Goodwill
Goodwill is known as the reputation of business. It is determined on the overall working of the business. This might include the profits, prestige, popularity, bad image etc. It could be said that a trademark gets its value from the goodwill of the firm. Trademarks could even be assigned. When assignment is made with goodwill it means the assigner has handed over his absolute rights such as right to control, right to improvise or change the quality of the product. Transferee loses all rights to use the trademark. Trademarks could be assigned without the transfer of goodwill. In such cases, the right to use a name is only transferred. Transferee is bound by the terms and conditions of the agreement between them (Trademark Licensing in India, 2021).
Business’s sole purpose is to make profits. Profits of the company are very much related to the goodwill of the company. If a company is popular for its quality of product, definitely the company would be known by its name. So therefore, it becomes very important for companies to protect their name. We could also say that the name of the company is also a very important asset of the company. Therefore, the company should take all steps to protect its name.
Applying for a trademark may be a lengthy and expensive process but it not just protects your name but it even creates a name as a business property. Once can even sell the name of a company or can even license the trademark. The other person who buys the business not only has to pay for assets of the company but he has to pay for the trademark of the company.
Having a trademark not only provides us with the rights but it also provides us with some liabilities as if at a later stage it is found that a person already has such a trademark, at such a stage violation of trade mark can degrade the reputation of a business. therefore, while selecting the name and logo of brand owners of it shall be very creative and cautious.
1) Assignment and Licensing of Trademarks in India – iPleaders. (2021, november). From iPleaders: https://blog.ipleaders.in/assignment-and-licensing-of-trademarks-in-india/
2) Role Of Goodwill In Transfer Of Trademark – Intellectual Property – India. (2021, November 23). From Mondaq.com: https://www.mondaq.com/india/trademark/310330/role-of-goodwill-in-transfer-of-trademark
3) Trademark Licensing in India. (2021, November). From www.trademarksindia.net: https://www.trademarksindia.net/trademark-licensing/
4) Alter, B. H. (2010). Trademark registration can provide financial services companies with valuable benefits. Journal of Investment Compliance.
5) BHANDARI, S., KABRA, M., KUMAR, H., SINGH, S., & NEGI, K. (2013). LEGISLATION (INDIA TRADEMARK LAW). Asian Journal of Pharmaceutical Research and Development, 18-27.
6) Calboli, I. (2005). Trademark Assignment with Goodwill: A Concept Whose Time Has Gone. Fla. L. Rev., 57, 771.