This article on ‘Assignment of Trademarks: All you need to know’ was written by Shashanki Kaushik, an intern at Legal Upanishad.
This article provides a comprehensive overview of the assignment of trademarks in India, focusing on the legal framework, relevant legislation, landmark judgements, and practical considerations. Understanding the nuances of trademark assignment is vital for businesses seeking to protect their intellectual property rights. In India, this process is governed by various laws, including the Trade Marks Act of 1999 and the Trade Marks Rules of 2017. This article explores the intricacies of trademark assignment, touching upon key aspects, legal provisions, and notable case law.
Assignment of Trademarks: Concept and Laws
Trade Marks Act, 1999, Section 2(1)(b): Definition of Assignment: The Act defines ‘assignment’ as the transfer of ownership, either with or without the goodwill of the business.
Section 37: Requirements for Assignment: This section outlines the essential requirements for a valid trademark assignment, including the need for the assignment to be in writing and signed by both parties.
Trade Marks Rules, 2017, Rule 68: Application for Assignment: Rule 68 specifies the procedure for filing an application for the assignment of trademarks, along with the prescribed form and fees.
Types of Trademark Assignment
- Complete Assignment- A complete assignment involves the transfer of both the trademark and the associated goodwill.
- Partial Assignment- Partial assignment entails the transfer of the trademark without the goodwill of the business.
- Assignment with Goodwill- Assignments that include goodwill are more common and ensure the new owner can benefit from the established reputation and customer base.
- Assignment without Goodwill- Assigning a trademark without goodwill is less common and may occur when the assignor intends to retain the business’s reputation.
Legal Procedures for Trademark Assignment
- Application to Registrar: The assignor and assignee must file a joint application with the Registrar of Trademarks for the assignment’s approval.
- Advertisement and Opposition: After acceptance, the Registrar will advertise the assignment application. Interested parties have the opportunity to oppose the assignment within the stipulated period.
- Issuance of Certificate: Upon successful completion of the assignment process, the Registrar issues a certificate, signifying the new owner’s rights over the trademark.
- Ravi Kamal Bali v. Kala Tech and Entertainment (P) Ltd.
This case reaffirmed that an assignment without goodwill does not affect the validity of the assignment.
- Indian Performing Right Society Ltd. v. Dalia
In this judgement, it was held that the assignee could enforce trademark rights against third parties, even without registering the assignment.
- Due Diligence: Both parties should conduct thorough due diligence before entering into an assignment agreement, ensuring the trademark’s validity and reputation.
- Clear Agreement: The assignment agreement must be clear and comprehensive, specifying the terms, conditions, and considerations involved.
- Record Keeping: Maintaining accurate records of the assignment is crucial for future reference and potential disputes.
- Post-Assignment Compliance: The assignee must ensure compliance with ongoing trademark maintenance, including renewals and protection against infringement.
Tax Implications of Trademark Assignment
Trademark assignment can have significant tax implications for both parties involved. The consideration received or paid for the assignment may be subject to capital gains tax or other taxes, depending on the specific circumstances and applicable tax laws. It is crucial for both parties to seek professional tax advice to ensure compliance with tax regulations.
Licensing vs. Assignment
Franchising and Trademark Assignment
Franchising often involves the assignment of trademarks to franchisees. This allows franchisees to operate under a recognized brand, benefiting from the established reputation and marketing efforts of the franchisor. Franchise agreements typically include detailed provisions regarding trademark usage, quality control, and territorial rights. Careful consideration of trademark assignment is essential in the franchising context to maintain brand consistency and protect the trademark’s value.
International Enforcement of Trademark Assignment
Enforcing trademark assignments across international borders can be challenging due to varying legal systems and regulations. Businesses engaging in cross-border trademark assignments should consider international treaties such as the Madrid Protocol and the Paris Convention, which provide mechanisms for protecting trademarks in multiple countries. Additionally, legal counsel with expertise in international trademark law is essential to navigate the complexities of enforcing trademark assignments globally.
Paris Convention for the Protection of Industrial Property (1883): India, as a signatory to the Paris Convention, recognizes the principle of national treatment for foreign trademark owners, providing a basis for international trademark assignment.
TRIPS Agreement (1994): The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, part of the World Trade Organization (WTO), sets minimum standards for the protection of trademarks and includes provisions related to trademark assignment.
International Trademark Assignment
Madrid Protocol: Under the Madrid Protocol, businesses can efficiently protect their trademarks in multiple countries by filing a single international application. India became a member of the Madrid Protocol in 2013, facilitating international trademark assignments for Indian businesses.
International Trademark Assignment Case Study: Coca-Cola: Coca-Cola’s global presence is a prime example of an effective international trademark assignment. Through careful planning and legal strategies, the company has maintained consistent branding worldwide.
Trademark assignment is a vital aspect of intellectual property management in India. It provides opportunities for businesses to monetize their assets or expand their market presence. However, navigating the legal framework, complying with procedures, and safeguarding interests require careful consideration. As demonstrated through relevant legislation and case law, understanding the intricacies of trademark assignment is indispensable for both assignors and assignees in India.
List of References
- Mayashree Acharaya, ‘Assignment of Trademark’, CLear Tax, 22 February 2022, available at: https://cleartax.in/s/assignment-of-trademark
- ‘Assignment and Transmission of Rights’, Selvam & Selvam, available at: https://selvams.com/kb/in/trademarks/assignment/
- ‘Trademark Assignment’, Corpbiz, available at: https://corpbiz.io/trademark-assignment