Assignment of Trademarks in India
The assignment of a trademark takes place when the ownership of such trademark is transferred from one entity to another, which may either be along with or without the goodwill of the trademarked business, and which has to be recorded in the register of trademarks.
Following is the process of assignment of trademark in India:
- Complete Assignment of trademark from one entity to another: The owner transfers all his rights held in the trademark to the other entity.
- Assignment of trademark with respect to only certain goods and services: Here, the ownership of trademark is limited to only certain products or services. For example, “A” is the owner of a brand and uses his trademark for selling computers, television sets and air-conditioners. “A” assigns “B” the rights in the brand with respect to only the Air-conditioners, and whereby “A” retains the rights in the brand with respect to computers and television sets.
- Assignment with the goodwill: Here, the absolute ownership over the rights and value of a trademark associated with the product is transferred from one entity to another. For example, ”A” is the owner of a brand and uses his trademark for selling computers. “A” sells his brand to “B” whereby “B” retains all such rights vested in the brand, and can use the brand trademarks for selling computers as well as other electronic products of his choice.
- Assignment without the goodwill: The assignment without goodwill is also known as “gross assignment”. Here, the assignment refers to restrictions of rights of the buyer whereby it limits the new owner of using the brand on products that the original owner is already For example, “A” is the owner of a brand and uses his trademark for selling computers. “A” sells his brand to “B” such that “B” will have no rights to use the brand trademark for selling his computer products. However, “B” can use the brand trademark in the chain of businesses other than computer.
Licensing of a Trademarks in India
The licensing of a trademark allows the licensee to use the trademark, albeit the trademark itself is not assigned to the other entity, that is to say, the ownership has not been transferred but the mere use of the trademark is permitted to be used by the licensee.
Licensing of trademark has a plethora of benefits for both entities. Here, the licensor may enjoy his rights to the trademark by generating royalties for its use, whereby the licensee is able to broaden his market chain operations by using the said trademark for building reputation and brand value.
In layman words, a licensor has the right to license his rights over the trademark as he may be pleased with, such as by restricting the rights of the licensee in the trademark with respect to products or services. The licensor may restrict the time and area within which said trademark can be used by the licensee with respect to the product and services.
Agreements for Transmission
Trademark assignments are generally executed by way of trademark assignment agreements under which the transmission of transfer takes place from one entity to another.
The following points are to be ensured while drafting such agreements for the assignment and licensing of trademarks in India:-
- That the rights of the trademark brand do not tend to cause harm due to obligations prescribed in such agreement.
- The provision with regard to assignment is with or without the goodwill of the business should be properly negotiated and explicitly mentioned in the agreement.
- The agreement must be drafted in accordance with the purpose of the transaction in question.
- The rights and duties of licensee must be distinctively pre-determined and defined.
- The license agreement should be registered with the trademark Registrar, although it is not compulsory but in a legal prospective it is most advisable.
Understanding the process of assignment and licensing of trademarks in India is a paramount issue. The process of marketing and strategic management would surely open a plethora of broadening horizons in this domain, for the licensor and licensee likewise. It all depends upon the development of a brand, and the use of the brand, which collectively form a factor to boost marketing in various sectors.