Why Does a Trademark Assignment Need to Be Notarised?

Trademark is an intellectual property of a business and constitutes any design, words, or expressions that are unique to a business and makes it identifiable to the business. The trademark is registered by the business and all the rights of usage lie with the business.

What is a Trademark Assignment?

The trademark can be transferred to a third party either by license or assignment. The assignment of the trademark is the transfer of an owner’s right, title, and interest in a trademark or service mark. The assignment of the trademark is transferring the ownership, unlike licensing, which is only the permission to use the trademark. The one who assigns the trademark is the assignor, and the one who it is assigned to is the assignee.

The reason for an assignment can be that the maintenance of the intellectual property in terms of maintaining registrations, defending third party claims, and creating and marketing the trademark can be very draining for the company’s resources. So the business decides to sell off that is to assign the trademark and monetize the intellectual property. It could be a standalone sell-off or as a part of the sale of tangible and intangible assets of the business.

Why Notarising a Trademark Assignment is Important?

The notarisation of the assignment is in the benefit of the assignee. Also, notarising is important so that it is established that there is no possibility of wilful document fraud relating to the assignment. And so the assignment must be notarised on the right stamp duty. Further, the assignor must also submit an affidavit which is notarised mentioning that the trademark is truly theirs.

Types of Trademark Assignment

There are four types of trademark assignments:

• Complete Assignment: The assignment of all rights with respect to the right to sell, earn royalties relating to the trademark to the proprietor, is called a complete assignment. Also, complete assignment refers to the assignment of trademarks pertaining to all goods and services.
• Partial Assignment: The assignment of trademarks pertaining only to certain goods and services is termed as a partial assignment. A business having multiple goods and services can choose to assign only a certain product or service and retain the rest. This is a partial assignment.
• With Goodwill: Goodwill of a business is the brand value of the business. When the assignment of the trademark is with goodwill, the proprietor gets to use the brand value of the trademark as well. The proprietor can use the trademark for the same line of business. For example, Mr. X sells the trademark of his electrical appliances business named ‘Mony’ to Mr. Y. Mr. Y can take over the trademark and the brand value and continue the same business. Here Mr. Y earns the trust of the consumers of Mr. X as the consumers attach quality to a particular brand.
• Without Goodwill: The assignment is done only for the trademark and not the associated brand value. The proprietor must use the trademark for another line of business. Taking the same example as above if Mr. X sells the trademark without goodwill, Mr. Y cannot use the brand name ‘Mony’ for the same line of business, that is electrical business.

Elements of a Valid Trademark Assignment

The elements that are mostly required for the assignment to be valid are as follows:

• The assignment must be in writing; it must be a valid legal agreement.
• It must recognise the parties to the assignment that is “assignor” and “assignee”.
• It must identify the trademark(s) to be assigned and its relevant registrations.
• It must also identify the goods and services to be assigned.
• It must have the date of the assignment.
• It must also mention the consideration for the assignment.
• Warranties regarding the trademark.
• It must have signatures of both the assignee and assignor.
• It must be notarised.

Procedure to Record a Trademark Assignment With the Registrar

The trademarks can be registered trademark or unregistered trademark. The process for recording the assignment of the two types is as follows:

• Registered Trademark: Section 38 of the Trade Marks Act, 1999, stipulates that the trademarks can be assigned in full or in part, with or without the goodwill of the business. For a registered trademark, the assignment must be registered with the Registrar of Trademarks on Form 23 or Form 24 of the Trade Marks Act, 1999 (read with Rule 68 of the Trademarks Rules 2002).
• Unregistered Trademark: Section 39 of the Trade Marks Act, 1999, stipulates that the trademarks can be allocated with or without the goodwill of the business. The request has to be made in Form TM -16 for an unregistered trademark to be assigned.

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