assignment / licensing

Assignment is transfer of an individual’s right or property to another person or business.

Just like the owner of a land can transfer his property to another, an owner of a trademark or any other intellectual property can transfer his rights to another by way of assignment or licensing.

In assignment, the ownership of a trademark gets transferred to another with or without goodwill of the business. If the owner of a trademark (assignor) transfers his trademark to another person (assignee), the same needs to be recorded in the register of trademarks by filing relevant documents with the registrar’s office.

An order specifying the fact that there is a new owner of a trademark is issued by the registrar of trademarks upon filing of the relevant documents by the owner of the trademark. In case of an unregistered trademark, the registrar, upon satisfying himself on the documents submitted, issues the certificate of registration in the name of the new owner.

A trademark may be assigned completely or partially. A complete assignment means the assignor transfers all the rights to the assignee. Thereafter the assignor shall have no rights whatsoever on the trademark.

A partial assignment means the assignor transfers the ownership in respect of certain products only. For example an owner of a trademark in respect of several products may transfer the rights in respect of a particular product only to another person and may keep the other products with himself.

A trademark may be transferred with or without goodwill. With goodwill means, the owner transfers all the goodwill and reputation to the assignee. Without goodwill means the assignor restrict the assignee to use the trademark for the products he uses it for. For example, the owner of a trademark in respect of say garments may allow use by another person the same trademark in respect of goods other than garments.

Licensing is not defined under the Act. However, under licensing, the owner of a trademark allows for use on certain terms and conditions, the use of the trademark by another person. The terms and conditions generally will include the royalty payable by the user (licensee) to the owner (licensor). The licensing may be on exclusive or non exclusive basis. This means that the licensor may or may not appoint more than one licensee in the same or in different areas/regions/cities/countries. In international trade, licensing is in the present day much more extensive and it has now become almost an indispensable tool of business organization on an international level.

The Registered proprietor (Licensor) and the proposed registered user (Licensee) shall apply jointly to the Registrar in the prescribed manner enclosing with the application an agreement in writing entered into between both of them. They shall also submit an affidavit made by the registered proprietor giving particulars such as relationship between both of them, description of goods and services involved, stating conditions or restrictions if any, and also mentioning the period of above arrangement.

The Registrar thereafter, shall register the registered user after satisfying himself of the documents and the arrangement.

The registrar shall also issue notices to the other registered users, if any informing them of the registration of the registered user.

When the registered proprietor /owner of a trademark decides to appoint a licensee, both, the licensor and the licensee shall apply in the prescribed manner, to the registrar, their intention to do so. The licensee is also called a registered user.

The registered user has no right conferred for assignment or transmission under the Act.

Under the Act, a “registered user” has been defined,

  • Subject to the provisions of section 49, a person other than the registered proprietor of a trade mark may be registered as a registered user thereof in respect of any or all of the goods or services in respect of which the trade mark is registered.
  • The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor for the purpose of section 47 or for any other purpose for which such use is material under this Act or any other law.
  • An affidavit between the proprietor and registered user has to be submitted to the Trademark office giving out the details of the partnership agreement and the degree of control of proprietorship.
  • Licensing of a trademark is basically permitting the use of a mark without transfer of ownership in return of a royalty. The ownership remains with the proprietor.
  • Registration of registered user is made in the prescribed manner under the Act along with an affidavit.