Sections
Fact Sheets
About INTA
Fact Sheets
Assignments, Licenses and Valuation





Trademark Assignments


Updated November 2016


1.      What is a trademark assignment?

A trademark assignment is a transfer of an owner’s rights, title, and interest in a trademark or service mark. The transferring party (“assignor”) transfers to the receiving party (“assignee”) its property rights in the mark. An assignment differs from a license, which is the grant of permission to use a mark in some manner but does not transfer any rights of ownership in the mark.


2.      When do assignments occur?

An excess of intellectual property can burden a company, directing funds toward maintaining registrations, defending against third-party claims, and creating and marketing the final product; ultimately, it can prove to be an unprofitable drain on resources. The assignment of a trademark is an essential part of its monetization. The assignment may be a relatively isolated transaction, or it may occur as part of a much larger disposal of tangible and intangible assets, such as the sale of the assets of a business.


3.      What is necessary to effect a valid assignment?

Although the specific requirements for trademark assignments vary by jurisdiction, in most jurisdictions a trademark assignment, to be valid, must, at a minimum:
  1. Be in writing;
  2. Identify the parties to the assignment, that is, the assignor and the assignee;
  3. Identify the mark(s) to be assigned and any relevant applications or registrations for the mark(s);
  4. Identify the goods and/or services to be assigned (in some jurisdictions, all the goods and/or services in an application or registration must be assigned);
  5. Be given for consideration;
  6. Identify the effective date of the assignment;
  7. Be duly executed (some jurisdictions require that it be signed by all the parties to the assignment, while in others, execution by the assignor alone is sufficient); and
  8. Include the transfer of goodwill (required in certain jurisdictions). (In India, for example, a trademark can be assigned with or without goodwill, whereas in the United States an assignment without goodwill is considered an assignment “in gross” and considered invalid under U.S. law.)


4.     
Must an assignment be notarized or legalized to be effective?

Again, this varies by jurisdiction. The laws and regulations of those jurisdictions where the mark or marks being assigned are used in commerce and/or are the subject of registrations or pending applications should be checked for specific requirements.


5.     
What is goodwill, and does it have to be assigned along with the mark?

Goodwill is an intangible asset that provides added value to a trademark’s worth. A mark is a symbol of the owner’s goodwill in the business and the goods or services associated with the mark. In some jurisdictions, an assignment of a mark without the associated goodwill (sometimes called an assignment in gross) is allowed, but in others goodwill must specifically be assigned with the mark. In the United States, for example, both under the common law and under the Lanham Act (U.S. Trademark Act), an assignment in gross is deemed invalid, and the assignee acquires no rights in the mark. By contrast, in India, the assignment of marks may be validly done with or without the accompanying transfer of goodwill. The idea of transfer of goodwill goes to a question of consumer trust: the consumer must trust that the source of the goods/services marketed under the mark is the same as he or she was given to believe.


6.     
Can a U.S. intent-to-use application be assigned?

Under the Lanham Act, an intent-to-use application can be assigned as long as proper use of the mark has been made and the applicant has either properly filed a verified Statement of Use or converted to a use-based application by filing an Amendment to Allege Use. Alternatively, if the Statement of Use has not yet been filed, the assignment must be accompanied by a transfer of the assignor’s business, or portion thereof, with which the mark is intended to be used, which must be ongoing and existing. The assignment should indicate that both the mark and the applicable portion of the business are being transferred.


7.      Can a trademark registered under a regional registration system be assigned?

Generally, trademarks registered under a regional registration system, such as the Madrid Agreement or Madrid Protocol, the European Union Trade Mark (EUTM), the African Regional Intellectual Property Organization, and other regional systems, may be assigned. A trademark professional should be consulted to make sure that nationality and residence requirements are met. In addition, the enforcement of assigned marks will be subject to the national laws of the jurisdictions involved.


8.      What issues should be considered when drafting an assignment?

The answer depends on the facts of the particular situation. Among the issues that may be considered are the following:

  1. Are there related marks (e.g., related words, slogans, designs, or other marks), protectable trade dress, corporate names, trade names, domain names, or social media pages that should also be transferred?
  2. Should the right to bring actions and recover for past infringements be specified?
  3. Have all applicable representations and warranties been included?
  4. Are indemnification provisions desired?
  5. Who is responsible for recording the assignment and paying the recordation fees?
  6. Are there any licenses or security interests previously granted by the assignor that need to be addressed or released?
  7. Are there any rights under third-party contracts (e.g., advertising contracts)?
  8. What is the territorial scope of the assignment (e.g., worldwide, or in specific jurisdictions)?
  9. Will there be future cooperation between the transferring parties (e.g., if related documents subsequently need to be executed)?
  10. Are there any coexistence agreements that are imposable on legal successors?


9.     
Must a trademark assignment be recorded to be effective, and how is recordation accomplished?

Whether an assignment must be recorded to be effective varies by jurisdiction. For instance, in China and Russia, assignments must be recorded to be effective. On the other hand, in the European Union, while an assignment of an EUTM registration does not have to be recorded to be effective, the assignee cannot invoke its rights if the assignment has not been entered in the register maintained by the European Union Intellectual Property Office. In the United States, recordation of an assignment places the public on notice as to trademark ownership (which can be relevant to certain causes of action, such as willful infringement). The consequences of failure to record an assignment likewise vary by jurisdiction; they may include making the assignment ineffective against a subsequently dated assignment that actually was recorded, or against a party that acquires a conflicting interest in the mark without knowledge of the assignment. In addition, renewal of the registration by the new owner may not be allowed until the assignment is recorded. Moreover, in some jurisdictions (e.g., in certain Middle Eastern countries), if an assignment is not recorded within a specific period of time, a late fine will be assessed and it will continue to accrue over time until payment is made.

Counsel in the relevant jurisdictions should be consulted regarding acceptable methods of recording an assignment; typically, recordation can be done electronically and/or by post. For example, in the United States, assignments of marks can be recorded either by mail or electronically via the United States Patent and Trademark Office’s Electronic Trademark Assignment System (ETAS). Assignments of marks registered under the Madrid Protocol or the Madrid Agreement are recorded with the International Bureau of the World Intellectual Property Organization.


10.  What are some examples of differences among jurisdictions regarding assignments?

The laws of individual jurisdictions governing assignments of marks can differ substantially. Therefore, it is essential to consult with counsel in the pertinent jurisdictions in order to make sure that the requirements for valid assignments are met and rights protected. Examples of such differences include:

  • Individual jurisdictions may impose their own requirements regarding the form of an assignment; the information needed regarding the assignee and the assignor; identification of the marks; fees; and whether notarization or legalization is required or desirable.

  • Some jurisdictions do not allow pending applications to be assigned, but will allow assignment of registrations.

  • Many jurisdictions (e.g., India) permit assignments without goodwill, while others (e.g., the United States) do not.

  • Some jurisdictions require that actual, rather than nominal, consideration be specified in the assignment, and taxes (e.g., stamp duties) may be charged upon the value of the assignment.

  • There may be limitations on the ability to assign marks, such as prohibitions on assigning less than all goods/services or the entire territory covered by the application or registration.

  •  In some jurisdictions, if a party owns multiple similar marks, they may be considered related, such that the assignment of one without the other(s) may be prohibited.

Additional INTA Resources
 

Country Guides: Essential Information on Trademark Protection Worldwide
Searchable database of basic information on trademark filing, prosecution, registration, maintenance and enforcement in more than 100 jurisdictions. INTA membership required.
 
Practitioner’s Guide to the Madrid Agreement and Madrid Protocol
Searchable database of practical information on the local application of one or both treaties in the countries/jurisdictions that are party to the Agreement and/or contracting parties to the Protocol. INTA membership required.


Please give us your feedback on whether this fact sheet was helpful or if you have suggestions for other fact sheet topics.