INTRODUCTION
Ever notice the symbol ™ at the end of the name of a product?
A Trade Mark is a graphically represented mark which is used by a trader to distinguish the good and/or service offered by him vis-à-vis the goods and/or services being provided by other traders. The term ‘Mark’, inter alia, includes the shape of goods, their packaging, combination of colors, et cetera. The same thus becomes an important part of establishing a “telling history” of the product under consideration. This further means that a Mark relating to goods is intended to indicate a connection between the goods and the person who has the right to use the mark or the use of the marks.
According to Section 2(1) (zb) of the Trade Marks Act 1999, “trade mark” means a mark which may represent the design and distinguish the goods and services of one person from those of another person.
When it comes to proving the validity of a Trade Mark, as per Section 31(1) of the Trade Marks Act, 1999, it is the original registration of a Trade Mark and further all subsequent assignments and transmissions of the same that have been accorded with prima facie evidence in proving said validity.
In a nutshell, a trade mark can be transferred by transmission or assignment. In this case, ownership of the trademark is transferred or assigned by one person or entity to another, with full or partial rights contingent on the owner’s terms and conditions.
ASSIGNMENT
One of the two ways through which transfer of Trade Mark takes place is Assignment. Within legal context, assignment is the transfer of property, claim or right to another and here property, among other things, includes intellectual property.
Meaning: As per Section 2(1) (b) of the Trade Marks Act, 1999, “assignment” means an assignment in writing by act of the parties concerned. A trade mark can thus be transferred or assigned from one party to another. Said is achieved by way of an instrument, i.e. through deeds, agreements, etc. Assignment must be provided in the form of writing, as stated. An assignment can be partial, complete, with or without the goodwill of the trade mark.
Suppose, ‘A’, a professional cook, creates a new type of desert and gives it a name ‘paradisus deliciarum’, further getting the name of the dish registered. ‘B’, a very close friend of ‘A’ has just opened his bakery and to support his friend, ‘A’ sells the recipe of paradisus deliciarum to ‘B’. ‘B’ then starts selling paradisus deliciarum at his bakery and said desert turns out to be a mega hit.
This very act of ‘A’ selling the recipe to ‘B’ will be termed as assignment of the trade mark. To make it official, ‘B’ will have to update said transfer at the registrar’s office and after the procedural technicalities are taken care of, paradisus deliciarum is legally ‘B’’s to sell and make profit from.
Reasons for Assignment: any transfer that is not done in order to fulfill any legal obligation or transfer to the legal heirs subsequent to the death of the owner of the trade mark classifies itself as an assignment. Following the above, the reasons thus can be diverse, such as a strategic partnership or a business expansion.
Procedural technicalities: Both the assignor and the assignee must carry out the instrument in order for an assignment to be made. The term “by act of the parties concerned” in the definition indicates that the document must be signed by both the assignor and the assignee; an act performed on its own might not be regarded as an assignment. Usually, it is a one-time payment. A trade mark can be assigned whether it is registered or not.
In any instance, the assignee must apply to the registrar within six months. An owner’s rights, title, and interest in a trademark or service mark are assigned in the form of a trade mark assignment. The transferring party (“assignor”) assigns the mark’s property rights to the receiving party (“assignee”). An assignment varies from a license, which grants authority to use a mark in some way but does not transfer ownership of the mark.
Records Needed for Trade Mark Assignment: the below mentioned are required when the assignment of a Trade Mark takes place.
- Trademark certificate
- Trademark assignment agreement
- Identification documents of the assignor and assignee
- NOC from the assignor
TRANSMISSION
Meaning: As per Section 2(1)(zc) of this Act, “Transmission” means transmission by operation of law, devolution on the personal representative of a deceased person and any other mode of transfer, not being assignment. In simple words, transmission thus is the transfer of trade mark and thus ownership and rights thereof, due to some legal obligation or due to inheritance, or due to any other reason that would not fall under the reasons for an assignment.
Suppose, in the illustration given above, ‘B’ was instead the son of ‘A’ and ‘A’, in his will, had asked that the recipe for paradisus deliciarum be passed onto ‘B’ after ‘A’’s demise. Hence, after the death of ‘A’, ‘B’ inherited said recipe and with it all the legal rights attached to the trade mark ‘paradisus deliciarum’.
The same would then be termed as transmission, and not assignment.
CHALLENGES INVOLVED IN ASSIGNMENT OR TRANSMISSION
Objections by third parties: be is assignment or transmission, any transfer of property, especially when referencing to intellectual property such as Trade Marks, ought be prone to third party interference during the carrying out of the process of said transfer. Said interference can arise due to monetary technicalities or other interested persons in said property.
Litigation: Building upon the aforesaid, said interferences can sometimes aggravate and require to judicial interference for resolution. The major drawback here comes out to be the fact that litigation is a time consuming process and can subsequently lead to monetary damages that the business would not have suffered otherwise.
BENEFITS OF ASSIGNMENT OR TRANSMISSION
Protection of rights: if the owner of a Trade Mark can no longer sustain the legal rights granted to said trade mark, for instance, in case of death of the owner; said rights are not lost and thus, the trade mark suddenly does not become open for public utilization. Instead, in case the owner wishes to not hold the rights anymore, said rights can be transferred and consequently, protected.
Benefits related to business: transfer of trade mark, done by any of the two means, only leads to continuity or expansion of business of the person to whom it is being transferred to. Hence, assignment and transmission play a monumental role when it comes to businesses and profitability.
RESTRICTION ON ASSIGNMENT OR TRANSMISSION
- Where multiple exclusive rights would be created.
i.e., Section 40(1) of The Trade Mark Act, 1999. Accordingly, a trademark is not transferable or assignable if it would grant other parties the exclusive right to use it in the same or similar ways, which would lead to misunderstanding or deception regarding;
- Same goods or services;
- The same good or service description; or
- Related goods or services or their descriptions.
When using identical or nearly identical trademarks, one should consider whether using them to assert trademark rights would be likely to confuse or deceive consumers due to the similarities between the trademarks and the goods and service.
However, the same would not be considered invalid if the exclusive rights given to each person involved have limitation.
- Instance when distinct rights are established in various regions of India.
As per Section 41 of the Act, trade mark can further not be assigned if said transfer would create an overlap with regards to the rights and the users of said rights, even if the regions are located in different parts of India.
Furthermore, the trade mark being assigned is not to even ‘nearly resemble’ any other trade mark already existing in a different region of India, as the same would give rise to the probability that the same may cause deception.
However, if the owner of the trade mark happens to transfer it, the registration of the same can be applied for. Given, that said transfer was not obtained fraudulently and that registration is applied for within 6 months of the transfer.
- Discretion provided to the registrar
In accordance with section 45 of the Act, in order to list the Assignee as the trademark’s owner on official records, an assignment deed must be filed with the Trademarks Registry in the proper form. This is how the Section operates:
Where a person becomes entitled by assignment or transmission to a registered trade mark, he shall apply in the prescribed manner to the Registrar to register his title. And the Registrar shall on receipt of the application and on proof of title to his satisfaction register him as the proprietor of the trade mark in respect of the goods or services in respect of which the assignment or transmission has effect, and shall cause particulars of the assignment or transmission to be entered on the register.
However, in cases where parties cannot agree on the legitimacy of an assignment or transmission, the Registrar may decline to register the assignment or transmission until the parties’ rights have been settled by a court of competent jurisdiction.
The discretion of the registrar was emphasised in Structural Waterproofing and Ors v. Amit Gupta Ors, wherein, the registrar had refused to register the transfer of trade mark until the same was decided by the competent court. In this case, the plaintiff had claimed ownership of the trade mark in consequence to a Memorandum of Understanding that had occurred between the parties.
TRANSFER OF REGISTERED AND UNREGISTERED TRADEMARKS
As per section 38 of The Trademarks Act, 1999 “Notwithstanding anything in any other law to the contrary, a registered trade mark shall, subject to the provisions of this Chapter, be assignable and transmissible, whether with or without the goodwill of the business concerned and in respect either of all the goods or services in respect of which the trade mark is registered or of some only of those goods or services.”
The same addresses the transferability and assignability of registered trade mark. This provision states that a registered trademark may be transferred and assigned in accordance with its terms, independent of any conflicting laws. This can be carried out with or without the involved business’s goodwill. If the aforementioned trademark is registered, the applicant must submit the trademark assignment using Form TM-23 or TM-24.
Registered Trademark
- The applicant must submit form TM-P in order to request the assignment of a registered trademark.
- The statutory cost for Trademark Assignment is 9000 rupees for online application processing.
As per the section 39 of The Trademarks Act, 1999 “An unregistered trade mark may be assigned or transmitted with or without the goodwill of the business concerned.”
The same addresses the transferability and assignability of an unregistered trade mark. If the trademark is unregistered or about to be registered, the applicant has to file the trademark assignment using Form TM-16.
Trademark not yet registered
- The applicant must submit form TM-M if he wishes to assign an unregistered or soon-to-be-registered trademark.
- The statutory cost for Trademark Assignment is 900 rupees for online application processing.
- Trademark Assignment statutory cost for offline application processing is 1000 rupees.
- The statutory trademark assignment charge for offline application processing is 10,000 rupees.
CONCLUSION
The transfer of the property under consideration, be it by way of transmission of assignment, must be intentional. Transfer of trade mark is necessary for the continuation of businesses and more often than not, forged legacies. While transmission is done following some legal obligation and/ or when there is no other path that exists for protection of the trade mark, assignment is more voluntary.
Both, however, are susceptible to litigation if not carried out properly and it is better if the trade mark under question is registered, as well as the paperwork as the negative of the same has the potential to cause unnecessary delays and interferences.
When it comes to refusal of grant of transfer of trade mark and rights thereof, the grounds are practical. The same range from multiple exclusive rights being created, to distinct rights already available in different regions of the country, and lastly including the discretion of registrar so as to deal with other discrepancies that may arise in real world situations.
In cessation thus, assignment and transmission thus, while ex facie extremely technical, are strategic tools and means of transfer that may be used by business entities and persons in order to transfer their trade mark rights for furtherance of businesses and extension of protection of said rights and this article has been an attempt at understanding what precisely does the assignment and transmission of a Trade Mark entail and further at exploring the technicalities attached with the two terms as aforementioned.
