Assignment and Licensing of Trademarks in India

The Trade Marks Act 1999 was amended to suit advancing trade practices and to
abolish unfair competition among brands. The Act is enacted with an intention to
protect the rights of a proprietor who invests money, time and work into his
trademark and building its reputation in the market, and the consumer should get
equal protection from being cheated into buying a product of a sub-standard
quality, just because it was displayed with either the same mark by a person who
is not the proprietor or authorized user of the mark, or a mark that is deceptively
similar to the proprietor’s mark.

The Act allows a registered proprietor to assign or license out the use of his
trademark. The assignment and licensing can be made with or without the goodwill
of the business concerned. A trademark need not be registered to be assigned or
licensed.

Assignment of a trademark

Section 2(b) of the Trade Marks Act 1999 describes “assignment” as an

assignment in writing by an act of the parties concerned. Assignment is the transfer
of proprietary rights. Proprietary rights over a few goods or services, or over all the
goods or services registered by the proprietor may be assigned, unless it is an
associated trade mark. It can also be in favour of more than one person if they
operate in different countries.

An assignment thus should be made in writing, where rights are transferred legally,
but a trademark cannot be assigned or transmitted if such an assignment creates
multiple rights in more than one person as it could deceive or create confusion in
the general public.

The assignment of a trademark has to be registered with the Registrar of

Trademarks within a period of six (6) months from the date of assignment (or with
a permitted extension of three more months). The Registrar will then advertise the
assignment so as to inform the public of such assignment. Though the registration
of an assignment is not mandatory, it is better to get it registered since an
assignment that is not registered will not be a valid proof of the assignment.

Licensing:
Licensing occurs where the owner or authorized user of a trademark, allows a
licensee to use his trademark for a royalty paid to him for a particular term.

Licensing is done by a licensing agreement containing the terms and conditions of

use of the trademark by the licensee. The terms must include – names of the
parties, terms of sub-licensing, duration of the license, territory for usage of the
trademark, specification of the goods and services to be manufactured under the
mark, royalty to be paid and term for such payments, terms for quality control,
security terms, and termination of the license among others.

Licensing can be done through-

 Merchandising: This is a type of licensing where a simple product is

enhanced with the attachment of a famous brand name. This is also the
most popular way of advertising used by many famous trademarks. For
example, we see famous trademarks on mugs, bags, phone covers, etc.
 Franchising: Here, a licensee pays a royalty for the rights to exactly
implement the licensor’s business model and use the licensor’s trademark
on the permitted goods and services. A famous example is that of the ‘Café
Coffee Day’ outlets.
 Co-branding: Here, proprietors of two trademarks coordinate with each
other to derive mutual benefits from the goodwill enjoyed by both marks. A
very popular brand like ‘Dell’ co-brands with ‘Intel’ processors.
 Brand enhancement: Here, a licensor may team up with another to use his
brand name on a different product.
Assignment and Licensing of trademarks help the proprietor to generate more
revenue, enact broader and easier territorial expansion, enjoy protection from
illegal use of one’s marks, develop easy advertisement across different places,
increase consumer recognition and popularity among other benefits.

Assignment and Transmission of

Trademark
Assignment and transmission of trademarks involve transferring
ownership rights from one party to another. The Trademark Act
provides guidelines and conditions for such assignments and
transmissions, distinguishing between assignments with or without
the goodwill and specifying requirements for registration and
documentation.

Meaning of Assignment and Transmission of

Trademark
Assignment and transmission of a trademark refer to the legal
process by which the ownership rights of a trademark are
transferred from one person or entity to another. This process
involves the transfer of the exclusive rights associated with the
trademark, which can include the right to use, license, sell or
enforce the trademark.

The assignment of a trademark involves the complete transfer of

ownership from one party to another. In this case, the assignee (the
party receiving the trademark rights) assumes full control and
responsibility over the trademark, including the right to use it
exclusively for their own commercial purposes. The assignor (the
party transferring the trademark rights) relinquishes all rights and
interests in the trademark.

On the other hand, the transmission of a trademark typically refers

to the transfer of ownership rights in situations where the original
owner passes away or there is a change in the ownership due to
legal proceedings, inheritance or other circumstances.
Transmission may occur through the distribution of assets in a will,
the settlement of an estate or a court order.

Both registered and unregistered trademarks can be assigned or

transmitted. A registered trademark is one that has been officially
registered with the relevant trademark office, providing the owner
with statutory rights and protection. An unregistered trademark
refers to a mark that has not been formally registered but may still
possess some degree of protection based on common law or other
legal principles.
Types of Assignment and Transmission of
Trademark
Complete Assignment and Transmission

Complete Assignment refers to the transfer of all rights associated

with a trademark from one individual to another. This includes the
rights to further transfer the trademark, receive royalties and
exercise full control over its usage. For instance, if proprietor ‘X’
sells all rights of a trademark to proprietor ‘Y’, ‘Y’ becomes the
exclusive owner with the freedom to use the trademark as desired,
transfer it to others, set guidelines for its usage and receive
royalties. No approval from ‘X’ is required in this case.

Partial Assignment

Partial Assignment involves the transfer of ownership restricted to

specific services or products. For example, if proprietor ‘X’ has a
trademark (♛) related to men’s lifestyle products but only wants to
assign it to shoes, ‘X’ can transfer the trademark to ‘Z’ with the
condition that ‘Z’ can only use it for shoes. ‘X’ retains the right to
use the trademark for all other products. This type of transfer is
known as a partial assignment.

Assignment with Goodwill

Assignment with Goodwill refers to the transfer of a trademark

along with all the associated rights and values from one person to
another. For instance, if ‘X’ assigns and transfers their trademark
(♛) to ‘Z’ with all rights and values intact, ‘Z’ gains full rights to use
the trademark for men’s lifestyle products or any other future
products they manufacture.

Assignment without Goodwill

Assignment without goodwill involves the transfer of a trademark

in a way that allows its use for purposes other than the original one.
For example, if ‘X’, who deals with men’s lifestyle products, assigns
and transfers their trademark (♛) to ‘Z’ with the condition that ‘Z’
can use it for any product except men’s lifestyle products.

Conditions for assignment and transmission

as given in section 42
Section 42 of the Trademark Act outlines the conditions for the
assignment and transmission of a trademark, specifically when it is
not associated with the goodwill of a business. According to this
section, the assignment or transmission of a trademark without
goodwill will only be effective if the assignee applies to the registrar
for directions regarding the advertisement of the assignment.

The assignee must advertise the assignment within the timeframe

specified by the Registrar, which should not exceed six months
from the date of the assignment or an extended period of three
months if permitted by the Registrar.

However, if the trademark is assigned along with the goodwill of

the business for specific goods and services, it will not be
considered an assignment without goodwill. Additionally, if the
assignment includes goods for export or services used outside of
India along with the assignment of goodwill, it is permissible.

Restrictions on Assignment of Trademarks

The Trademark Act imposes certain restrictions on the assignment
and transmission of trademarks to prevent confusion among users
or the general public. These restrictions include

 Restriction on assignment or transmission that would create

multiple exclusive rights.
 Restriction on assignment or transmission that would create
exclusive rights in different parts of India.
Process of Assignment and Transmission of
Trademark (Section 45)
The process for the assignment and transmission of a trademark,
as described in Section 45 of the Trademark Act, involves the
following steps:

 Application to the Registrar of Trademarks using Form TM-

P, along with duly certified original documents.
 The Registrar will review the application and provide a
decision within three months. The decision may include
informing the applicant about the assignment or requesting
additional proof if there are doubts.
 If the assignment is approved, the Registrar will make an
entry in the Register, including details such as the name
and address of the assignee, the date of the assignment, a
description of the rights assigned (if applicable), the basis
of the assignment and the date of entry in the register.
 In case of a dispute between the parties regarding the
validity of the assignment or transmission, the registrar may
refuse to register it until the rights of the parties have been
determined.

Assignment and Transmission of Registered

Trademark (Section 38)
Section 38 of the Trademark Act states that a registered trademark
can be assigned and transmitted, with or without the goodwill of
the business associated with it. This can apply to all the goods or
services covered by the registered trademark or only to a specific
subset of goods or services.

Assignment and Transmission of

Unregistered Trademarks (Section 39)
According to Section 39 of the Trademark Act, an unregistered
trademark can also be assigned or transmitted, with or without the
goodwill of the business concerned.

Benefits of Assignment and Transmission of

Trademark
Expansion of business: By assigning and transmitting a
trademark, the owner can expand their business by using the same
trademark in multiple locations simultaneously. Additionally,
partial authority can be given to assign the trademark to more than
one person.

Leveraging an established brand: Assigning and transmitting a

trademark allows the assignee to benefit from an already
established brand in the market, saving them the effort and
resources required to create a new brand.

Legal proof: The assignment and transmission of a trademark

serve as legal proof in case of any disputes related to trademark
usage. The rights and liabilities associated with the trademark are
clearly outlined in a legal document.

Monetary benefits: The owner of the trademark can enjoy

monetary benefits through the assignment and transmission
process, including any financial gains resulting from the
assignment or transmission. Furthermore, operating with the same
trademark in multiple locations can increase the value of the brand.

Structural Waterproofing and ORS v. Amit Gupta ORS [93

(2001) DLT 496]

In this case, a dispute arose regarding the assignment and

transmission of a trademark. The court highlighted that the
registrar has the authority to refuse the registration of the
assignment and transmission until a decision is made by the
competent court. The plaintiff claimed ownership of the trademark
based on a Memorandum of Understanding (MoU) between the
parties.

However, the court rejected the plaintiff’s request for an injunction

against the defendant. The court emphasised that a change in the
name of the registered proprietor does not automatically render
the trademark unsuitable.

Cinni Foundation v. Raj Kumar Shah and Sons [2009 (41) PTC
320 (Del)]

In this case, the trademark “CINNI” was being used by the owner.
A deed of assignment had been executed and signed between the
parties. However, it was later discovered that the trademark was
not registered. The defendant attempted to claim rights over the
trademark. The court ruled that according to the law, the assignee
acquires no title to the trademark without the registration of the
assignment deed. Consequently, the defendant’s claim to the
trademark was dismissed.

These cases illustrate the importance of registration and proper

documentation in the assignment and transmission of trademarks.
Registration provides legal protection and establishes ownership
rights, while adherence to the legal requirements ensures the
validity and enforceability of the assignment or transmission of the
trademark.

Difference between the Assignment and

Transmission of the Trademark
Assignment and transmission are two terms often used
interchangeably, but they are distinct concepts according to
Section 2 of the Trademark Act. In the case of trademark
assignment, there is a transfer of ownership of the registered
trademark to another party. On the other hand, in the case of
trademark transmission, the original owner retains the rights to the
trademark but grants limited rights to a third party for its use.
For instance, let’s consider the example of X, the current owner of
the trademark “œ,” who decides to assign the trademark to Y. In
this scenario, X relinquishes ownership of the trademark and after
a proper assignment process, Y becomes the registered owner with
full rights to the trademark.

However, if X chooses to transmit the trademark instead, it means

that X remains the original owner of the trademark, but grants
limited rights and responsibilities to Y for its use.

Terms Assignment Transmission

Transfer of ownership rights Passing of rights to a third party

Defini on
from one party to another while retaining ownership

Ownership of the trademark is Ownership of the trademark

Ownership
transferred remains with the original owner

Full or par al rights depending Restricted rights granted to the

Rights
on the terms and condi ons third party

Can be with or without the Can be with or without the

Goodwill
goodwill of the business goodwill of the business

Assignment of a registered Transmission can be of a

Registra on trademark requires registered or unregistered
registra on trademark

Acts as legal proof in case of Acts as legal proof in case of

Legal Proof
disputes or challenges disputes or challenges