Trademark Assignment Agreement

Steps involved in trademark assignment agreement preparation

Trademark assignment refers to the legal transfer of the trademark right of ownership of the assignor to the assignee. Trademark assignment is a serious venture by companies with the objective of disposing of their trademarks due to mergers and acquisitions or owing to strategic business needs. Trademark Assignment Agreement legally documents the transfer and provides law-based rights of the trademark. In today’s article, we are going to guide you through the simple step-by-step procedure of how to draft a Trademark Assignment Agreement.

What is Trademark Assignment Agreement?

Trademark Assignment Agreement is a document in which definition of assignment of trademark is created between parties. The document can include the definition of the assignment of the trademark, value, assignor, assignee, and terms and conditions on which trademark rights are being transferred. Well-drafted Trademark Assignment Agreement gives legal protection to assignor and assignee and complies with all the terms according to law.

Steps of Preparation of Trademark Assignment Agreement

Assignment Agreement for Trademark is a prudent procedure that is drawn stage by stage in an easy method. The easy preparation steps are mentioned below in succession as follows:

1. Confirm Ownership of the Trademark

Before preparing the assignment agreement, the assignor (previous owner) must be free from any problems regarding the trademark title. The assignor must be listed as an owner of a trademark or must be free from any controversy regarding the trademark title.

You can do the following:

• Make the trademark become or not become in the case of the specific trademark office.
• Remove the liens and encumbrances on the trademark.
• Does broad search to determine whether trademark is not disputatious or litigious.

2. Define the Scope of the Assignment

Assignment Agreement for Trademark will specifically list what is being assigned. Trademarks are assignable in whole or part on terms agreed to. Scope of assignment may be:

• Assignment in entirety: Assignor is transferring outright right, interest, and title to the trademark.
• Partial Assignment: Assignor transfers partial rights in the trademark, i.e., product or geographical rights.

Parties of assignment and assignee must specify clearly what rights are transferred and there should be a mutual clear understanding between the parties in relation to the scope of assignment so that it can be interpreted with ease.

3. Draft the Assignment Agreement

Once the scope is established, the assignment agreement has to be drafted. The agreement should be detailed and contain the following requirements:

• Parties: Complete full legal names and addresses of assignor and assignee.
• Trademark Information: Provide the registration number of the trademark, class and category of goods/services on which the trademark is registered. The assignment should be accompanied by photocopy of the registration certificate of proof of the trademark.
• Effective Date: Provide the date when the assignment will become operative.
• Consideration: Include the consideration of money or other consideration that the assignee makes to the assignor in exchange for the right to use the trademark.
• Representations and Warranties: The assignor has to make a representation to the effect that they are the lawful owner of the trademark and despite any dispute in law still remain current with respect to the trademark. Similarly, capacity can be bestowed by the assignee to carry out the assignment of the trademark registration.
• Clause of Confidentiality: As and when required, there must be a clause of confidentiality in place to ensure protection of confidential information about the trademark or business operation.
• Governing Law: Mention the law which shall govern in case of any dispute arising under or in relation to the agreement.

4. Obtain Consent for Assignment (If Necessary)

It can be a condition based on the nature of the trademark and the conditions of the contracts under which it will be a condition for the assignor to obtain the consent of third parties like licensors or trading partners before the assignment of the trademark. For instance:

• Where the trademark is to be assigned to a third party, assignment shall be at the will of the licensee.
• The registration of the trademarks, by franchise agreement or joint venture, shall be subject to the approval of the other party.

5. Execution of the Agreement

After both have signed the agreement, then both can freely sign the agreement in such a way as will cause the agreement to be binding. Better that the agreement be signed before a notary public or, if their state law does not require otherwise, at least notarized. Both parties should then have signed copies in hand.

6. Notify the Trademark Office (If Applicable)

Notification shall be made to say trademark office in most of the jurisdictions. It notifies the assignment and affirm the right of ownership in law within the assignee.

The above is supposed to be all done:

• File the Assignment with the Trademark Office: File the necessary documents, i.e., assigned assignment agreement, with the relevant government trademark office (e.g., United States Patent and Trademark Office (USPTO), the European Union Intellectual Property Office (EUIPO), etc.).
• Necessity of Filing Fee: There is a possibility that one may need to pay a filing fee in a nation where one must file the assignment with the trademark office.
• Keep Trademark Records: Update the trademark records in the trademark office to include the transfer of ownership. This is accomplished by registering a change of record of the trademark in the register.

7. Monitor and Enforce Trademark Rights

Upon completion of the assignment, there must be continued maintenance and use of the trademark by the assignee. The rights in the trademark are lost where the trademark has not been used for an unusually extended period of time, and this would make the title of the assignee weak.

The assignee ought to:

• Be cautious against trademark use within the company.
• Ensure that trademarks are enforced in order to limit third-party infringement.

8. Finalize Tax and Accounting Considerations

Trademark assignments will also carry tax effects on assignor and assignee. It would be advisable to consult tax specialists in attempting to be able to understand resulting tax effects born out of assignment.

Assignor would have to report assignment or trademark transfer on his return and assignee can depreciate value of trademark as an asset.

Conclusion

A Trademark Assignment Agreement needs to be drawn up to legally transfer ownership of a trademark and clearly define rights and obligations of all parties involved. By following these easy steps in the procedure — from determination of ownership to notice to the trademark office and tax implications — companies can make trademark assignment an easy legal process. It is always preferable to seek the advice of a lawyer in trying to prepare a Trademark Assignment Agreement for your and time protection.

FAQ

1.) What is the difference between a trademark assignment and a trademark license?

Assignment of trademark is one way of selling the sole ownership right of the trademark and rights referred to thereto to a third party. A trademark license, however, is giving permission to use the trademark on terms but not for sale of ownership.

2.) Are two parties assignable with a trademark?

Yes, a trademark is assignable in parts to different parties, and partial rights can be given to each of them, i.e., geographic rights or product rights. But such an assignment must also be mentioned expressively in the agreement.

3.) Does the lawyer have to prepare a Trademark Assignment Agreement?

Although a Trademark Assignment Agreement can be created by you, it is highly recommended to consult an attorney so that the agreement is in conformity with all such applicable laws and protects your interests as well.

4.) How long will it take to complete the procedure of trademark assignment?

The assignment process could be completed in a few weeks or a few months depending on the jurisdiction and the workload of the trademark office. Recording and filing of the assignment with the trademark office could take a little extra time.

5.) What is the effect of failure to record the assignment with the trademark office?

As assignment is not with the trademark office, third parties have scope to disregard such assignment, and assignee cannot claim right over a trademark.