Trademark Assignment Process and Recordation Explained

Key Takeaways

• A trademark assignment transfers ownership rights from one party to another and must be documented in writing.
• Assignments may involve registered or unregistered marks, and in some cases, include trademark applications.
• It’s crucial to also transfer the goodwill associated with the trademark for it to remain valid.
• Recordation with the USPTO is not legally required but provides legal benefits like public notice and priority in disputes.
• Mistakes in assignment documentation can invalidate the transfer, making legal counsel highly recommended.

What Is a Trademark Assignment Agreement?

A trademark assignment agreement is a legal document that transfers a design, symbol, phrase, and/or word from the assignor (current owner) to the assignee (future owner). On the other hand, a license grants permission to use a mark without transferring the mark's ownership rights. A trademark is a valuable, intangible asset that customers use to associate quality with a brand. A trademark assignment agreement allows a business owner to transfer the goodwill of the business to another party.

What Is the Difference Between Trademark and Service Marks?

The term "trademark" is also used to refer to service marks. Service marks will identify services provided, while trademarks identify goods or products. For example, McDonald's is a service mark, while Big Mac is a trademark because it's referring to a tangible product.

What Is a Trademark Assignment Agreement?

A trademark assignment agreement may also be referred to as:

• Transfer of trademark rights
• Intellectual property assignment
• Assignment and transfer agreement

Too much intellectual property can become a burden on a business. For example, the costs associated with administering the following operations may put a financial strain on the resources of the company:

• Creating and marketing the final product
• Defending against third-party claims
• Directing capital towards maintaining registrations

When Is a Trademark Assignment Necessary?

A trademark assignment is typically required when ownership of a trademark must transfer due to:

• A merger or acquisition
• A sale of a business or brand assets
• Restructuring of a company or corporate reorganization
• Assignment from an individual to a business entity
• Resolution of a legal dispute (e.g., court-ordered assignment)

Any time the original owner will no longer control the trademark, a written trademark assignment should be executed and, ideally, recorded with the USPTO.

Basic Elements of a Trademark Assignment Agreement

There are 10 basic elements that every trademark assignment agreement should include:

1. A formal written document (not oral)
2. An effective date that specifies when the transfer occurs
3. A description of the trademark, including the trademark number if it's been registered with the U.S. Patent and Trademark Office (USPTO)
4. Identification of the assignor
5. Identification of the assignee
6. How much consideration is being transferred to the assignor for the trademark
7. Guarantee from the assignor that they are the owner and have the right and authority to transfer the mark
8. Signatures from both the assignor and assignee
9. Notarization of the agreement if you're expecting to register the mark in a foreign country
10. Identification of the amount of goodwill included in the transfer

Other topics that should be considered when creating an assignment agreement include:

• Are there any coexisting agreements that are imposable on legal successors?
• What is the geographic scope of the assignment?
• Are there any rights under third-party contracts?
• Are there any security interests or licenses previously granted by the assignor that should be released or addressed?
• Who is responsible for paying the recordation fee and recording the assignment?
• Are indemnification provisions desired?

What Can Be Assigned in a Trademark Assignment?

A trademark assignment can include:

• Registered trademarks: Marks officially registered with the USPTO.
• Pending applications: Federal applications can be assigned, although special rules apply to intent-to-use applications (see below).
• Common law trademarks: Unregistered marks used in commerce may also be assigned.
• Associated goodwill: The assignment must include the goodwill of the business related to the mark. Without this, the assignment may be deemed invalid.

Assignments may also include design elements, logos, or stylizations if they are part of the original trademark registration or application.

Special Considerations for Intent-to-Use Applications

Intent-to-use (ITU) trademark applications are governed by stricter assignment rules under §10 of the Trademark Act. An ITU application can only be assigned:

• After a verified statement of use is filed with the USPTO, or
• Before the statement of use is filed if the assignment includes the transfer of the business associated with the mark.

Failing to meet these conditions could result in the application's invalidation. Always ensure compliance with §10 rules when assigning ITU applications.

How Are the Trademark Assignments Recorded?

The USPTO is responsible for recording all trademark assignments. A request to record a trademark assignment may be filed online using the Electronic Trademark Assignment System (ETAS). Trademark applicants may create and submit a cover sheet for the recording of a trademark assignment. Any legal documentation supporting the assignment should also be submitted.

There is a $40 filing fee for recording the first trademark registration or assignment. All subsequent filings for the same trademark owner cost $25. Contact the assignment division of the USPTO with a written request to stop the recording of a trademark assignment. If the assignment division is able to cancel the recording, they will refund the filing fee.

If the assignment has already been recorded, it will not be possible to have it canceled. In cases where the error is due to the USPTO, the assignment division will correct it without charging an additional fee. §503.06- §503.06(d) in the trademark manual will guide trademark owners through the necessary steps to correct the assignment records. Remember, an update that's been completed with the assignment division doesn't necessarily update or change the ownership of record within the USPTO database.

Under normal circumstances, there's no need for a trademark owner to contact the USPTO regarding a request for a new certificate of registration or a change of ownership. In all other circumstances, the owner should contact the USPTO in writing about any changes in ownership so that the database may be updated. The USPTO database displays the most up-to-date ownership information. All other inquiries regarding the chain of title may be viewed in the assignment branch database.

Why Record a Trademark Assignment with the USPTO?

While recording a trademark assignment with the USPTO is not legally required, it offers several practical benefits:

• Public notice: It provides evidence of ownership to the public and future potential buyers or challengers.
• Priority: Recordation establishes legal priority, helping prevent fraud or disputes over ownership.
• Chain of title: It ensures that the ownership trail remains clear and consistent in the USPTO database.
• Enforcement: Helps establish standing in trademark infringement litigation or opposition proceedings.

Failing to record an assignment can delay or complicate enforcement and licensing efforts, particularly if multiple assignments exist or the chain of title is unclear.

Common Mistakes in Trademark Assignments

Trademark assignments can be rendered ineffective due to common mistakes such as:

• Omitting the goodwill: An assignment that excludes goodwill may be considered invalid under U.S. trademark law.
• Failing to record timely: Delays in recordation can affect enforceability and lead to confusion over ownership.
• Assigning an ITU mark incorrectly: As noted earlier, premature assignment of an ITU application can void the application.
• Incomplete or ambiguous descriptions: Failing to properly identify the mark, application number, or associated goods/services can make the assignment unclear.

Careful drafting and prompt filing are essential to avoid these pitfalls. An experienced trademark attorney can help prevent such errors.

Trademark Assignment vs. Trademark License

It’s important not to confuse a trademark assignment with a trademark license. Key differences include:

Assignments represent a permanent transfer, while licenses allow the owner to retain legal rights while permitting others to use the mark under specific conditions.

Frequently Asked Questions

1. Can a trademark assignment be oral or does it need to be in writing?
   No, it must be in writing. Oral assignments are not recognized by the USPTO.
2. What happens if I don’t record a trademark assignment?
   Your ownership may not be reflected in the USPTO records, which can hinder enforcement or licensing and create chain-of-title issues.
3. Can I assign a trademark that’s still in the application stage?
   Yes, but special rules apply—especially for intent-to-use applications. In many cases, assignment before use in commerce is restricted.
4. Do I need a lawyer to complete a trademark assignment?
   While not required, hiring a trademark attorney is strongly recommended to avoid legal errors that could invalidate the transfer.
5. Is there a deadline to record a trademark assignment with the USPTO?
   There is no official deadline, but prompt recordation is advised to ensure public notice and maintain an unbroken chain of title.

If you need help with trademark assignment, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.