Trademark Transfer: Everything You Need To Know
A trademark transfer occurs when the rights to a trademark are sold or licensed from one owner to another which can be done on a temporary or permanent basis.3 min read
A trademark transfer occurs when the rights to a trademark are sold or licensed from one owner to another. This can be done either on a temporary or permanent basis.
When the ownership of a mark is permanently transferred to another person or business, it is called assignment. Types of trademark assignment include:
- Complete assignment, in which all rights to the trademark are transferred to a third party. This includes the rights to collect royalties or reassign the rights to another individual or business.
- Partial assignment, in which only the trademark for a specific product or service is transferred. In this case, the owner retains the rights to the company's main intellectual property but assigns the trademark rights to one aspect of the business.
- Assignment with goodwill means that the trademark rights are transferred for the purpose of manufacturing the product in question.
- Assignment without goodwill occurs when the trademark use is restricted to a specific product or service that are not similar to those sold by the original company. Although this is allowed in certain countries, such as India, it is not considered valid in the United States.
The Process of Trademark Transfer
When a trademark is transferred, this transaction must be documented by an agreement between the parties as well as by filing the appropriate forms with the U.S. Patent and Trademark Office (USPTO). The agreement in question is called a trademark assignment agreement or trademark transfer agreement.
The agreement should completely detail the terms and conditions of the transfer, including payment, the level of assigned rights, the trademark's USPTO registration number, any current registration warranties that will be transferred to the new owners, and documentation that the assigning party fully owns the rights he or she is transferring.
Once this agreement is signed by both parties, you can record the transfer with the USPTO using a simple online form. You will also need to send in a copy of the executed transfer agreement. With online filing, the transfer is typically processed within one business day. The filing fee for this service is $40. You can also file by mail, which will take about a week to process.
If you do not register the transfer with the USPTO and the new owner of the trademark then infringes on another party's trademark, you may be implicated in the dispute since you are still federally registered as the owner of the trademark. For this reason, you may want to consult an experienced intellectual property attorney to make sure the process is completed correctly.
On the other hand, if you are the party purchasing rights to a trademark, the owner can later sue you for ownership of the mark if he or she fails to properly record the transfer. Again, it's best to consult an attorney whenever you are involved in trademark assignment.
The Role of Trademark Goodwill
Goodwill refers to the brand reputation directly associated with the trademarked goods or services. If you don't plan to use the trademark to promote those goods or services, the mark itself has no inherent value. For this reason, sales of a trademark that do not include transfer of goodwill are not considered valid. This prevents the person who is buying the trademark from being misled about what he or she is actually purchasing.
The trademark assignment agreement must indicate that the sale includes all goodwill associated with the mark. This is governed by 15 U.S. Code 1060(a)(1), which states “A registered mark or a mark for which an application to register has been filed shall be assignable with the goodwill of the business in which the mark is used, or with that part of the goodwill of the business connected with the use of and symbolized by the mark.”
Goodwill transfer does not necessarily entail transfer of any tangible assets. However, the mark must be used on similar products or services as those already associated with the mark. Otherwise, this could be legally construed as an attempt to defraud the consumer by providing different and possibly inferior products. This requirement must be explicitly stated in the trademark assignment agreement.
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