A trademark assignment is the transfer of ownership of a trademark from one party to another. Trademark assignments can be done voluntarily, by agreement between the parties, or by operation of law, such as a merger or acquisition of a company.
When a trademark is assigned, the new owner will be able to use the mark in connection with the goods or services for which it is registered, and the new owner will also have the right to take legal action to enforce the mark against trademark infringement.
To be valid, a federal trademark assignment must be in writing, and it must be recorded with the United States Patent & Trademark Office (USPTO). This is important because the USPTO will not recognize a transfer of ownership (or transfer of the trademark registration) unless it is recorded in their database. In addition, the trademark assignment with the USPTO must be accompanied by the fee for recordation which is currently $40 per mark per class.
It’s important to note that, before recording the federal trademark assignment, the trademark owner must ensure that the trademark is in full force and effect and not abandoned or subject to any legal proceedings that may affect its validity. It’s advisable to consult a trademark attorney to review all the requirements and help you navigate the process of trademark assignment.
In What Circumstances is a Trademark Typically Assigned?
A trademark is typically assigned in the following circumstances:
Sale of a business: When a business is sold, the trademark may be included as part of the sale. The new owner will then become the owner of the trademark.
Mergers and acquisitions: When two companies merge or one company acquires another, the trademark may be included as part of the deal. The new company will then become the owner of the trademark.
Licensing: In a trademark licensing agreement, the owner of the trademark (licensor) grants the right to use the trademark to another party (licensee) in exchange for payment. This is a contract agreement and the trademark remains the property of the owner (licensor).
Investment: Some investors or venture capitalists may invest in a business or a product specifically for the value of the trademark, in this case the trademark is assigned to the investor as part of the investment agreement.
Change of company name or rebranding: When a company changes its name or rebrands, it may choose to assign the trademark registration to a new entity or abandon it.
Common Problems Encountered With Assigning Trademarks
Lack of a written agreement: A trademark assignment must be in writing in order to be valid. Failure to have a written agreement can make it difficult to prove that the assignment was made, and can lead to disputes over the ownership of the mark.
Failure to record the assignment with the USPTO: A trademark assignment must be recorded with the USPTO in order to be recognized. Failure to record the assignment can lead to disputes over the ownership of the mark, and can also make it difficult to enforce the mark against trademark infringement.
Failure to transfer all rights: A trademark assignment may only transfer the rights that are specifically mentioned in the agreement. Failure to transfer all rights can lead to disputes over the ownership of the mark and can also make it difficult to enforce the mark against trademark infringement.
Misrepresentation: Misrepresentation of the ownership of the trademark or the status of the trademark registration can lead to disputes over the ownership of the mark and can also make it difficult to enforce the mark against infringement.
Undisclosed encumbrances: Undisclosed encumbrances like licenses, mortgages, security interests or other agreements that affect the ownership or use of the trademark can make it difficult to transfer ownership and also make it difficult to enforce the mark against infringement.
Failure to pay the fee: Failure to pay the fee for recordation of the assignment with the USPTO can lead to the assignment not being recognized.
Assignment in Gross: A trademark cannot be assigned to a third party separate from the goodwill the trademark represents. A sale of a trademark apart from its goodwill is called an “assignment in gross” and is invalid.
It’s important to note that, these are common issues that can arise when assigning a trademark, and it’s advisable to consult a trademark attorney to help you navigate the process and ensure that your trademark rights are assigned and transferred properly.