Trademark Assignment and Licensing: How to Sell, Transfer or License Your Brand

A registered trademark is a business asset. It can be sold, transferred to a group company, contributed to a new business, or licensed to others in return for royalties. But the transfer has to be documented properly and recorded with the Trade Marks Registry, or the new owner may struggle to enforce the mark later. This guide explains how assignment and licensing work.

Assignment: Transferring Ownership

An assignment transfers ownership of the trademark from one person to another. It's common when:

• A founder registered the brand personally and now moves it into the company.
• A business is sold, and the brand goes with it.
• A group reorganises which company holds its brands.
• One brand is sold on its own.

Both registered marks and pending applications can be assigned.

With or without goodwill

An assignment can be made with the goodwill of the business, meaning the reputation built under the mark passes to the buyer, or without goodwill, meaning only the mark is transferred. For goods, an assignment without goodwill comes with an extra step: the new owner has to apply to the Registrar for directions on advertising the assignment, within six months, and advertise it as directed.

Partial assignment

A mark can be assigned for all of the goods or services it covers, or only some of them. Be careful with partial assignments, since two owners using the same mark for related goods can cause confusion and weaken both.

The Assignment Deed

The transfer should be made through a written deed of assignment, signed by both parties. It usually covers:

• The marks and registration or application numbers.
• Whether the assignment is with or without goodwill.
• The goods or services covered, and any territory.
• The price or other consideration.
• Warranties about ownership and any existing licences or disputes.

The deed has to be stamped under the stamp law of the state where it's executed, and the duty varies from state to state.

Recording the Assignment

After the assignment, the new owner applies to the Registrar, through the trademark portal, to be recorded as the registered proprietor. The application is filed with the deed and supporting documents. Until it's recorded, the Register still shows the old owner, which can cause problems when enforcing the mark, renewing it or dealing with marketplaces.

Licensing: Permission to Use

A licence lets someone else use the mark while ownership stays with you. It's common for franchises, distributors, contract manufacturers and group companies. A good licence agreement covers:

• The marks, goods or services and territory.
• Whether it's exclusive or non-exclusive.
• Quality control, so the licensee's use meets your standards.
• Royalties or other payments.
• How the mark must be shown.
• The term, termination, and what happens on termination.

Use by a licensee under your control generally counts as use of the mark by you, which helps protect it against being removed for non-use. Recording a licence with the Registry isn't always mandatory, but keeping a written agreement is essential.

Other Changes to Record

• A change of the proprietor's name or address, for example after a company changes its name, is recorded separately with the Registry.
• A change in the owner's legal form, such as a firm becoming an LLP, may need an assignment or other recordal, depending on how the change happened.

Common Mistakes

• Founders keeping the brand in their own name after forming a company.
• Transferring the mark informally, without a stamped deed.
• Not recording the assignment with the Registry.
• Licensing without quality control, which can weaken the mark.
• Forgetting tax: transfers and licence fees can have income tax and GST consequences.

Getting Help

Think Filing drafts assignment deeds and licence agreements, handles stamp duty, and records the change of ownership with the Trade Marks Registry.

Sources

• Trade Marks Act, 1999.
• Trade Marks Rules, 2017.