Trademark Assignment

A trademark is property — and like any other piece of property, it can be sold, transferred, mortgaged, gifted, inherited, or licensed. The instrument that effects the transfer is the trademark assignment deed, and Indian law treats it with the seriousness due to a property transaction. Sections 38 to 45 of the Trade Marks Act 1999 govern the substantive law; Rule 75 to Rule 84 of the Trade Marks Rules 2017 govern the procedure; the State Stamp Act of the relevant state governs stamp duty; and where the buyer or seller sits abroad, FEMA 1999 and Section 195 of the Income-tax Act 1961 bring exchange-control and withholding-tax overlays. Get one of these wrong and the assignment fails to record — leaving the buyer paying for an asset that on the public register still belongs to the seller.

The Act distinguishes between assignment with goodwill (the entire business associated with the mark passes to the assignee, who can use the mark for the same goods or services and benefit from accumulated reputation) and assignment without goodwill (the mark alone passes; the assignee must use it in a manner that does not deceive consumers as to the source of the goods or services, and Section 42 imposes additional advertisement and Registrar-direction requirements). It also distinguishes between assignment of a registered mark (recordal under Section 45) and assignment of an unregistered mark (only with the goodwill of the business, under Section 39). Section 40 prohibits assignment that would create exclusive rights in more than one person for the same or similar goods, where such use is likely to cause confusion. Section 41 prohibits assignment that would create exclusive rights in different persons in different parts of India for the same or similar goods. The recordal of the assignment with the Registrar is effected on Form TM-P.

We handle trademark assignments end-to-end — diligence, deed drafting, stamping, recordal under Section 45, and the cross-border tax and FEMA layer where the deal sits across borders.

What a Real Trademark Assignment Engagement Covers

• Diligence on the Mark:: Status on the IP India register, encumbrances, pending oppositions, ongoing infringement proceedings, registered-user entries under Section 49, prior assignments and chain of title; renewal status; class coverage.

• Deed Drafting:: Assignment with or without goodwill clearly demarcated; consideration; representations and warranties on title; indemnities; non-compete and non-use covenants on the assignor where commercially negotiated; choice of law and dispute resolution; closing mechanics.

• Stamp Duty Under State Stamp Act:: Stamp duty calculated under the relevant State Stamp Act (Maharashtra, Delhi, Karnataka and other states each have different rates for assignment of intellectual property); deed stamped before execution.

• Form TM-P Recordal Under Section 45:: Within 6 months of assignment (extendable on application), Form TM-P filed with the assignment deed, supporting documents, and statutory fee; recordal granted and the new proprietor reflected on the IP India record.

Section 42 Compliance for Without-Goodwill Assignments:
Where the assignment is without goodwill, advertisement of the assignment in the prescribed manner and direction from the Registrar obtained as required.

Cross-Border FEMA & Tax:
For inbound assignments (foreign assignor to Indian assignee), the consideration is remitted under the LRS / Capital Account Transactions framework with the AD bank; for outbound assignments (Indian assignor to foreign assignee), Section 195 TDS on capital gains, FEMA 1999 compliance for the receipt, and transfer-pricing documentation where related parties are involved.