Assignment/licensing of Trademark allows third parties to use the registered trademark and the rights associated with it. In exchange for “Royalty” Third party is authorized by the owner of registered Trademark to use that Trademark for a specific period of time.
In other words Trademark licensing refers to the moe of transfer of rights wherein the actual operator rights in the Trademark vests with the Trademark owner and only few stipulated rights associated with it i.e. right to use use the trademark only is given to the third party for a mutually agreed period of time.
Transfer/ Sale/ License/ Assignment of Trademark in India
Rights of a Trademark can be transferred to a third party by way of Trademark assignment and license.
Types of Trademark Assignment in India
Broadly there are two types of Trademark assignment in India-
- Exclusive Right- Trademark assignment gives exclusive right to one person to use the goods and services of the registered Trademark. It cannot be used by more than one individual as it would decisive or cause confusion.
- Non-exclusive License- It allows more latitude in the number of licenses granted while allowing the licensor to retain the rights to further develop and exploit its own intellectual Property.
How to license a Trademark in India
Trademark licensing in India is governed by the Trademarks Act, 1999. However, Trademark licensing is nowhere defined under the Act, the statutory provisions in the Act governing trademark licensing in India refers to the provision relating to “Registered Users”.
For Trademark assignment it is mandatory to have assignment deed or agreement between the parties to have executed the Trademark assignment in India, however it is advisable that the registered user agreement/ license agreement be registered with the registrar of Trademarks. The application for its recordal should be made within six months from the date of such agreement.
Procedure for Trademark licensing as per section 49 of the Trademarks Act, 1999.
Though recordal of the permitted license is voluntary, it is always advisable to get registered your assignment or incense agreement with the registrar of Trademarks to avoid any dispute in future arising out of it. An application for recordal of license agreement/ registered user agreement with the Trademarks registry can only be made with respect of registered Trademark and the application for recordal of the said license agreement should be made within six months from the date of such agreement.
For registering a person as a registered user/ license of a trademark, the registered proprietor/ licensor and the registered user/ licensee shall jointly apply in writing to the Registrar on form TM-U , along with-
- The agreement in writing or a duly authenticated copy of it, entered into between the registered proprietor/licensor and the proposed registered user/ licensee with respect to the permitted use of the said trademark.
- An affidavit needs to be submitted living the particulars of the relationship between the licensor and licensee, control by the licensor over the permitted use, conditions and restrictions imposed and the mode and place of the permitted use and the should specify the in period for the permitted use.
- A Power of Attorney signed in favour of agents.
- Such further documents and evidence as required by the registrar or as may be prescribed.
Once the Registrar is satisfied with the application and the details he will register the proposed license in respect of the goods or services as to which he is satisfied. The entry in respect of the license shall be made in the register. Then the recordal will be published in the Trademark journal within two months from the date of registration. The registrar is obliged to issue a notice in prescribed manner of the registration of such licensee to other use or licensee.
Variation or Cancellation of Registration as a Registered user
Trademarks may be licensed for a sefi or for all goods and services covered. Section 50 of the Trademarks Act provides for variation or cancellation of registration as a registered user. That if the licensee has not used the mark as per the terms and conditions of the agreement, or proprietor has failed to disclose any material fact for such registration, or that the stipulation in the agreement regarding the quality of products is not enforced, or that the cricumsatbces have changed from the date of registration etc, under the said condition a notice and opportunity of hearing is provided before cancellation of registration.
Rights of he Registered user/ Licensee
Following are the rights of the registered user/licensee-
- To initiate an infringement suit against the unauthorized person, registered user/ licensee can initiate it under his own name after taking permission or giving a one month of ror notice to the original registered proprietor of the Trademark.
- A registered user/ licensee does not have a right of further assignment with respect to the trademark.
An unregistered user of Trademark however has no right to initiate an infringement suit under his name. It is advisable for licensee to cite the proprietor of the trademark as co defendant in such proceedings. If the proprietor is added as a co-defendant by the registered user, he shall not be entitled for any costs, unless he appears and takes part in the proceedings.
For Trademark assignment or license of Trademark Contact BIAT Legal LLP for best legal assistance.