Trademark assignment: what it is and how to do it

Do you know that a trademark can be sold? Let’s see in detail what is a trademark assignment (of a trademark which has been filed or registered)

With the trademark assignment the owner transfers the ownership of its trademark to another subject, who becomes the new owner.

The agreement will indicate the price of the assignmemt (given by the economic value of the brand), which can be paid in one lump sum or in more instalments.

Trademark assignment: what the law provides for in Italy

Article 23, 1) of the Italian Industrial Property Code, relating to the trademark assignment, provides that:

“A trademark may be assigned in respect of all or part of the products or services for which it is registered”.

Contrary to the past, a trademark may be assigned without any obligation to assign the company or a branch of the company.

The trademark and the company can circulate separately and the trademark can be freely assigned.

The only link between brand and company is that provided by the Italian civil code (article 2573, paragraph 2), according to which the trademark consisting of a figurative sign, a fancy name or a derivative company is presumed transferred together with the company: it is, in fact, a presumption and not an obligation.

Total trademark assignment, partial trademark assignment, assignment of an unregistered trademark

When you assign a trademark which includes more products or services, you are not obliged to assign all of them. It is possible to assign only a part of them; in these cases it is spoken of a partial trademark assignment.

Let’s take into consideration that it is possible to assign or to licence also the unregistered trademark (trademark not registered and not filed, but only used): obviously, in the estimation of the trademark’s value, its non-registration could be make lower its price.

Difference between to assign and to licence a trademark

The difference between a trademark assignment and a trademark licence is that with the assignment you transfer the ownership, while with the licence you continue having the ownership of your trademark and you only give another subject the possibility of using it.

Trademark assignment and safeguard of consumer

It should be noted, however, the provision of Article 14, 2 a) of the Italian Industrial Property Code, according to which:

“A trademark is revoked if, due to the context within which it is used by its holder or with his consent in respect of products or services for which it is registered, it ha become such as to deceive the public, particularly as to the nature, quality or geographical origin of the products or services”

Thus, there is a limit that is the truth of the brand and the safeguarding of the public, which should not be in any way misled as a result of the assignment of trademarks’ ownership.
In practice, you can take some precautions to prevent the deception, including, for example:

• to inform the public of the change of ownership;
• to maintain the quality of the product.

The Court of Milan (judgment of September 10, 2003) has stated in favor of the argument that the change of ownership requires the assignee to maintain the same level of quality of the product that was identified by the assigned trademark.

As for the object of the assignment, while it is obvious the possibility of a partial assignment of the brand, there are some doubts about the possibility of assigning separately (namely to different owners) similar goods.

Also in this case the problem is the preservation of the public and the need to ensure that consumer, being in front of similar products, may mistakenly believe that they come from the same manufacturer.

Assignment of UE trademark

Article 1, 2) of the European Union Trademark Regulation provides that:

“A EU trademark shall have a unitary character. It shall have equal effect throughout the Union: it shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, not shall its use be prohibited, save in respect of the whole Union”.

The unitary character means that the proprietor of EU trademark may assign the same in full (namely for the entire territory of the European Union) and not only for some States.

Another important article in the field of the assignment of EU trademark is Article 20 of the European Union Trademark Regulation:

“A EU trademark may be transferred, separately from any transfer or undertaking, in respect of some or all the goods or services for which it is registered”

This means that if you use your EU trademark both for clothing and for watches but you do not want anymore about watches, you can sell you brand for watches and you can keep the property for clothing.

Also for this type of trademark, then, we recognize the legitimacy of the assignment without any obligation or transfer of a branch of company, as well as we admit the legitimacy of the partial assignment.

Article 20, 4) e 11) states that:

“On request of one of the parties a transfer shall be entered in the Register and published. As long the transfer has not been entered in the Register, the successor in title  may not invoke the rights arising from the registration of the EU trademark”.

How to do the assignment of a trademark

The assignment of a trademark must be entered in the Register of the Italian Patent and Trademark Office, if the trademark is Italian. The trademark must be entered in the Register of EUIPO, if it is an EU trademark.

We suggest you to get in touch with an IP expert (IP consultant or IP law firm) specializing in drafting of trademark assignment agreements which:

• will assist you in drafting the right contract
• will help you in evaluating each item of the contract
• will assist you in negotiating with the other party
• will assist you in fulfilling all the obligations concerning the assignment of the trademark
• will take care to enter the contract in the Register