Trademark Assignment Agreement and Licence Agreement
Trademark assignment agreement and licence agreement are the most common types of contracts with regard to the trademarks.
In this post we talk about:
- What are the differences between a trademark assignment agreement and licence agreement?
- Am I obliged to assign or to licence all products protected by the trademark?
- Am I obliged to assign the company when I assign the trademark?
- Our assistance in the matter of trademark assignment and trademark licence
What are the differences between a trademark assignment agreement and licence agreement?
The most remarkable difference is that with the trademark assignment agreement you transfer the ownership of a trademark, while the licence agreement gives you the possibility to keep in your hands the ownership and you only transfer the possibility of using the mark.
With the trademark assignment agreement the trademark owner definitively transfer the ownership of its trademark to another person, who becomes the new trademark owner. In the assignment the price of the transfer is indicated (the price is given also by the economic value of the brand), which can be paid in a single payment or in monthly payments.
With the licence, on the contrary, the trademark owner maintains the ownership but simply gives the use of the trademark to a third party, for a given period.
The licence can be exclusive or non exclusive: in the latter case, trademark holder grants the use of its trademark to more parties, by stipulating several licence agreements.
In case of licence, the licensee (ie the one who is allowed to use the trademark) will pay a percentage of royalties calculated on the net price of each sold product or service, identified by the trademark. Usually, licence agreements provide for the licensee to pay royalties calculated for each year during the term of the contract.
Finally, in some licence agreements, the compensation is not calculated on the basis of royalties but on a flat-rate basis and in a single solution.
Am I obliged to assign or to licence all products protected by the trademark?
No, I am not.
As far as assignment is concerned, it is possible to assign all the products or services protected by the trademark or only some of them (partial assignment).
However, it should be borne in mind that the public must in no way be deceived as a result of the trademark assignment. In order to avoid that this happens, some measures can be taken: for example, the new owner undertakes to keep the same quality level of the products or the new trademark owner informs the public that a change in the quality of products occurred following the change of ownership of the trademark.
As far as the licence is concerned, it is possible to licence a trademark for all products and services distinguished by the trademark, or only some of them (partial licence). Also in the case of licence, the public must in no way be deceived, therefore it is necessary to preserve an identical quality standard, no matter if the products come from different companies.
Am I obliged to assign the company when I assign the trademark?
No, I am not.
In Italy trademark and company can separately circulate and trademark can be freely assigned.
The only link between the brand and the company is that provided for by the Italian Civil Code (Article 2573, paragraph 2), according to which when the trademark consists of a figurative sign, a fanciful word or a derivative company, it is presumed that it is transferred together with the company: it is a presumption and not an obligation.
Our assistance in the matter of trademark assignment and trademark licence
- First of all, we give our assistance in choosing the type of contract suitable to achieve your purpose. Sometimes it is believed that it is necessary to enter into a trademark assignment, while it may be more appropriate and convenient to stipulate a license or another type of contract.
- Subsequently, we evaluate with you all the elements of the contract, keeping in mind which law is applicable to the specific case and taking into consideration your specific needs and we propose a draft of contract to submit to the other contracting party’s attention.
- Then we will support you in the negotiations regarding the provisions of the contract and their possible changes until the signature of the contract and its subsequent recordal (if any) to the competent Trademark offices.
If you need more information, contact Eva Troiani law firm.