Trademark Assignments

A trademark assignment is when a trademark owner transfers all their rights and interest in a trademark to a third party.

 

What is a trademark assignment?

 

Trademark owners can transfer their ownership, title and rights to a trademark to a third party by executing a trademark assignment agreement. A trademark assignment is different than a trademark license where a trademark owner grants permission to a third party to use their trademark but the trademark owner still retains their ownership and rights to the trademark.

 

Why do companies assign trademarks?

 

There are two main reasons to execute a trademark assignment which are 1) selling the trademark to a third party, and 2) transferring ownership from a previous business entity to a new one, e.g. transferring ownership from an LLC to a newly formed corporation or intellectual property holding company.

 

Companies that are struggling financially or going out of business often will assign their trademark rights to a company that is willing to pay for their trademarks. For example, in 2012 Hostess, the company that made and sold TWINKIES, went bankrupt. The TWINKIES trademark and brand, along with other Hostess trademarks, were assigned to Apollo Global Management and Metropoulos & Co who purchased the trademark rights for $410 million.

 

Another common time companies will assign their trademark rights is if there is a change in the form of the business entity. For example, when a company goes from being a sole proprietorship to a limited liability company they will need to assign all their trademarks to the new business entity. It is important to keep trademark ownership current with the active business entity.

 

What is needed in a trademark assignment document?

 

Trademark assignments must be in writing and clear. Trademark assignments should always include:

  • The parties, i.e. who is the assignor and the assignee;

  • The trademarks being assigned and trademark application or registration number (if relevant);

  • The consideration given for the assignment;

  • The date the assignment takes place (effective date);

  • The goods and services being assigned; and

  • The transfer of goodwill.

 

Assignment of “goodwill”

 

One of the most important things in any trademark assignment is to include assigning any goodwill related with the trademark. A trademark is is a symbol of the trademark owner’s goodwill in connection to their business and the goods or services associated with the trademark. Without assigning the goodwill of the trademark, the assignment is merely a naked assignment.

 

If a trademark owner does not assign the goodwill created by the trademark, then courts will deem the trademark assignment an “assignment in gross.” An assignment in gross is invalid under both common law trademark rights and under the Lanham Act and courts will determine that no trademark assignment occured. To ensure a trademark assignment is successful, it is important to specifically state that all trademark rights and goodwill associated with them are being assigned.

 

Recording Assignments with the United States Patent and Trademark Office (USPTO)

 

After an trademark assignment is executed, it is important to follow up with the USPTO and record the assignment for any affected registered trademarks. Recording an assignment with the USPTO can be done online or in paper.

 

Assignment recorded for the TWINKIES trademark as shown in the USPTO database

 

Are you looking to assign your trademark rights to a new business entity or a third party? Or do you need help assigning your trademarks at the USPTO? Contact us today for a Free Trademark Consultation and one of our attorneys will contact you within twenty four hours.

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