Change Ownership

During the examination of a pending trademark application as well as after a trademark has registered, the owner of a trademark may change for various reasons. Some trademark owners transfer their ownership of a mark to another entity, which is called an assignment.

Why is it important to properly transfer ownership of your trademarks?

If you fail to properly assign your marks and the successor party infringes the rights of another trademark, then you would receive the cease and desist letter. This is because, according to the Trademark Office records, you still technically own the trademark. You would likely be able to get out of the dispute by proving you are no longer involved, but it would be an additional complication and unnecessary headache you should avoid.

Trademark assignments are important not only when you sell your intellectual property to a third party, but also when your business undergoes a re-organization. Assigning the rights to your company gives the company a legitimate right to make, use, sell, and advertise the goods or services covered by the mark. If you don’t assign the rights, then you would need to license the rights, which would create a substantial amount of work compared to a simple assignment of rights. Further, by assigning your trademark rights to your company, you build asset valuation in the company, making it more attractive to both investors and lenders.

A trademark can also be assigned or licensed to third parties. In the first case, it is something analogous to a sale, by which the trademark changes “owner”; in the second case, it is a sort of “rent” with which the use to third parties is granted.
The trademark assignment contracts are very delicate. It is necessary in fact to have a wide knowledge of the trademark that is being sold, but above all purchasing, therefore a technical analysis is appropriate for checking that the trademark is alive, that there are no potential or real conflicts, that there are no co-existence agreements. All that is obtained by making the trademark undergo an accurate analysis (the so-called due diligence) to avoid the risk of purchasing an “empty box”.

The assignment, or license, of a trademark has to be recorded with the trademark office with a specific petition for recordal. The recordal is necessary for the effectiveness in front of third parties and above all to safeguard the assignee or licensee party.

If you have any questions about the trademark transfer process, contact us to get started today!