Assigning, transferring and licensing trademarks

Law

Sections 37 to 45, Trade Marks Act 1999

Recording form

TM-P

Deed

Written, stamped as per state law

Licensing

Written licence; registered user optional

When an assignment is needed

• Moving the brand into a company: a founder who filed the mark in a personal or proprietorship name and later forms a private limited company.
• Sale of a business or brand: the buyer will insist on a clean assignment and a recorded title.
• Funding and due diligence: investors check that the company, not a founder or relative, owns the key marks.
• Family and partnership changes: retirement of a partner, dissolution of a firm, or succession after death.
• Group restructuring: moving marks into a holding or IP company.

Assignment with goodwill and without goodwill

Section 38 allows a registered mark to be assigned with or without the goodwill of the business, and for all or only some of the goods or services. Section 39 extends this to unregistered marks.

Some restrictions apply. Section 40 prevents an assignment that would leave two people with exclusive rights to similar marks for similar goods where confusion is likely. Section 41 limits splitting a mark by territory within India. Section 44 requires associated marks to be assigned together.

A partial assignment, for some goods only, should be thought through carefully. If the assignor keeps the mark for related goods, buyers may be confused, and the Registrar can refuse to record an assignment that creates that risk. In most sales of a business, assigning the whole mark with goodwill is the cleaner course.

The assignment deed

The deed should identify the parties, the marks (by application or registration number, class and goods), whether goodwill passes, the consideration, the effective date and any warranties. Good drafting also deals with pending applications, oppositions and suits, transfer of copyright in the logo artwork, domain names and social media handles, and the assignor's obligation to sign further papers.

Copyright in a logo is separate from the trademark. If the logo was designed by an agency or freelancer, the company should hold a written assignment of that copyright too, as discussed on our copyright registration page.

Stamp duty

An assignment deed is an instrument chargeable to stamp duty under the Indian Stamp Act as adopted, or the separate stamp law of the state where it is executed. The rate and basis differ between states: some charge a percentage of the consideration, others a fixed amount for this kind of conveyance of movable property. Duty should be paid before or at execution, through e-stamping where available. An unstamped or under-stamped deed cannot be relied on as evidence until duty and penalty are paid, which becomes a problem precisely when the assignment is challenged.

Recording the new owner with the Registry

Under Section 45, a person who becomes entitled to a registered mark by assignment or transmission must apply to the Registrar to register their title. The request is filed in Form TM-P with the deed, an affidavit where required and the official fee per mark. The Registrar may ask for further proof before entering the assignee as proprietor.

Until the change is recorded, the Registry treats the old proprietor as owner. Notices, renewal reminders and hearing dates go to the old address, and an unrecorded assignee may face difficulty in proving title in an infringement suit. The same form is used to record transmission on death, merger or a change of name of the proprietor. For marks still at the application stage, the change of ownership is recorded on the application so that the registration issues in the assignee's name.

Licensing instead of selling

If you want to keep ownership but allow a franchisee, manufacturer or distributor to use the brand, a licence is the right tool. The 1999 Act recognises "permitted use" by a licensee under a written agreement, without compulsory registration. Registration of the licensee as a registered user under Section 49 remains available but is optional, and many businesses rely on a well-drafted licence agreement alone.

The licence should fix the goods, territory, duration, quality standards, inspection rights, royalty, and what happens on termination, including stopping use and returning stock. Quality control is essential: if licensees use the mark without control, the mark may stop indicating a single source. If a licensee or former partner keeps using the mark after the arrangement ends, the remedy is an infringement notice and suit.

Due diligence and tax points

A buyer of a brand, or an investor, should check before signing:

• The register shows the seller as proprietor, the registration is renewed, and the goods covered match the business being bought.
• There are no pending oppositions, rectifications or suits, and no licences or coexistence agreements that limit the mark.
• The mark is in use, so that it is not open to removal for five years of non-use.
• Copyright in the logo, domain names and social media accounts are held by the seller and are transferred with the mark.

On tax, the sale of a trademark is a transfer of a capital asset for the seller, and GST may apply to the transfer where the assignor is registered. The treatment depends on the parties and the structure of the deal, so we coordinate with your chartered accountant before the deed is finalised.

Transmission, as distinct from assignment, happens by operation of law: on death, merger, demerger, or conversion of a firm into a company or LLP. It is recorded in the same way, with the document that proves the transmission, such as a court-approved scheme, a succession certificate or the certificate of conversion. Where a proprietorship is converted, the brand does not move automatically, so a deed should be signed at the time of conversion.

Documents you need

To draft and record an assignment we need:

• Trademark application or registration numbers and classes
• KYC and authority documents of assignor and assignee (board resolution for companies)
• Agreed consideration and whether goodwill passes
• Details of pending objections, oppositions or court cases on the marks
• Proof of copyright ownership in the logo artwork
• Stamp paper or e-stamp as per the state of execution
• Signed Form TM-48 from the assignee

How we handle it for you

1. Title check

   We verify the current proprietor and status of each mark on the register.

2. Structure

   We advise whether to assign with or without goodwill, or to license instead.

3. Deed drafting

   Assignment or licence deed drafted, with stamp duty computed for your state.

4. Recording

   Form TM-P filed with the deed so the Registry shows the new owner.

5. Clean-up

   Related copyright, domains and pending matters transferred and diarised.

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