What Is a Trademark Assignment Agreement?

One of the two ways to let others use your trademark is through a trademark assignment agreement.

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TRANSCRIPT

You may have already seen the video about trademark licenses, and there I say that there's two ways to let somebody else use your trademark. One is the trademark assignment agreement, which is the topic of today's video, and the other one is trademark license agreement. The difference between the two is that a trademark assignment agreement is basically when you're selling your trademark outright to somebody else, they become the next owner, and with the trademark license agreement, the licensor remains the owner and just basically rents out the right to use the brand to somebody else.

A trademark assignment agreement is usually pretty straightforward; there's usually very little contractual language around them, because a sale is a sale. You can have some contractual language around the transfer and around payment details and stuff like that, but as soon as the trademark is sold, the old owner, the former owner can no longer control the use of that trademark. The new owner will have the right to decide how they're going to use the trademark, and they will not be asking the old owner permission to do that, because, again, assignment is assignment.

The thing to consider here is that it is a requirement that whenever you assign a trademark, when you sell a trademark to somebody else, all goodwill associated with that brand is also being sold, so you cannot split goodwill and the trademark, because in the eyes of the law, it's the same thing. It is possible to assign ... For example, if you have a trademark that's registered for five completely different products or five different services, it is possible to split that trademark into say, okay, so you’re gonna be the next owner of the product A and B, and we'll remain owners for products C, D, and E. That's something that you can do.

Another construction you should consider is an assignment with a license back. What that means is that, let's say company A sells the trademark, assigns the trademark to company B, so company B is now the owner of that same trademark. They have all the right to do with that trademark whatever they want, and as part of that, they can license the same trademark back to company A, so that company A retains the right to use that brand for whatever purposes that company B allows them to. It's one of the ways to facilitate the assignment.

For example, company B really, really wants to own the trademark, and company A is not really sure if they want to sell, so one way to deal with that would be for company B to say, "Look, we will buy the trademark from you, but we understand that you still see some value in the brand, so we will offer you a license so that you can continue selling your products under this brand that we’ll own, but we'll not go after you if you still use that brand." It's another opportunity to think about.


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Disclaimer: Please note that this post and this video are not and are not intended as legal advice. Your situation may be different from the facts assumed in this post or video. Your reading this post or watching this video does not create a lawyer-client relationship between you and Trademark Factory International Inc., and you should not rely on this post or this video as the only source of information to make important decisions about your intellectual property.

See our answers to other frequently asked questions about trademarks or leave your comments below!


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