You've built a brand. Maybe it's a business name, a logo, a tagline, or something else that is distinctively yours that customers recognize and trust. But what happens to that trademark when your business changes hands? Or when you restructure your company? That's where trademark assignments come in, and it's important to get them right.
The Basics: What Is a Trademark Assignment?
A trademark assignment is the legal transfer of ownership in a trademark from one party (the Assignor) to another (the Assignee). Think of it like a deed for real estate: it's how ownership officially changes hands. Trademarks registered with the U.S. Patent and Trademark Office (USPTO), as well as unregistered ("common law") trademarks, can both be assigned.
Common situations where you'd need a trademark assignment include:
- Transferring a trademark from your personal name to your business entity
- Selling your business or brand assets to a buyer
- Purchasing a competitor's brand
- Reorganizing between related companies
- Resolving a trademark dispute as part of a settlement
The One Rule That Can Make or Break Your Assignment
Here's where many DIY assignments go wrong: under U.S. trademark law, you can't just transfer the trademark. You must also transfer the goodwill associated with it.
Goodwill is the established reputation and consumer recognition that a trademark represents. A trademark without goodwill is meaningless; it's just a name. The law reflects that. An assignment that fails to transfer goodwill is called an assignment in gross, and it is invalid.
If your assignment document doesn't include language explicitly transferring the goodwill of the business along with the trademark, the new owner may not actually own anything. They could lose the ability to rely on the original owner's priority date, which is a big deal if someone else started using a similar mark in between.
Your assignment agreement needs to state that the trademark is being transferred together with all of the goodwill of the business symbolized by that trademark. That specific language matters.
And it's not just about what the document says. If the new owner uses the trademark on completely different goods or services than the original owner did, courts may still find an assignment in gross regardless of what the paperwork says. The goodwill has to actually follow the trademark in practice, not just on paper.
Special Rules for Intent-to-Use Applications
If you filed a trademark application based on an intent to use the mark, meaning you haven't started using it yet, there's an additional hurdle. You generally cannot assign an intent-to-use application before establishing actual use, unless the assignment is to a legitimate successor of the business to which the trademark relates.
Assigning an intent-to-use application too early, to the wrong party, can void the entire application and any registration that results from it. If you're in this situation, the right move is to work with a trademark attorney before making any transfer.
Partial Assignments: Proceed with Caution
It's possible to assign only a portion of trademark ownership, for example, assigning rights to certain goods or services while keeping others, or creating co-ownership of a mark. But co-ownership of a trademark comes with real complications:
- Multiple owners can create consumer confusion about the source of goods or services
- Co-owners can't sue each other for infringement
- Disputes between co-owners can be difficult and expensive to resolve
- Future buyers or licensees may view co-ownership as a complication
Partial assignments should be approached carefully and with a clear agreement in place between the parties.
Why You Should Record Your Assignment with the USPTO
Recording a trademark assignment with the USPTO isn't legally required to make the assignment effective, but it's strongly recommended, and here's why:
- It puts the world on notice that ownership has changed
- It's considered prima facie evidence that the assignment happened
- It ensures the USPTO's records reflect the correct owner, which is critical for renewals and cancellation proceedings
- It protects you in due diligence situations, such as when someone is buying or investing in your business
The USPTO recommends recording within three months of the assignment date. You can do it electronically through the USPTO's Assignment Center, which is the fastest method.
One important note: whatever you record becomes public. Don't include confidential financial terms or sensitive deal details in the assignment document you submit to the USPTO. If the trademark is being transferred as part of a larger asset purchase agreement, it's best practice to prepare a separate, clean assignment document for recordation purposes.
Going Back in Time: Nunc Pro Tunc Assignments
Sometimes ownership of a trademark changed hands years ago, but no formal assignment was ever recorded. This creates a gap in the "chain of title," the paper trail of ownership, which can cause serious problems when it's time to renew the trademark or respond to a legal challenge.
A nunc pro tunc assignment (Latin for "now for then") is a retroactive assignment document that formalizes a transfer that previously occurred. It's dated as of the original transfer date, not the date it's being signed. This can be a lifesaver for cleaning up ownership records, but it cannot be used to create standing to sue for past infringement that occurred before the actual transfer took place.
What About International Trademarks?
If you own trademarks in other countries, assigning them involves additional complexity. Requirements vary by country. Some require both parties to sign (unlike the U.S., where only the assignor's signature is required), some require country-specific assignment forms, and some require notarization or legalization through an apostille or consulate process.
For international assignments, always engage local trademark counsel in each relevant country. What works in the U.S. often won't work in China, Japan, or Korea, and even in countries that accept U.S.-form assignments, using a locally prepared document is often more efficient and cost-effective.
If you have an International Registration under the Madrid Protocol, there's good news: you can record a change of ownership centrally through the World Intellectual Property Organization (WIPO), which then notifies each designated country, eliminating the need to record separately in each jurisdiction.
The Bottom Line
Trademark assignments are more nuanced than they appear. A poorly drafted assignment can invalidate ownership, strip away years of priority, or expose a buyer to claims from third parties. Whether you're buying, selling, or restructuring, it pays to get this right from the start.
Have a trademark that needs to be transferred? Please feel welcome to schedule a free consultation.
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