The Difference between a Trade Mark Assignment and a Trade Mark Licence
As the owner of a trade mark, you have exclusive privileges in relation to your trade mark and the right to prevent other people from using your mark. However, there are instances when you can “exploit” your trade mark and allow others to use it either through a trade mark assignment or a trade mark licence.
What are the differences?
If you are not familiar with these terms, you can easily mistake one for the other. Good news is, there are distinct characteristics that can differentiate a trade mark assignment from a trade mark licence.
Before we get into the differences, you should note the terminology for the parties involved in these types of transactions. For an assignment, you refer to the “assignor” (or owner of the trade mark) and the “assignee”. For a trade mark licence, you refer to the “licensor”, the person who grants the licence, and the licensee, the recipient of the grant or the one who receives permission to use the trade mark.
The right to use a trade mark under a licence
The licensor grants to the licensee a temporary right to use the trade mark for some specific purpose in exchange for a certain amount of money or royalties. The licensor retains ownership of the trade mark and the licence agreement can contain specific restrictions such as the length of time of the licence, the territory where the licence may apply, or whether the licence will be exclusive or non-exclusive, etc. It is important to remember that a licence is also an agreement and establishes the expectations of the parties concerning the use of the trade mark. Because a license is fundamentally a contract, it is important to define the scope of the boundaries of the use of the mark, covering important parameters, for example, as to the term of use, payment, exclusivity, revocability, field of use, territory and revocability.
Assignment of a trade mark
An assignment deals with the sale of the trade mark. The assignor or owner of the trade mark permanently transfers the ownership of the trade mark to the assignee in the same way as you might buy or sell any asset. The assignee becomes the new owner of the trade mark and acquires full ownership – the rights, the title, and interest of the trade mark.
Agreement in writing
A trade mark licence or assignment does not need to be in writing although it is good practice to do so because the parties want to clearly document their intentions.
A trade mark licence does not require filing of a notification with IP Australia because it is a private agreement between the licensor and the licensee.
An application for transfer of trade mark ownership must be filed with IP Australia. Once the form with the records of assignment are received by the Registrar at IP Australia, the assignee’s ownership becomes official on the Trade Marks Register. IP Australia, in turn, will publish the assignment and all its details in the Official Journal of Trademarks and the new owner of the trade mark will appear on the register at IP Australia.
Take away points:
- The licence of a trade mark trade mark authorizes the licensee with a temporary right to use the trade mark whereas, an assignment of trade mark permanently transfers ownership from the assignor to the assignee.
- It is good practice to record both a license of and an assignment of a trade mark in writing.
- An application for transfer of ownership of a trade mark must be filed at IP Australia in order to update the ownership of the trade mark with the trade marks office and make it official.
Jaclyn-Mae Floro, BCompSc
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Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.