NATIONAL LAW SCHOOL OF INDIA UNIVERSITY, BANGALORE

Project Assignment on:

ASSIGNMENT AND LICENSING UNDER TRADEMARK LAW : AN ANALYSIS

Submitted as per course requirement of International and Comparative Law of Intellectual

Property Rights

Submitted to:
Prof. Dr. T Ramakrishna
Course Teacher

Submitted by:
RAJAN RATHEE
ID No. 804
LLM (Business Law)
 ACKNOWLEDGEMENT

I would like to express my humble gratitude to Prof. Dr. T. Ramakrishna and heartfully
acknowledge his assistance in guiding me through the topic and entrusting me with the
responsibility to carry out this research project under his supervision. I also express my heartfelt
gratitude to his Teaching Assistant Mr. Divyesh Pratap for guiding me throughout the project.
This work would not have been possible without her invaluable support and thought provoking
comments.

I am very glad to present my project assignment titled analysis of assignment and licensing under
trademark law. I am also grateful to the library staff who assisted and permitted me to access the
requisite material within time. I am further indebted to my friend Kartikeya Joshi for his valuable
suggestions and views.

With profound gratitude,

Rajan Rathee

INTRODUCTION

The property generated with the help of human intellect is called ''Intellectual Property''.
Intellectual Property boosts nations economy and help in sustainable development. In this era,
Intellectual Property plays most important role in any nation development. IPRs are a necessity
to protect rights of promoters and inventors who develop new things which ultimately help in
economic growth of a nation. There is a great economic value attached to these rights and
Intellectual Property system protects such rights or provides protection. Only because of
protection provided under laws, investors and inventors are showing keen interest in developing
new technology, new product, processes.

IPRs are crucial to the business organisation. Trade mark

is one of the kinds of Intellectual Property. Under Trademark, a person develops some mark
which will represent his business or reputation. Through that mark ones business can be
summed. Trademark is also important with respect to transfer of goodwill or promoting it among
clients. Further, assignment is another concept in trademark in which owner of a mark transfers
ownership either without or with goodwill of the business. Assignment can be made in two ways
either partial or complete. Complete means owner transfers all his rights to another person for
royalty and partial means transfer is restricted to specific product or services only.

Another thing which comes under purview of this project is licensing of trademark. Trademark
licensing means when owner of a mark gives permission to use his mark for his business
promotion in change of royalty over that product or service which was provided by owner. In
licensing, quality control is the most important thing. The basic purpose of quality control is that
the person to whom that mark has been licensed or granted for particular time period should
match quality of products to the previous owner i.e. from whom he took that mark.

This paper is an endeavor to analyze the

relevant provisions of the trademark law and scrutinize its provisions with respect to the laws in
other jurisdictions and other nations. The paper further seeks to analyze issues pertaining to
protect the public interest in case of deceptive use of mark and to enhance property value of
licensor's trademark.

RESEARCH METHODOLOGY

The research methodology used for this research is a doctrinal. This type of research involves
the analysis of the statues, case laws, existing secondary information accessed from various
sources, e.g. books, articles, journals, websites etc. and a comparative study with the various
legislations and judicial pronouncements from various countries.

Scope
This paper seeks to analyze assignment and licensing concept under trademark law of India and
various other countries and further analyze the aspect of quality control under licensing system
and which key clauses must be there in licensing agreement. This paper further analyzes concept
of naked license and what are the dimensions of trademark licensing. This paper also analyzes
concept of assignment and license back in detail.

Hypothesis
Quality control must be used to protect public against deception rather than mere enhancement of
business or that mark.

Research Questions
This paper will look into the following research question:
Whether the Trade Mark laws provide adequate protection to public against
deceptive use of mark?
Whether quality control is ultimately intended to protect public against deception
or to enhance property value of licensor's trademark?

Sources of Data
The researcher has studied from primary sources such as statutes and secondary sources
including text books, articles, reports research articles from various law journals and web
resources.

Mode of Citation
A uniform mode of citation is followed in the present paper.

Limitations
The paper is limited to assignment and concept of licensing under trademark law.

ASSIGNMENT OF TRADEMARK
Trademark means a mark capable of being represented graphically and which is capable of
distinguishing the goods or services of one person from others and it may include shape of
goods, color combination as well as packaging of goods. This definition of Trademark is given in
Section 2 (1) (2b) of the Trade Mark Act 1999 which came into force with effect from 15 Sept
2003. A trade mark is that mark or symbol which shows some kind of relation between goods or
services which he is providing and him. Section 2 (b) of Trade Marks Act, 1999 defines
assignment as assignment in writing by act of concerned parties.

An assignment means transferring ones own right or

interest to some other person but if that assignment is made in contrary to public policy then that
will be invalid. If one person obtains assignment through false means even then it will be void
ab-initio. Assignment is further divided into two type i.e. complete assignment and partial
assignment. Complete assignment means one person transfers his full right in that thing available
to other person. After transferring, the transferor will not have any right regarding that interest
whereas in partial assignment transfer is restricted to specific service only. Owner or assignor
can retain some of rights with regarding to that with him. In latter, assignee cant use those rights
which assignor has kept with him.

Assignment can be made with goodwill or without

goodwill. In former, assignor transfers rights regarding the business which he was doing before
assignment being made. Whereas in latter, assignor transfers rights regarding all things except
some in which he himself is engaged. While making assignment, deed must be made with extra
caution so that any kind of future suffering can be safeguarded. Many things should be taken care
of like it must be in writing with clearly mentioning names on it. Territorial extent should also be
decided in advance and consideration should also be clearly mentioned. Another most important
thing need to be mentioned is whether assignment is made with goodwill or without goodwill.
Chapter 5 of the Trade Marks Act, 1999 deals with assignment and transmission. Section 37 to
45 deals with various situations regarding assignment. Trade Marks Rules, 2002 governs the
procedure for registration of a trademark assignment.

TRADEMARK LICENSING

Trademark licensing is an authorization by proprietor of a trademark to other person granting

some rights or interest regarding use of that mark but with some terms and conditions. Licensing
can be said to be the easiest way to expand ones business domestically as well as internationally.
Because by using ones reputation which he earned using that mark one can easily get fame and
sell his product and moreover expand that mark as a symbol of quality product abroad. A well
maintained trade mark venture can generate enormous revenue and pay dividend to the owner.

The primary purpose of trademark law is to protect public from confusion and
deception while other branches of Intellectual Property dont deal with same purposes because
they prefer encouraging creativity and art. A trademark indicates the source or origin of a product
or service and hence it helps consumers in making general perception regarding quality of that
product. In this whole process, trade mark becomes a valuable property of the owner. With the
advent of technology and development, now consumers are more interested in checking whether
a particular trade mark could be relied upon as an indicator of a certain quality or not. This lead
to a development in the trade mark law as such where a trademark began to be seen as satisfying
and guaranteeing uniform quality standards in all goods sold under a particular mark in addition
to symbolizing the physical source of goods. This created an expectation of a certain quality with
which consumer associated. This means equal quality whatever the standard of that quality might
be.

QUALITY CONTROL

Quality control by the owner of mark over the use of licensed mark is an independent
requirement under both common law as well as statutory law. The trade mark created generally
created an expectation regarding quality, and allowed the purchaser to safely rely on the
expectation. However, quality is neither warranty nor luxury product. The level of quality may
be altered by the proprietor from time to time. However, there is no set rule for that instead it all
depends upon business requirement of parties and commercial value of trade marks. In
Barcamerica International USA Trust v. Tyfield Importers, Inc. et. Al, court held that quality
control doesnt mean high quality but merely equal quality. Proprietor has been given full
freedom to alter quality as per his sweet will.