Buying and selling of a trade mark

With trade marks being such a valuable business asset, there is a big market in the buying and selling of them.

Just like any other type of property, trade marks can be sold for an amount of money. The sale of a trade mark is known as an assignment, with the buyer being the assignee and the seller referred as the assignor. An assignment works almost the same way as a normal buy/sell agreement but under section 24 of the Trade Marks Act 1994; there are a number of particulars that have to be satisfied.

Firstly the act states that a trade mark can be sold for any number of classes of goods or services it is registered for. Whether this is just one or all of them, the assignment will be legitimate. In addition, the mark can be sold to allow it to be used in a particular manner or locality.

A key provision that affects the assignment of a trade mark is that the sale price must include the purchase of the goodwill connected to it. Goodwill is any reputation or association that has become attached to a business or mark through its use. If an assignment is made that does not include the goodwill, it is known as ‘in gross assignment’ and the mark will be abandoned.

A crucial part of the Trade Marks Act 1994 in relation to assignments, is section 24(3) which states that an assignment will only be binding and enforceable if it is in writing and has been signed by both the assignor and the assignee.

If you are looking to complete an assignment of a trade mark, trademarkroom can make the process trouble free.

By Ellis Sweetenham