Trademark registration can take a long time, and if you have gone through the process before, this won’t be new to you. That means that one has to be patient to be able to see through the registration process. Waiting can be a severe challenge for business people. If you are a seller on Amazon, your trademark is significant to your sales.
A question that is often asked is, is there no shorter and less tedious procedure to getting one’s trademark registered, instead of just going through the very tedious process of filing for a trademark, spending money on legal fees and other government charges, and even waiting and responding to rejections?
Isn’t it possible to purchase someone else’s trademark just like any other property?
The term trademark assignment is what is used when you purchase someone else’s trademark. While it is not mandatory to record assignments in the US and Canada, it is highly recommended. Due diligence must be exercised when purchasing an already existing trademark because while buy a trademark is a relatively straightforward process, the procedures that accompany this assignment are not always easy.
One must also understand that trademark license and trademark assignment are not the same things. Licensing your trademark permits the other party to use your trademark for a stated time frame in exchange for loyalty. Assigning a trademark however gives the total right to the other party, leaving you with no rights to the trademark.
Buying a trademark means a lot of things to the buyer, and this does not exclude what is being obtained. To purchase an existing trademark in the US and Canada, for example, one will have to buy the product line, all assets of the company, and everything associated to the trademark, the goodwill included.
Goodwill is a common word, but it is not usually understood. To explain, goodwill is the competitive advantage or reputation that a business venture has earned over time. The goodwill of a business is often established the older the business. A trademark of the company is worthless without its goodwill because no one would want to buy an obscure and unused trademark.
That is not to say that it is not possible to buy a trademark without its associated goodwill. It is possible. The term “naked” assignment is what it is called in the US because it is recorded without the transfer of its related goodwill. So, in the US, an assignment is not valid if the transfer of the mark doesn’t include its goodwill. That implies that a “naked” assignment is not a valid one.
That is why a trademark application based on “intent to use” cannot be assigned to another entity before use in the US. In Canada, a proposed use trademark application can transferred.
In the light of this, in the US, it is always best to file the intent to use application under the name of the company that intends to use to sell the products and services.
It is also pertinent to note that a pending application or even a registered trademark can be transferred in conjunction or independently from the goodwill of the business with which it is associated. A good instance of this is when a division of a large company is sold.
As a buyer, in this situation, you have to make sure that the partial assignment will not affect the validity of the trademark. What this means is that it will not decrease its uniqueness as a trademark. Also, in the case where the said trademark is associated with other trademarks of its parent company, all these trademarks must be assigned together.
You must also understand that if the trademark you have purchased is for a specific product, you must continue using the trademark for the same products that have been listed in its trademark registration certificate.
If a particular trademark has been listed for face cream, for example, and the buyer of the trademark uses it in connection with different products, like hair dryers, the public may be deceived into believing that the trademark is connected with a different line of products. That could render the trademark invalid.
What is the implication if the owner of a trademark stops using it, closes up his shop or rebrands? The issue here will be that due to lack of use, it is perceived that the owner of the trademark has abandoned its rights, it doesn’t matter whether the trademark is active or has not yet expired. It is not recommended to buy a trademark because the trademark will only be of little value since it may be pending cancellation for non-use.
Notwithstanding, one example in which one may purchase an active but abandoned trademark is when the intention is to avoid a confusion objection. Merely remember that acquiring such a trademark effectively implies that you are only receiving a registration certificate and nothing more.
Please consider asking the real owner of an active trademark that has been abandoned for permission before you register a similar trademark. That will be discussed in another article.
In short, before buying someone else’s trademark, consult with a trademark professional to ensure that you don’t end up with a worthless piece of paper and a major headache.
In few words, seek the counsel of a trademark professional before purchasing another person’s trademark. That to ensure that you are not at risk of ending up with a worthless piece of paper and a lot of headaches.
*In Canada, a trademark may be transferred with or without the goodwill of the business and in respect to some or all goods or services. (Section 48 of the Trademark Act).