How to transfer a trade mark – issues to be aware of

Trade marks can be transferred from one owner to another for a variety of reasons, including the sale of a business or to resolve a dispute. It is up to the new proprietor to ensure that such dealings are effective and that the appropriate recordal application has been filed with the UKIPO to update the Trade Mark Register.

An effective assignment

The UK incorporates both statute and common law into its judicial system. The Trade Marks Act 1994 states that a trade mark is personal property and can be dealt with or transmitted in the same manner as any other property and that a trade mark assignment is only effective if in writing and signed by the assignor. The two types of document that enable the transfer of property, originate from the following law:

1. An assignment agreement, governed by the common law principles of contract law requires the agreement to include an offer, an intention for the parties to create a legal relationship and consideration, where both parties gain from the contract. Consideration is normally provided with a payment from the assignee to the assignor in return for transferring the trade mark. If the consideration has not been clearly set out in the assignment document or there is no evidence of the consideration being given, then the contract is void.
   
2. A deed of assignment is a written document that is signed, sealed and delivered to become a binding obligation on the parties even if there is no consideration. A deed must be drafted with specific and accepted language, such as the phrase “signed and delivered as a deed” and signed by both parties in the presence of witnesses, who can verify the signature of the document, as set out in the Law of Property (miscellaneous provisions) Act 1989.
   

It is critical that the assignment document also includes the following:

1. A clear operative clause that sets out the rights, obligations and responsibilities of the contracting parties and specifies the actions that the parties must take to fulfil their contractual obligations under the agreement, that will lead to the transfer of the trade marks.
   
2. The accurate names and addresses of the assignor and assignee, with the assignor’s details mirroring those on the UKIPO register.
   
3. The territory, the mark, official number and classes of each mark, along with any unregistered trade marks to be assigned.
   
4. The correct signatures. If the assignor or assignee is an individual, they can simply sign an assignment agreement or sign a deed of assignment before a witness. For a UK entity, a director can sign on behalf of a company in the presence of a witness who attests the signature or alternatively, two authorised signatories can sign an agreement under the Companies Act 2006. An authorised signatory includes the directors of a company, and in the case of a private or public company, the secretary. Additional authorised signatories can be appointed through a board resolution.
   
5. An indication of whether the rights are assigned with full title guarantee, where the assignor a) is entitled to sell the trade mark, b) will at their own expense, do all that they reasonably can to vest the title to the trade mark in the assignee and c) that the trade mark is free from encumbrances and adverse rights, other than those which the assignor does or could not reasonably know about. A limited title guarantee is narrower in scope and does not extend much beyond a) and b), above.

Recording a change of ownership on the UKIPO Register

We regularly advise clients on the procedure and requirements for recording changes of ownership at the UKIPO. The most frequent issues considered are set out below:

1. Why should we record the transfer?
   While it is not compulsory to record a change of ownership on the register, doing so entitles the new proprietor to claim damages following the infringement of a trade mark registration and provides redress against another party acquiring a later interest in the trade mark registration. A recordal also provides a public notice of the ownership of the trade mark and facilitates the enforcement of the trade mark registration or the filing of oppositions and invalidity actions.
   
2. What if there is a difference between the assignor’s name and address in the assignment document, and those on the register?
   We will need to consider the reasons for the discrepancy before we can record the assignment. For example, is there a missing recordal that we can file or do we need to apply for a correction of the register?
   
3. Do we need to pay stamp duty on the transfer?
   Stamp duty is no longer payable on the transfer of intellectual property in the UK, but it can still apply if other transferable property has been included in the assignment. We will need to consider the assignment document to confirm to the UKIPO whether stamp duty is payable.
   
4. Do we have to provide a full copy of the trade mark assignment because it is contained within a large or confidential document?
   If possible, we should include a copy of the assignment document with the recordal form to avoid delays and queries with the recordal. We will also need to review the document to be certain that there has been an effective assignment of the trade marks and authorise the change on the register. If it is not possible to provide the full assignment document, we can consider alternatives further with you, such as a redacted version of the agreement or selected sections.
   
5. How do we record a company merger?
   Mergers and changes in the legal status of a company can also be treated as changes of ownership when the entity that owns the trade marks has changed. It should be possible to record such a change.

There are a surprisingly wide range of issues to consider when recording a change of ownership at the UKIPO. Please get in touch if you wish us to consider your change of ownership recordal. If you would like to discuss any aspect of trade mark law or get advice on your own intellectual property, please contact GJE’s attorneys at gje@gje.com.