Most brand transfers we are asked to look at were done properly on the commercial side and left incomplete on the only side that decides ownership. Start with the question nobody asks first. Is the business that uses the mark moving too? Section 38 of the Trade Marks Act, 1999 lets a registered mark be assigned with or without the goodwill of the business — so both are lawful, and they are not the same transaction. Because if goodwill did not move, section 42 is waiting. Where a mark is assigned otherwise than in connection with the goodwill of the business, the assignment shall not take effect unless the assignee applies to the Registrar for directions about advertising it within six months of the date of the assignment — extendable, but by no more than three months in the aggregate — and then advertises as directed. Read that consequence again, because it is not a penalty clause. Miss it and you are not fined and not irregular. The transfer simply did not happen. And then there is the register. Section 45(2) provides that an instrument for which no entry has been made cannot be admitted in evidence to prove title by assignment or transmission, unless the Registrar or the court otherwise directs. A perfectly good deed, unrecorded, is a document you cannot rely on at the moment you need it most. Six months turns up three times in this chapter — on the Registrar certificate under section 40(2), on an approval under section 41, and on section 42. Three different provisions, one period, and it runs from the date on the deed. So the useful question on the day of signature is not whether the paperwork is done. It is: which of these three clocks did we just start?
What is on this page
A trade mark assignment transfers a statutory right: the registered proprietorship of a mark, for identified goods or services. It is a narrow thing, narrower than the word brand suggests, and the gap between the two is where most disappointment on this subject lives.
What does not move unless it is separately dealt with: the artwork as a drawing, the written material on the packaging and the website, the shape or appearance of the product, the domain name, the social accounts, the recipes or know-how, the customer list, and the company that owns any of them. Each of those sits in its own regime or its own asset list.
A buyer who pays for a brand and receives only a trade mark registration has not been cheated. They have bought exactly what the deed said, which was less than what they pictured.
The sentence worth putting at the top of any term sheet. List what is moving rather than naming the brand. A brand is a commercial idea. A trade mark registration is a numbered right over specified goods, and only the second is what a deed can transfer.
The Act is built on a separation that most owners have never had reason to notice. The mark is one thing. The business in which the mark has been used is another. They usually travel together, and the law does not require them to.
That separation is the hinge of this whole page. Nearly every question a party asks us about a transfer turns out, on examination, to be a question about whether the business went with the mark or stayed behind.
It is also the question parties answer most loosely at the negotiating stage, because at that stage it sounds like a philosophical distinction rather than a term. It is a term, and it has a six month consequence attached to it.
It helps to see why the Act was built this way. A mark is a badge of origin, and the thing it points at is a trade. Parliament could have insisted the two never be separated, and some systems historically did. Indian law allows the separation and then regulates it, which is a more flexible answer and the reason the conditions exist at all.
For this purpose, goodwill is not the figure on a balance sheet. It is the custom and connection attaching to the business in which the mark has been used, the thing that makes customers come back to that trade rather than to another.
So the practical question is not accounting. It is whether the buyer is acquiring the trade the mark has been attached to, or only the badge that was attached to it. A buyer taking over the factory, the suppliers, the customers and the order book is taking goodwill. A buyer taking a name to put on their own existing production line is not.
The test we use in a first conversation. After the deal, will the seller carry on trading in the same line under a different name? If yes, the goodwill almost certainly stayed with the seller, and you are on the route that has conditions attached.
Four questions that usually settle it. Is the seller keeping the same customers? Is the seller carrying on the same trade under another name? Is the buyer taking any part of the seller operations, staff or supply? And could the buyer run this mark from day one without anything else from the seller? A yes to the last one usually means no goodwill moved.
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Section 38 of the Trade Marks Act, 1999 provides that a registered trade mark is assignable and transmissible whether with or without the goodwill of the business concerned, and in respect either of all the goods or services for which it is registered or of only some of them.
Both routes are lawful. Nothing about an assignment without goodwill is irregular, and parties who take that route have not done anything they need to be defensive about.
What differs is the consequence. One route completes on execution and recording. The other carries a condition which, if unmet, means the transfer never took effect at all. Choosing between them is a commercial decision; knowing which one you chose is not optional.
One further point that saves arguments later. The route is determined by what actually happened commercially, not by what the deed says happened. A document asserting that goodwill moved, where the seller plainly carried on the same trade under a new name, does not place the transaction on the goodwill route. The facts decide, and the deed is evidence of them.
So do not draft around it. Writing together with the goodwill of the business into a deed where no trade moved does not switch routes. It creates a document that misdescribes the transaction, which is a worse position than simply doing the six month step.
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Section 39 provides that an unregistered trade mark may be assigned or transmitted with or without the goodwill of the business concerned. So a brand that was never registered is still capable of being transferred.
What changes is everything that follows the transfer. There is no register entry to record it against, no registration to inherit, and no certificate to hand over. The buyer takes whatever rights the seller had built up through use, and proving those later is a matter of evidence rather than of an entry.
Where a business is being acquired largely for an unregistered name, the question worth asking early is whether to apply for registration before the transfer or after it, because the answer affects who the applicant is and what has to be shown. That is trademark registration work and it is better sequenced than retrofitted.
A registered mark can be assigned for everything it covers or for part of it. This is genuinely useful and it is under-used, because most people assume a registration is indivisible.
A business selling one product line and keeping another can move the mark for the goods in that line alone. The schedule to the deed then has to identify, precisely, which part of the specification is going, and precision here is not a drafting nicety: an ambiguous partial assignment produces two parties each believing they own the mark for an overlapping set of goods.
Where partial assignments go wrong. The specification is described in the deed in the parties own commercial language rather than in the words of the registration. Use the registration wording, exactly, and attach the entry. A deed that says the snacks range is not a deed that identifies goods.
Section 37 allows the person entered in the register as proprietor to assign the mark and to give receipts for the consideration, subject to the Act and to any rights appearing from the register to be vested in any other person.
Two things follow. The power to assign belongs to the person the register names, not to the person who commercially owns the business. And rights that appear on the register as vested in somebody else qualify what the proprietor can give.
This is why the first step in every one of these transactions is to read the entry. The commonest obstacle we find is not a dispute; it is that the register still names a proprietorship, an individual, or a company under its former name, and the person proposing to sign is somebody else.
The phrase about rights appearing from the register to be vested in another person is doing quiet work too. Where something stands noted against the entry, the proprietor power to assign is subject to it, and a buyer who has not looked at the entry has not seen what qualifies what they are being offered.
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Nobody can transfer more than they hold, and on a trade mark what is held is often less tidy than the seller believes.
Things that reduce what can be given: a licence already granted to a third party who continues to use the mark, an outstanding opposition or rectification, a pending examination report, an earlier assignment that was never recorded, or a security interest. None of these prevents a sale. All of them change what is being sold.
The seller is usually not concealing any of this. They have simply not thought of the mark as a thing with a history. Asking directly, in writing, before the deed is drafted, surfaces almost all of it.
There is a tactful way to ask, and it gets better answers than a formal enquiry list. Ask the seller to tell you the story of the mark: who applied for it, whether anybody has ever been allowed to use it, whether anybody has ever objected to it, and whether it has ever been put up as security. Told as a history rather than answered as a questionnaire, the gaps surface naturally.
Reduced to its core, whether a transfer works turns on three questions, and the rest of this page is an expansion of them.
One. Did the business move with the mark? If not, a six month condition applies and the transfer does not take effect without it.
Two. Does the transfer run into any of the restrictions? Two owners of confusingly similar marks, a split of India by territory, a certification mark, or associated marks.
Three. Has it been recorded? Until it is, the instrument generally cannot be put in evidence to prove the title it created.
Three questions, answerable in a first conversation. The reason transfers fail is almost never that one of them was answered wrongly. It is that none of them was asked.
The order matters as much as the questions, since the reply to each reshapes the one after it. Whether goodwill moved affects what the deed must say. Whether a restriction applies can change the structure entirely. And only once both are settled is it worth thinking about the recording, which is otherwise an application to record a transfer that may not have happened.
The Act does not treat marks as freely tradable property, and the reason is that a trade mark exists to tell the public where goods come from. A transfer that defeats that purpose is one the Act will not permit.
So there are transfers that cannot be made, not because the parties have drafted badly but because the result would be objectionable in itself. The next several sections set them out, and it is worth reading them before agreeing terms rather than after.
It is worth being clear about who these restrictions protect, because parties tend to read them as obstacles placed in the way of a legitimate deal. They are not aimed at the parties at all. They exist for the benefit of people who are not in the room and will never see the deed, namely the customers who rely on the mark to tell them where something came from.
Read that way the restrictions become predictable rather than arbitrary. Every one of them is triggered by a result that would leave the public unable to rely on the badge, and none of them is triggered merely because a transfer is unusual or the price is low.
Section 40 provides that a trade mark is not assignable or transmissible where the result would be that more than one person would have exclusive rights to the use of nearly resembling or identical marks, in relation to the same or similar goods or services, or to goods or services associated with each other.
The situation it is aimed at is a familiar one in practice. A business owns a family of similar marks, or a mark registered in several classes, and sells part of it. The buyer and the seller each then have exclusive rights to something a customer would not tell apart.
That is the mischief, and the restriction applies to the result rather than to anybody intention. Two honest parties doing a sensible commercial deal can produce it without noticing.
Note how wide the trigger is drawn. It is not confined to identical marks on identical goods. It reaches nearly resembling marks, similar goods or services, and goods or services associated with each other. A seller keeping a sub-brand that merely resembles the one being sold can fall inside it.
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The restriction bites where the use of the marks by the two parties would be likely to deceive or cause confusion. That is the operative test and it is worth separating from how people instinctively read it.
It is not about whether the parties would compete, or whether either would be harmed, or whether anybody intends anything. It is about the position a member of the public would be in, faced with two similar marks on similar goods from two unconnected sources.
The way to ask it about your own deal. After this transfer, could a customer buy the other side goods believing they were buying ours, or the reverse. If yes, the restriction is in play and the question needs an attorney before a deed is drafted.
There is a reason the test is phrased around deception and confusion rather than around competition. Two businesses can be entirely non-competing and still leave a customer unable to tell whose goods they are buying, and that is the harm the section addresses. Conversely, fierce competitors with clearly distinct marks raise no issue under it at all.
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Section 40 carries a proviso, and it matters because it rescues a category of transfer that would otherwise fail.
An assignment is not invalid under the section where, because of limitations on the rights, the exclusive rights would not be exercisable by two or more persons in relation to goods or services sold or traded in the same markets. In other words, where the registrations themselves carry limitations that keep the two parties apart, the objection falls away.
This is a technical point and it is the reason the question should not be answered from a web page. Whether limitations on a particular registration have that effect is a matter of reading the entries, and reading them is attorney work.
It is worth knowing the proviso exists even if you cannot apply it yourself, for one practical reason. A transfer that looks doomed on a first reading of section 40 may not be, and a party told flatly that their deal is impossible should ask whether the limitations on the registrations have been considered before accepting that.
The Act anticipates that parties will be uncertain, and builds in a way to resolve it before the money moves. It is one of the least used useful provisions in this chapter.
A proprietor who proposes to assign may submit a statement of case to the Registrar, who may issue a certificate stating whether the proposed assignment would or would not be invalid. That certificate is conclusive unless it was obtained by fraud or misrepresentation, and it is subject to appeal.
There is a catch in the tail of it and it is easy to miss. A certificate in favour of validity is conclusive only if the person in whose favour the assignment is made applies to record the title within six months of the date on which the certificate was issued. Obtain the comfort and then sit on it, and the comfort expires.
Section 40, Trade Marks Act, 1999 — a mark is not assignable or transmissible where the result would be that more than one person had exclusive rights to nearly resembling or identical marks for the same or similar or associated goods or services, where the use would be likely to deceive or cause confusion; proviso where limitations mean the rights are not exercisable by two or more persons in the same markets. Sub-section (2) — statement of case to the Registrar; certificate as to whether the proposed assignment would be invalid; conclusive unless obtained by fraud or misrepresentation; subject to appeal; a certificate in favour of validity conclusive only where the application under section 45 is made within six months of its issue.
Why so few people use it is not mysterious. It takes time, it involves putting your proposed transaction in front of the Registry before it is done, and commercial parties generally prefer to close and deal with consequences afterwards. On a transfer of any real value that calculation is the wrong way round, because the consequence here is that the transfer may be invalid.
When it is clearly worth doing. Where the seller is keeping marks that resemble the one being sold, where the two sides will trade in overlapping fields, or where the price is large enough that an invalid transfer would be a serious loss. In those cases the certificate is cheap relative to what it protects.
Section 41 deals with the geographic version of the same problem. It restricts an assignment or transmission where the result would be that one person had an exclusive right limited to use in one part of India, and another person had a right to a nearly resembling or identical mark for the same or similar goods or services limited to another part.
The commercial instinct behind such a deal is perfectly natural. A business with a strong regional presence sells its northern operation and keeps the south, and both want to carry on using the name in their own territory.
The Act looks at the same transaction and sees a public walking between two states and meeting the same mark on the same goods from two unconnected businesses.
These deals arise more often than one might expect, particularly where a family business divides between branches, or where a regional licensee wants to own the name in the territory it has built up. The commercial logic is usually sound and the statutory problem is usually unanticipated.
Section 41 does not forbid territorial splits outright. The Registrar may approve the transfer where it is not contrary to the public interest, and an approved transfer is not invalid provided the application to record is made within six months of the approval.
Two points for anybody contemplating this. The approval is discretionary and turns on the public interest rather than on the convenience of the parties, so it is not a formality. And there is that six month link again, attaching to the date of the approval.
If a territorial split is central to your deal, make the approval a condition of completion rather than an afterthought. A purchase price paid for rights the Registrar may decline to sanction is a poor position to negotiate from.
Notice also that the test is the public interest rather than the interests of the parties. That shapes how a request should be presented: an explanation of why consumers in each territory would not be misled is more to the point than an account of why the split suits the two businesses.
A certification trade mark is a different animal from an ordinary one. It certifies something about the goods rather than indicating a single trade source, and it is held by a body that does not itself trade in those goods.
Section 43 provides that a certification trade mark is not assignable or transmissible without the consent of the Registrar, applied for in writing in the prescribed manner. The reason is obvious once the function of such a mark is understood: a certification mark in the hands of somebody unwilling or unable to certify is worse than no mark at all.
If what you are buying or selling turns out to be a certification mark, stop and take advice. It is a small category and parties are regularly unaware they are in it.
How would you know? The register entry says so, which is another reason the first step in any of these transactions is to read it rather than to rely on what the mark looks like. Certification marks frequently have ordinary-looking names, and nothing on a letterhead reveals the category.
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Section 44 provides that associated trade marks are assignable and transmissible only as a whole and not separately, while being treated as separately registered marks for all other purposes.
The practical effect is a trap for a seller who wants to keep part of a family. Where marks are associated, selling one and keeping the other is not available as a structure, and discovering that after terms are agreed means reopening the commercial deal.
Ask the question at the term sheet stage. Are any of these marks associated with each other or with marks we are not selling. It is a question for an attorney reading the entries, it takes very little time, and the answer can change the shape of the transaction.
The second half of the section is easy to overlook and is a relief. For every purpose other than assignment and transmission, associated marks are treated as separately registered trade marks. So the restriction is confined to moving them; it does not bundle them together for renewal, for use, or for anything else.
Read this chapter end to end and the same period turns up in three unrelated provisions, each attached to a different event. It is the single most useful pattern to carry away from this page.
| Provision | Six months runs from | What is lost if it is missed |
|---|---|---|
| Section 40(2) certificate | The date the certificate was issued | The certificate stops being conclusive in favour of validity |
| Section 41 approval | The date of the approval | The protection the approval gave to the territorial split |
| Section 42 directions | The date the assignment was made | The assignment itself, which does not take effect |
Notice that the first two run from a Registry event and the third runs from the deed. That difference is what makes the third one so easy to lose: nobody sends you anything on the day it starts.
The one attached to the certificate under section 40(2). A proprietor who has gone to the trouble of putting a statement of case to the Registrar and obtaining a certificate that the proposed assignment would not be invalid has bought real comfort, and that comfort has a shelf life.
It is conclusive in favour of validity only if the application to record the title is made within six months of the certificate being issued. So the certificate is not a document to obtain early and act on at leisure; it is the start of a sequence.
Where a transaction is going to take time to negotiate, that argues for obtaining the certificate once the shape of the deal is settled rather than at the exploratory stage.
It also has an implication for how a transaction is sequenced. If the certificate is to be relied on, the recording application is not a tidying-up exercise to be done when somebody has a free afternoon. It is a step with a deadline, and the deadline was set running by a document the parties themselves asked for.
The one attached to an approval under section 41. Where the Registrar has approved a territorial split as not contrary to the public interest, the transfer is not invalid provided the recording application follows within six months of that approval.
The same discipline applies and for the same reason. An approval is a permission to do something, and a permission unused within its window stops protecting the thing it permitted.
There is one difference worth noting between this and the certificate. A section 41 approval is a permission for a transfer that would otherwise be restricted, so without it the transfer is in difficulty from the start. Letting the six months lapse therefore does not merely remove a comfort; it removes the basis on which the structure was workable.
Anybody doing a territorial split should treat the approval and the recording as a single two part step, planned together, rather than as a permission obtained now and used later.
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This is the one that costs people their transactions, and the next group of sections is devoted to it.
It runs from the date on which the assignment is made. Not from completion, not from payment, not from the day anybody got round to thinking about the Registry. From the date of the assignment, which in practice means the date on the deed.
And unlike the other two, nothing triggers a reminder. There is no certificate, no approval and no Registry correspondence. There is a signed document in a drawer and a clock that nobody can see.
It is also the only one of the three where the consequence falls on the transfer itself rather than on a protection around it. Miss the first and you lose a certificate. Miss the second and you lose an approval. Miss the third and there is nothing to lose it from, because the assignment did not take effect.
Because of who is in the room at the moment they start. A trade mark assignment is usually executed at the end of a commercial negotiation, in the presence of the people who did the deal, and the mood is that the matter is now closed.
The step that has to follow is a Registry step, and the people who do Registry steps are frequently not in the room and sometimes have not been engaged. The gap between the commercial closing and the statutory completion is where transfers quietly fail.
The pattern we see most often. Deed signed in month one. Money paid in month two. Everybody moves on. In month eight somebody looks at the register for an unrelated reason and the whole thing has to be reconstructed, if it can be.
There is a second structural reason, and it is about who pays. The commercial advisers are paid for the deal and the deal is done. The step that remains is small, unglamorous and belongs to nobody in particular, and small unglamorous tasks that belong to nobody are the ones that do not get done.
On the section 42 route there is some relief, and anybody who has just discovered they are late should read this carefully before concluding that nothing can be done.
The application for directions may be made within six months of the date of the assignment, or within such extended period as the Registrar may allow, not exceeding three months in the aggregate. So the outer limit is six months plus up to three more.
That is a real window and it is the window a late party is living in. It is not automatic, it is an extension the Registrar may allow, and the case for it is better made early in the extension period than at the end of it.
Two practical points for anybody in that position. The aggregate cap means there is a hard outer edge, so the question is not whether you can keep extending but how much of a fixed window is left. And an application supported by a straightforward explanation of what happened tends to read better than one that obscures the delay.
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The date on which the assignment is made. Which makes the date written on the deed one of the most consequential things in the document, and one of the least considered.
Two consequences follow. A deed dated earlier than it was signed does not create a convenience; it shortens a statutory period that has real teeth. And a deed left undated, or signed by the two sides on different days without the position being settled, creates an argument about when the clock started.
Settle the execution date deliberately, write it on the document, and treat it as the first entry on the date sheet rather than as a formality at the foot of the page.
Where completion is conditional, say so in the document. If the parties intend the transfer to take effect only on final payment or on some other condition, the deed should state that, because otherwise the date at the foot of the page is taken to be the date the assignment was made and the clocks start whether the parties meant them to or not.
The remedy for all of this is embarrassingly simple and almost never done. On the day of execution, one sheet listing the date of the assignment, the six month date, the outer extension date where section 42 applies, and the name of the person responsible for the Registry step.
Give it to a named person on both sides, not to the file. Obligations that belong to a transaction rather than to a person are the ones that lapse, because after completion the transaction has no owner.
Four lines on one page, prepared the day the deed is signed. Date of assignment. Does section 42 apply, yes or no. Six months from the date of assignment. Who is making the application, by name. That page has saved more transfers than any clause we have ever drafted.
Put a copy with the deed itself rather than only in a file note. The deed is the document somebody will eventually pull out when a question arises, and a dated sheet stapled to it answers the question at the moment it is asked instead of starting a search.
Everything up to here has been preparation for this group of sections, because assignment apart from goodwill is where transfers fail most often and most completely.
It is worth saying again that there is nothing improper about the route. Businesses buy names without buying the trade behind them for entirely sensible reasons, and the Act expressly permits it. The danger is not in choosing it. The danger is in choosing it without knowing you have.
And parties do not usually choose it deliberately. They agree a price for a brand, the seller keeps trading under a new name, and nobody says the words apart from the goodwill of the business out loud at any point in the negotiation.
The words that would have alerted everybody are precisely the words nobody uses in a negotiation. Commercial parties talk about buying the name, taking over the brand, or acquiring the label. All three can describe either route, and none of them makes the distinction the statute turns on. The job of the first conversation is to translate the commercial description into the statutory one.
Where a trade mark, whether registered or unregistered, is assigned otherwise than in connection with the goodwill of the business in which it has been or is used, the section imposes a condition on the assignee and attaches a consequence to failing it.
The condition has two limbs. Apply to the Registrar for directions with respect to the advertisement of the assignment, within the period the section allows. Then advertise the assignment in the form and manner and within the period the Registrar directs.
Section 42, Trade Marks Act, 1999 — where a trade mark, registered or unregistered, is assigned otherwise than in connection with the goodwill of the business in which it has been or is used, the assignment shall not take effect unless the assignee applies to the Registrar for directions with respect to the advertisement of the assignment not later than the expiration of six months from the date on which the assignment is made, or within such extended period as the Registrar may allow, not exceeding three months in the aggregate, and advertises it in the form and manner and within the period the Registrar directs. Explanation — an assignment is not deemed to be otherwise than in connection with the goodwill where it is (a) of a mark in respect of only some of the goods or services for which it is registered, accompanied by the transfer of the goodwill of the business concerned in those goods or services only, or (b) of a mark in respect of goods to be exported from India or services for use outside India, accompanied by the transfer of the goodwill of the export business only.
Two limbs, and both are required. Applying for directions is not enough on its own, and advertising without having asked for directions is not compliance either. The section asks for the application within the period and then the advertisement in the form, manner and period directed.
The wording of the consequence deserves its own section because almost everybody reads it as something milder than it is.
The section does not say the parties commit an offence, or that the assignment is irregular, or that it is voidable at somebody option, or that it needs regularising. It says the assignment shall not take effect. The transfer of the right does not happen.
That distinction is the whole reason this page exists. A party told that their assignment is defective hears an administrative problem. A party told that their assignment did not take effect understands that they paid for something they do not have.
Why a stamped, signed deed does not answer it. Stamping goes to duty on the instrument. Signature goes to the contract between the parties. Neither speaks to whether the Act gives the instrument effect to move a statutory right, and it is the Act that decides that question.
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The first limb is an application to the Registrar for directions with respect to the advertisement of the assignment. Be clear about what it is not. This is not the application to record the title; that sits in a different section altogether, and discharging one leaves the other untouched.
Note also whose obligation it is. The section places it on the assignee. In practice that means the buyer, and a buyer relying on the seller to attend to it is relying on somebody with no remaining interest in the transaction.
If you are the seller and you want the matter closed, the sensible course is not to assume it is not your problem. A transfer that fails is a transfer that comes back to you, usually with a demand attached.
Where the parties are cooperative, the cleanest arrangement is to make it a completion obligation in the deed: the assignee will make the application within a stated number of days, and the assignor will provide whatever is needed for it. That converts a statutory risk into a contractual duty somebody can be held to.
A clause worth insisting on if you are the seller. An undertaking by the buyer to make the application within the period, with a right for you to make it yourself at their cost if they do not. A failed transfer tends to come back to the seller, so the seller has a real interest in it happening.
The second limb is the advertisement itself, in the form and manner and within the period the Registrar directs. The content of that is not a matter of choice; it follows the directions given.
What this limb is for is worth understanding, because it explains why the section exists at all. A mark being separated from the business it has been used in is a change the public cannot see. Advertisement is how the market is told that the badge it has been relying on now belongs to somebody else.
Seen that way, the condition is not bureaucratic. It is the price the Act charges for allowing a mark to be detached from its trade, and the reason the price is non-negotiable is that the public is the party being protected.
Because the directions govern the form, the manner and the period, this is not a step that can be prepared in advance and filed away. The sequence is fixed: apply first, receive the directions, then advertise in accordance with them. A party who advertises in anticipation has not complied with directions that had not yet been given.
The section carries an Explanation setting out two situations that are not deemed to be assignments made otherwise than in connection with goodwill, even though they might look like it. Both are genuinely useful and both are frequently missed.
They matter because a transaction that falls inside either of them is not on the section 42 route at all, and the six month condition does not apply to it. Establishing that early saves a party from either an unnecessary filing or an unnecessary panic.
Both are drafted as deeming provisions, which is why they read awkwardly. The section does not say these transactions are assignments with goodwill; it says they are not deemed to be assignments made otherwise than in connection with goodwill. The practical effect is the same, and the double negative is the reason they are so often skimmed over.
If your transaction might fall inside either, establish it at the outset and record the basis in the file. An assertion months later that a transfer was within the Explanation is harder to make good than a contemporaneous note of why it was.
The first is an assignment of a mark in respect of only some of the goods or services for which it is registered, accompanied by the transfer of the goodwill of the business concerned in those goods or services only.
So a business selling one product line, transferring the mark for that line and transferring the trade in that line along with it, is not making an assignment apart from goodwill. It is making a partial assignment with the matching partial goodwill, and that is treated as a goodwill transfer.
The condition inside the Explanation is the part to watch. It is not enough that the assignment is partial. The goodwill of the business in those goods or services has to go with it. A partial assignment with no goodwill at all is still on the section 42 route.
Drafting matters here more than anywhere else on the page, because the Explanation requires a match between two things: the goods or services assigned, and the goodwill of the business in those same goods or services. A deed that transfers the mark for part of the specification but is silent about the trade in that part has not evidenced the match it needs.
The second is an assignment of a mark in respect of goods to be exported from India, or services for use outside India, accompanied by the transfer of the goodwill of the export business only.
This recognises a real commercial pattern. A manufacturer sells its export operation and keeps its domestic trade, and the mark has to follow the export business. Without the Explanation, that would be an assignment apart from the domestic goodwill and would carry the condition.
Both Explanations share one feature worth noticing. In each, some goodwill moves, matched to what is being assigned. The section is not concerned with whether the whole business moved. It is concerned with whether the mark has been cut loose from any trade at all.
There is a limit built into it which is easy to miss on a first reading. It covers goods to be exported from India and services for use outside India, with the goodwill of the export business. A transaction that also moves part of the domestic trade is not squarely within it, and should not be treated as though it were.
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Given the condition attached, it is reasonable to ask why anybody takes this route deliberately, and there are good answers.
A buyer may want a name for a product line of their own and have no interest in the seller operations, staff or liabilities. A seller may be willing to part with a name they have stopped using while carrying on their trade under a new one. A group may be moving marks to a holding entity that does not trade. In each case buying the business would be absurd.
So the route is not a mistake to be avoided. It is a structure with a step in it, and the only failure is not taking the step. Where the parties know from the first conversation that section 42 applies, it is a diary entry and nothing more.
Group reorganisations deserve a specific mention, because they are the most common version of this and the most commonly overlooked. Moving marks from a trading company to a holding company is an assignment apart from goodwill in most cases, the parties are related, nobody is at arm length, and precisely because it feels internal the statutory step gets treated as paperwork that can wait. It cannot.
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Having dealt with whether the assignment takes effect, the second half of the problem is proving that it did. These are different questions and parties routinely treat them as one.
An assignment can be entirely effective and still leave the assignee unable to demonstrate their title when it matters, because the Act ties proof of title by assignment to the register rather than to the instrument.
That is a deliberate choice by the legislature and it is consistent with the rest of the scheme. A register exists so that the world can find out who owns a mark. A system in which ownership could be proved by a private document nobody had seen would defeat it.
It is also why an assignee should resist the temptation to regard recording as the seller problem or as a formality for later. Once the consideration has been paid, the register is the only thing standing between the assignee and a dispute about what they bought, and it is the one part of the transaction entirely within their own control.
Section 45(1) requires a person who becomes entitled by assignment or transmission to a registered trade mark to apply in the prescribed manner to the Registrar to register his title. On proof of title to the Registrar satisfaction, that person is registered as proprietor in respect of the goods or services concerned, and particulars of the assignment or transmission are entered in the register.
Two words carry weight there. Transmission covers title passing otherwise than by a voluntary transfer, which brings in devolution by operation of law. And proof of title is what the application actually turns on, which is why the chain of documents matters more than the form.
The phrase in the prescribed manner is doing real work and is the reason no form number appears on this page. What is prescribed sits in the Rules, the Rules are amended, and the current requirement is a thing to establish at the time of filing rather than to carry in one head from a previous transaction.
The two applications are not the same application. The section 42 application is for directions about advertising. The section 45 application is to record the title. On a without-goodwill transfer both are needed, and doing one does not discharge the other.
Proof of title, which means a chain that runs without a gap from the person the register currently names to the person now claiming to be entitled.
Where the register names the present assignor and the deed is between them and the assignee, the chain is one link and the application is straightforward. Where the register names somebody from two transactions ago, or an individual whose business became a company, or a company under its old name, the chain has to be built and evidenced before the new link can be added.
That is the single biggest determinant of how long this takes, and it is knowable on day one by reading the entry. A gap discovered at filing is months; the same gap discovered before drafting is a document to collect.
Build the chain backwards from the present claimant and stop at the name on the register. Every step between those two points needs a document, and where a step was a change of legal form rather than a transfer, it needs the document that evidences that change instead. Doing this on paper before filing takes an afternoon and prevents the commonest query there is.
Section 45(1) carries a proviso. Where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register it until the rights of the parties have been determined by a competent court.
This is worth knowing before a dispute develops rather than after. Once the parties are in disagreement about whether the transfer was good, the Registry is entitled to stand back and wait, which means neither side gets the register changed while they argue.
The practical lesson is about sequencing. If relations are deteriorating, recording an undisputed transfer promptly is far easier than recording a disputed one later, and the window for doing it quietly closes the moment a letter is sent.
It also quietly explains why a buyer should record promptly even on a friendly transaction. Friendly transactions become unfriendly for reasons that have nothing to do with the mark, and the proviso does not ask what the dispute is about. Once validity is in issue between the parties, the Registry may simply wait.
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Section 45(2) is the provision that gives recording its force. A document or instrument in respect of which no entry has been made in the register under sub-section (1) shall not be admitted in evidence by the Registrar or any court in proof of title to a trade mark by assignment or transmission, unless the Registrar or the court otherwise directs.
Consider what that means on the day it bites. You hold a valid deed. Somebody is using your mark. You go to enforce, and the document that proves the mark is yours is one the court will not receive for that purpose unless it directs otherwise.
The discretion is not a safety net to plan around. The section allows the Registrar or the court to direct otherwise, and that is a real power. It is also a discretion exercised by somebody else, on a day you did not choose, in a matter you are already fighting. Recording the transfer costs a fraction of what persuading a court to overlook the omission costs.
The exceptions are narrow and sensible. The bar does not apply as against an application to record the title under sub-section (1), or an appeal from an order on such an application. Nor does it apply to an application under section 57, or an appeal from an order on that.
The logic is plain once seen. You must be able to use the instrument to get the entry made, otherwise the provision would be circular and nothing could ever be recorded. What you cannot generally do is use the unrecorded instrument to prove ownership for other purposes while leaving the register untouched.
It is worth not over-reading the exceptions either. They permit the instrument to be used in the proceedings that exist to fix the register. They do not create a general licence to rely on an unrecorded deed because some application is pending somewhere, and a party arguing otherwise in an enforcement action is arguing uphill.
A caution for anybody checking this section against a copy they find online, and it is a caution about the copy rather than about the law.
Widely circulating texts of section 45(2) name the Appellate Board among the bodies that may otherwise direct. That body no longer exists; its functions were moved in 2021. Our trademark registration page deals with that change and what it means for appeals, and there is no reason to set it out twice.
The point to carry here is narrower. If you are reading a copy of this section that refers you to a body you cannot now approach, you are reading a pre-2021 text, and anything else on that page about procedure deserves the same suspicion.
There is a wider habit worth taking from this, which costs nothing. When you check any provision of this Act online, look first for a reference to a body or a procedure you know has changed. If you find one, you have dated the page, and you can treat everything else on it accordingly without needing to verify each statement separately.
Our part is on this page. The Registry part depends almost entirely on the quality of the proof of title filed with the application, and that is within your control rather than theirs.
A clean single link with the deed and the evidence attached moves through. A chain with a missing step generates a query, and the query is answered by producing the document that was missing, which somebody then has to find. That is where months go.
So the honest answer to how long it takes is that it depends on what happened to this mark before you bought it, and that you can find out before you start rather than after.
There is one thing you can do that genuinely shortens it, and it is not chasing. File the proof of title complete the first time, including the documents for every intermediate step, even the ones you think are obvious. An application that answers the question before it is asked does not generate the query that costs the months.
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Short is fine. Vague is not. The document has to answer, without reference to anything else, which marks are moving, for which goods or services, from whom to whom, on what date, for what consideration, and whether goodwill is going with them.
Most one page deeds we are shown answer four of those six. The two usually missing are the specification of goods and the position on goodwill, which are precisely the two that determine the statutory consequences.
Six things an operative clause must settle. The marks, by registration number. The goods or services, in the words of the registration. The parties, as the register will name them. The date. The consideration. And goodwill, expressly, in one direction or the other. A deed that leaves the last one to inference has left the most expensive question open.
Recitals on this kind of document are not decoration. They are where the chain of title is stated, and the Registry will read them against whatever proof is filed.
A useful recital says how the assignor came to own the mark: applied for and registered by them, or acquired under an earlier instrument which is identified, or devolved on them in a way that is described. A useless recital asserts ownership without explaining it.
Where the chain has a weak link, the better course is to describe it accurately and deal with it, rather than to write a confident sentence that the documents will not support. Confident recitals are the ones that attract queries.
Keep them factual and dated. A recital that says the assignor has been the registered proprietor since a stated date, under a stated number, is checkable against the entry in seconds. A recital that says the assignor is the lawful owner of the brand is an assertion of a conclusion and tells a reader nothing they can verify.
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The deed should state the consideration and should reflect what is actually being paid. Beyond the obvious reason for that, there is a practical one: the instrument is chargeable with duty, and duty is assessed on what the instrument says.
Where the mark is part of a larger transaction and no separate price was ever put on it, that has to be dealt with deliberately rather than left blank. An allocation that is thought about is far easier to defend later than one invented when somebody asks.
Instalments, escrow and conditions on payment are commercial matters, and they interact with one thing on this page: the date of the assignment. If the parties intend the transfer to happen only on final payment, the document should say so, because otherwise the deed date starts clocks the parties did not mean to start.
The warranties worth having are short and specific, and they map onto exactly the things that go wrong.
That the assignor is the person entitled to the mark and that the register is correct, or if it is not, an obligation to put it right. That the mark is not licensed, charged or otherwise encumbered, or a disclosure of what it is subject to. That no opposition, rectification or other proceeding is pending or threatened. That no earlier assignment was made and left unrecorded.
Add one obligation that is not a warranty and is the most useful clause in the document: that the assignor will do whatever is reasonably required to get the transfer recorded, and that the obligation survives completion. Without it, an uncooperative seller after payment is a real problem. A plain written demand under legal notice is the first step where that happens, and it is far better avoided.
A mark that is still an application rather than a registration can also change hands, and the position needs stating in the deed rather than assumed.
Where something is pending against the mark, the buyer is inheriting it along with the conduct of it. Who instructs, who pays and who decides whether to fight or concede are all questions that should be answered in the document, because they will arise within weeks.
Replying to an examination report is its own exercise and is dealt with as trademark objection reply. Where the question is whether the mark is clear to use at all in a new field, that is a search question and sits under trademark search.
There is a timing point worth building into the deal. Transferring a mark in the middle of a contested proceeding adds a change of party to a matter that is already running to its own dates, and the periods in that proceeding do not pause while the register catches up. Where a proceeding is live, completing the recording promptly stops being good practice and becomes urgent.
The question a buyer most often forgets to ask. Is anybody else currently permitted to use this mark, and on what terms.
An existing licence does not prevent a sale. It changes what is being sold, because the assignee takes a mark that somebody else is entitled to use, possibly for years, possibly exclusively in a territory or a field.
Ask in writing and ask for the document. Where the arrangement turns out to be a content or media licence rather than a trade mark licence, that is a different instrument and sits under content licensing agreement.
Ask the second question as well, which buyers forget: is the licence recorded or purely contractual, and does it bind a successor. The answers determine whether the assignee is taking the mark subject to it as a matter of the register, as a matter of contract, or not at all, and those are three materially different purchases.
Three questions on any existing use by somebody else. Who is using it, under what document, and until when. If any of the three cannot be answered from a document, treat the use as an unknown rather than as a minor detail.
Often the assignment is one schedule in a larger transaction, and the risk then is different. It is not that the mark is overlooked; it is that it is swept up in general words that do not do the statutory job.
A share purchase usually needs no assignment at all, because the company keeps the mark and only its ownership changes. That is share purchase agreement territory. A business purchase that pulls the mark out of the seller entity does need one. A franchise arrangement normally licenses rather than assigns, and is franchise agreement work. Founders dividing assets on separation need the mark dealt with expressly, which is co-founder agreement ground.
In each case the trade mark needs its own instrument and its own recording, even where the commercial bargain is recorded elsewhere. General assignment language in a master agreement is not a substitute, and the broader drafting is agreement drafting work.
On the trade mark side of a transaction, a short and unglamorous list does nearly all the work.
Is the register entry in the seller name, today. Not in the name of a predecessor, a former company name or an individual who has since incorporated.
Is the registration in force, and when does the term end. A mark close to the end of its term is a different asset from one with years to run, and renewal is trademark renewal.
Does the specification cover what the business actually sells. A narrow specification is a common and expensive surprise.
Is anything pending, noted or licensed against it.
And is there an earlier transfer that was never recorded. This is the one that turns a two week recording into a six month one.
Where the papers are scattered or old, establishing what exists and whether it says what people believe is document verification, and putting a long history into usable order is legal file management. A certified copy of a register entry or an earlier instrument, where one is needed for the chain, is certified true copy work. Rights in the artwork and in any copied material travel separately and are copyright registration and, where somebody is already misusing them, copyright infringement notice territory; product appearance is design registration.
The deed of assignment itself, drawn to the transaction rather than to a template, with the recitals that establish how the assignor came to own the mark and the operative clause that says precisely what is being transferred and on what terms as to goodwill.
Alongside it, the application to record the title with the Registry, the supporting proof of the assignor title, the schedule of the marks and the goods or services each covers, and a dated sheet of every period that starts running the moment the deed is executed.
Where the transaction needs more than a deed, we say so rather than stretching one. A transfer sitting inside a share sale, a franchise arrangement or a founders settlement belongs partly in those documents, and they are share purchase agreement, franchise agreement and co-founder agreement work respectively.
The test we apply to a draft before it goes out. Read the operative clause alone, with no other page in front of you, and ask whether a stranger could tell which marks moved, for which goods, and whether goodwill went with them. If any of the three needs the rest of the document to answer, the clause is not finished.
No deed gets drafted until somebody has looked at the entry. That sounds obvious and it is skipped constantly, usually because both sides already know what they own.
What the entry settles is who the registered proprietor actually is today, what the mark covers, whether anything is already noted against it, and whether a previous change of hands or of company name was ever recorded. Any of those can mean the person about to sign is not the person the register recognises.
We report what the entry says rather than what either side believes it says, and we do it in writing with the date we read it. On a transaction that is a different kind of document from an opinion, and it is frequently the one that changes the price.
It is also the cheapest part of the whole exercise and the one with the highest return. An entry takes minutes to read and it has, on more than one matter we have handled, changed who was able to sign, what was actually being sold, and the price the parties had provisionally agreed.
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From the assignor: the registration numbers, the certificate if there is one, proof of how the mark was acquired if it was not applied for by them originally, and a straight answer on whether the mark is currently licensed to anybody or caught up in any proceeding.
From the assignee: who exactly is taking it, in what capacity, and whether they are taking the whole registration or only part of the goods or services.
From both: the commercial terms as actually agreed, including whether goodwill is going with the mark. That last one is not a drafting preference. It decides which statutory route the transaction is on, and getting it wrong at the start is not a thing the deed can repair later.
The one question we ask before anything else. Is the business that uses this mark also changing hands, in whole or in part. Everything else on this page follows from the answer, and it is the question clients are most likely to answer loosely.
We draft, we assemble, we file the application to record and we follow it through to the entry or the query. We read the register and report it. We keep the dates.
Valuing the mark is not ours, nor are the commercial terms, nor any view on whether the bargain is a sound one. Nor will we opine on whether a proposed assignment trips the restrictions, which is an assessment of marks against marks and belongs to an attorney or counsel.
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There is one more boundary worth stating because clients reasonably expect otherwise. We act on the documentation for a transaction the parties have agreed. We are not negotiating for either of them, and where we are preparing a deed both sides will sign, both sides should understand that and each remains free to take their own advice on the bargain itself.
Transactions on marks attract a predictable set of requests, and these are the ones we decline.
A deed dated earlier than the day it is signed. On this subject backdating is not a presentational matter, because three separate periods run from the date of the assignment. That is a line we hold, and we explain the reason rather than just declining.
A recital describing a chain of title that nobody can evidence. If the assignor cannot show how they came to own the mark, the honest course is to say so in the document or fix the gap, not to assert it smoothly.
Silence on goodwill because the parties have not decided. A deed that does not say is a deed that leaves the hardest question to be argued later, and it is the party who paid who will be arguing it.
Acting for both sides where the interests have already diverged. Preparing a document two parties have agreed is one thing. Holding the pen while they disagree is another, and at that point each of them needs their own adviser.
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Our charge for this work is ₹5,999, and the working window we hold to is 7 – 20 days from the day both sides have given us what is listed above. That covers the register reading, the deed, the schedule, the application to record, the filing and the follow-up.
The Registry charges its own fee for recording, and that is not ours. Stamp duty on the instrument is a State matter and is paid where the instrument is executed, at the rate that State applies to a transfer of this kind. Any attorney advising on validity, and any valuation, are separately engaged.
Which of the two parties bears each of those is a commercial question and the deed should say. It is one of the most commonly omitted clauses and one of the easiest arguments to prevent, because the amounts are usually small and the ill will is not.
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A transfer moves a mark. It does not improve one, and the following are not cured by changing whose name is on it.
A registration that was always too narrow. If the specification never covered what the business actually sells, the assignee inherits that gap exactly as it stood.
A mark that has not been used. The vulnerability that comes with long non-use travels with the mark, and the history does not reset on a change of owner. That ground is dealt with on our trademark registration page.
A pending objection or opposition. Those continue, and the assignee takes them on. Replying to an examination report is trademark objection reply work and is not part of a transfer.
A renewal that is overdue. Buying a mark does not restart its term, and an assignment recorded onto an entry that is about to lapse solves nothing. That is trademark renewal.
Rights in things that are not the mark. Artwork, a logo as a drawing, product shape, written material and source code each sit in their own regimes, and they are copyright registration and design registration territory.
You will not find the Registry fee for recording an assignment on this page, nor a stamp duty figure, nor a form number. The omission is deliberate and the reasons differ for each.
The Registry fee sits in the schedule to the Rules and varies with who is filing and how, and it is amended. Stamp duty on an instrument of this kind is set by State legislation and is therefore a different figure depending on where the deed is executed, which is a matter the parties can sometimes choose and should think about. And wherever we went looking for one settled all-India number for either, what came back was a filing company advertising what it charges, which is a price list and not a statutory rate.
What we do instead is establish both figures for your transaction, tell you where each came from, and show them at cost beside our own charge. A number you can trace is useful. A number you cannot is worse than none, because it stops the question being asked.
A point worth raising early with your accountant. Where the deed is executed can affect what is payable on it. That is a decision made before signing, not after, and on a subject with few such openings, a short conversation beforehand is worth real money.
Four lines will do. The registration number or numbers. Who is transferring and who is receiving. Whether the business that uses the mark is moving too. And whether anything is pending on the mark that you know of.
We come back with what the register actually says, the periods that will start on the day of execution, and a plain statement of whether the transaction as described runs into any of the restrictions. Where it looks as though it might, we say so before a deed is drafted rather than after it is signed.
If you are at an earlier stage than that and only testing whether a deal is possible, say so and send the registration number alone. Reading an entry is quick, it costs you nothing to know what it says, and on a surprising number of enquiries the entry itself changes what the parties think they are negotiating about.
The cheapest ten minutes in any brand transaction. Look at the register entry before you agree a price. Who it names, what it covers and when its term ends are all public, and all three are capable of changing the number.
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Send the registration number and tell us whether the business is moving with it. You will get the register position and the dates before any deed is drafted.
The governing provisions sit in Chapter V of the Trade Marks Act, 1999, and they do considerably more than permit a transfer. Section 37 allows the person entered in the register as proprietor to assign the trade mark and to give receipts for the consideration, subject to the Act and to any rights appearing from the register to be vested in another person. Section 38 makes a registered trade mark assignable and transmissible, whether with or without the goodwill of the business concerned, and in respect either of all the goods or services for which it is registered or of only some of them. Section 39 makes an unregistered trade mark assignable and transmissible with or without the goodwill of the business.
On the transfers the Act will not permit, section 40 provides that a trade mark is not assignable or transmissible where the result would be that more than one person would have exclusive rights to the use of nearly resembling or identical marks in relation to the same or similar goods or services, or to associated goods or services, where that use would be likely to deceive or cause confusion; with a proviso saving an assignment where, because of limitations on the rights, they are not exercisable by two or more persons in the relevant markets. Section 40(2) allows a proprietor who proposes to assign to submit a statement of case to the Registrar, who may issue a certificate as to whether the proposed assignment would be invalid; that certificate is conclusive unless obtained by fraud or misrepresentation and is subject to appeal, and a certificate in favour of validity is conclusive only if the person in whose favour the assignment is made applies under section 45 within six months of its issue. Section 41 applies the same approach where the exclusive rights would be limited to different parts of India, permitting the Registrar to approve the transfer where it is not contrary to the public interest, again with a six month link to the section 45 application. Section 43 provides that a certification trade mark is not assignable or transmissible without the consent of the Registrar, applied for in writing in the prescribed manner. Section 44 provides that associated trade marks are assignable and transmissible only as a whole and not separately, while being treated as separately registered for all other purposes.
On an assignment made apart from the goodwill of the business, which is the provision this page is built around, section 42 provides that where a trade mark, whether registered or unregistered, is assigned otherwise than in connection with the goodwill of the business in which it has been or is used, the assignment shall not take effect unless the assignee applies to the Registrar for directions with respect to the advertisement of the assignment not later than the expiration of six months from the date on which the assignment is made, or within such extended period as the Registrar may allow, not exceeding three months in the aggregate, and advertises the assignment in the form and manner and within the period the Registrar directs. The Explanation provides that an assignment is not deemed to be one made otherwise than in connection with the goodwill where it is (a) an assignment of a trade mark in respect of only some of the goods or services for which it is registered, accompanied by the transfer of the goodwill of the business concerned in those goods or services only, or (b) an assignment of a trade mark in respect of goods to be exported from India, or services for use outside India, accompanied by the transfer of the goodwill of the export business only.
On putting the transfer on the record, section 45(1) requires a person who becomes entitled by assignment or transmission to a registered trade mark to apply in the prescribed manner to the Registrar to register his title, and the Registrar, on proof of title to his satisfaction, registers him as proprietor in respect of the goods or services concerned and enters particulars of the assignment or transmission in the register; with a proviso that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register it until the rights of the parties have been determined by a competent court. Section 45(2) provides that a document or instrument in respect of which no entry has been made in the register under sub-section (1) shall not be admitted in evidence by the Registrar or any court in proof of title to a trade mark by assignment or transmission unless the Registrar or the court otherwise directs, except in the case of an application under sub-section (1) or an appeal from an order on it, and an application under section 57 or an appeal from an order on it.
On one piece of stale wording the reader will meet, widely circulating copies of section 45(2) name the Appellate Board among the bodies that may otherwise direct. That Board no longer exists, its functions having been moved in 2021, and the point is dealt with at length on our trademark registration page rather than repeated here. It is flagged because a reader checking this section against an older copy will find a body that cannot now be approached.
Three figures are missing from this page by choice, and the reasons differ. There is no Registry charge here, no duty figure and no form number. The Registry charge lives in a schedule to the Rules that gets amended; duty on an instrument of assignment answers to State legislation and shifts with where the deed is executed; and the tidy national numbers one finds online trace back to filing companies publishing their own rates. Each is settled for the transaction in hand and shown with its source beside it.
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