ASSIGNMENT AND TRANSMISSIONCentral
Section 40 of The Trade Marks Act, 1999
- (1)Notwithstanding anything in sections 38 and 39, a trade mark shall not be assignable or transmissible in a case in which as a result of the assignment or transmission there would in the circumstances subsist, whether under this Act or any other law, exclusive rights in more than one of the persons concerned to the use, in relation to--
- (a)same goods or services;
- (b)same description of goods or services;
- (c)goods or services or description of goods or services which are associated with each other, of trade marks nearly resembling each other or of identical trade mark, if having regard to the similarity of the goods and services and to the similarity of the trade marks, the use of the trade marks in exercise of those rights would be likely to deceive or cause confusion: Provided that an assignment or transmission shall not be deemed to be invalid under this sub-section if the exclusive rights subsisting as a result thereof in the persons concerned respectively are, having regard to limitations imposed thereon, such as not to be exercisable by two or more of those persons in relation to goods to be sold, or otherwise traded in, within India otherwise than for export therefrom, or in relation to goods to be exported to the same market outside India or in relation to services for use at any place in India or any place outside India in relation to services available for acceptance in India.
- (2)The proprietor of a registered trade mark who proposes to assign it may submit to the Registrar in the prescribed manner a statement of case setting out the circumstances and the Registrar may issue to him a certificate stating whether, having regard to the similarity of the goods or services and of the trade marks referred to in the case, the proposed assignment would or would not be invalid under sub-section (1), and a certificate so issued shall, subject to appeal and unless it is shown that the certificate was obtained by fraud or misrepresentation, be conclusive as to the validity or invalidity under sub-section (1) of the assignment in so far as such validity or invalidity depends upon the facts set out in the case, but, as regards a certificate in favour of validity, only if application for the registration under section 45 of the title of the person becoming entitled is made within six months from the date on which the certificate is issued.
Summary
- The most important rule here prevents splitting a trademark to different people if it causes confusion.
- You cannot assign a trademark if multiple people would end up with exclusive rights to the same or similar goods.
- An exception exists if the rights are limited so people do not sell in the same areas, such as one person selling only for export.
- A trademark owner can ask the Registrar for a certificate confirming if a proposed assignment is valid.
- If the Registrar issues a certificate of validity, the new owner must apply to register their title within six months.
Practical examples
1Amit owns a shoe brand and wants to sell the rights for sneakers to Bimal and boots to Chitra. Since sneakers and boots are similar goods, this might confuse buyers, so it is blocked.
2Dinesh owns a tea brand and sells the export rights for the UK to Esha, while keeping the rights to sell within India for himself. This split is allowed because the markets are completely separate.
FAQ
1. Can I split my rights under Section 40 of The Trade Marks Act, 1999 to two different people for the exact same product?
No, Section 40 of the trademark law prevents assignments that create multiple exclusive rights for the same goods if it causes confusion.
2. Under Section 40 of the Act, how long do I have to register my title after the Registrar approves it?
You must apply for registration of the title within six months from the date the certificate is issued under Section 40 of The Trade Marks Act, 1999.
3. Does Section 40 of The Trade Marks Act, 1999 allow splitting a trademark if one person only exports the goods?
Yes, Section 40 of the 1999 Act allows this if the limitations mean two people are not selling the goods in the same market, like one selling only for export.
Test yourself
Q1.Under Section 40 of The Trade Marks Act, 1999, what is the main reason an assignment might be restricted?
Q2.According to Section 40 of The Trade Marks Act, 1999, how long is a certificate of validity from the Registrar good for registering a title?
Q3.Which scenario is allowed despite the general restriction in Section 40 of The Trade Marks Act, 1999?
Q4.Under Section 40 of The Trade Marks Act, 1999, what happens if someone obtains the Registrar's certificate through misrepresentation?