How to Reduce the Risk of Engaging in an Illegal Trademark Assignment
Owning a trademark is widely viewed as one of the most valuable and important assets for any business. Hence, it is so important not to be cavalier about engaging in a trademark assignment. When a business owner mishandles or violates the law while engaging in a trademark assignment, it could completely negate the enforceability of the trademark, thereby torpedoing its value.
When an illegal trademark assignment occurs, it is typically the product of carelessness and neglect, or it could very well be deemed an assignment-in-gross.
What is an Assignment-in-Gross?
An assignment-in-gross occurs when a business owner assigns their trademark without including the underlying goodwill (i.e. the inherent value and name recognition associated with the mark) and any other accompanying assets. When a business owner commits an assignment-in-gross, the ramifications are severe since a court could invalidate the assignment and would result in the trademark being deemed abandoned. As a result, both parties (i.e. the owner of the mark and party attempting to secure the mark) will lose any rights to the trademark.
To prevent such circumstances, an assignment must include (i) other related business assets and (ii) must be completed with genuine goodwill.
Assets that are deemed eligible to accompany a trademark assignment include:
- Company shares;
- Trade secrets; and/or
- Management or other financial assets
Analyzing whether a trademark assignment was completed with genuine goodwill can be extremely difficult to measure. Courts tackle this issue by using the “substantial similarity” test. This test assesses both the quality and description of the goods and/or services prior to, and after, the transfer of the trademark.
When a business owner attempts to simply assign their trademark without any accompanying business assets or without sufficient evidence of genuine goodwill, it is a violation of federal law since a trademark, in and of itself, does not possess actual value. When a trademark transfer occurs without meeting the two-part standard described above, it is an illegal trademark transfer under the Lanham Trademark Act, which is codified under 15 U.S.C. § 1060.
Take Action by Contacting an Experienced Trademark Attorney in Los Angeles Today
It is incredibly important to protect your brand identity; hence it is in your best interest to invest the time and resources to secure a trademark registered with the United States Patent and Trademark Office. Once registered, it will provide you exclusive right to use the mark with specific goods or services. Furthermore, there is tremendous value in completing a trademark assignment the right way. In either instance, you should retain the services of an experienced and knowledgeable trademark attorney in Los Angeles such as the professionals at the Omni Legal Group. Omni Legal Group is a premier Patent, Trademark, and Copyright law firm located in Los Angeles. For further information or to schedule a consultation please contact Omni Legal Group at 855.433.2226 or visit www.OmniLegalGroup.com to learn more.