Selling a Trademark

A person obtains a trademark when:

1) the mark is capable of being trademarked

2) the person is the first to use the mark in any market on a good or service.

A person maintains a trademark by continuous use.

What is there to Sell?

A person does not have to register a trademark in order for the trademark to be valid. However, there are great benefits to registering a trademark. A registered trademark gives the owner the presumption that the trademark is valid and is owned by the one who registered the mark. It is harder to make a successful claim of trademark infringement against a person with a registered trademark than it is against a person who has not registered his or her trademark.

A registered trademark will also be more valuable than an unregistered trademark when the mark is sold. The holder of a trademark may sell his or her interest in that mark to another. Or the holder may grant permission to use the mark to another. The holder of a registered trademark will probably be able to obtain a higher price than the he or she would if the same mark were unregistered. This is because the buyer of an interest in or use of a trademark will want to ensure that he or she is not going to be sued by another for trademark infringement after the purchase when using this mark.

While no one can ensure that a claim for trademark infringement will never be made, a person can register a trademark and therefore create a presumption that the trademark is valid and the owner of the trademark registered has exclusive rights to use of the mark and to assign an interest in the mark or grant permission to use the mark to another. This is very valuable in a sale of an interest in or use of a trademark.

Selling, or Assigning, a Trademark

A person who sells his or her interest in a trademark to another person is called an “assignor.”

A person who purchases an interest in a trademark is called an “assignee.”

The sale of an interest in a trademark from one person to another is called an “assignment.”

When a trademark is assigned, the assignee actually becomes the new owner of the mark. Assignments must be written and not oral. A valid assignment includes the sale of the goodwill or reputation of the business that uses that trademark. The new owner of the trademark, the assignee, has the exclusive rights to the mark and the exclusive right to exclude others from using the mark.

Licensing Trademark Use

A person who gives permission to another to use a trademark is called a “licensor.”

A person who purchases permission to use a trademark is called a “licensee.”

The granting of permission to use a trademark to another is called a “license.”

If the license is exclusive, the licensee is the only person who may use the trademark. No one else may use that mark or a confusingly similar mark. A license may be written or oral. The licensor must retain adequate control over the quality of goods or services that the licensee sells under the mark and they must be substantially equal in nature and quality as the goods or services sold under the mark prior to the license.