Since the UK’s departure from the EU, there has been a significant rise in the number of trademark assignment recordals against UK registrations taking place as EU trademark owners are now required to manage these rights separately, says Trademark Paralegal Megan Taylor.
In order for transfers of ownership to be recorded, businesses must provide a copy of the relevant document assigning their ownership, to ensure that a valid transaction has taken place under the laws of England and Wales. It is important to ensure the transfer is a valid transaction as the mark could be the basis of, or subject to, future disputes where questions around its validity could be raised and result in a possible loss of costs.
What makes a transaction valid in the UK?
Despite s.24(3) of the Trade Marks Act 1994 (TMA) stating that a trademark assignment is considered effective if it is in writing and signed on, or behalf of, the assignor (or their representative), there are other laws relating to the transfer of property which must be considered; for example, statutes that pre-date the TMA. One such statute is the Law of Property (Miscellaneous Provisions) Act 1989 which sets out the requirements for a valid Deed for transfers of ownership between individuals. Similarly, the Companies Act 2006 provides guidance in relation to Deeds executed by a company.
It is also important to note that while EU member states can rely on their codified national laws for transferring property within the EU, the UK also incorporates Common Law into its judicial system. The relevant laws here being the Law of Contracts.
Deeds v Assignments
When ownership of a trademark registration is transferred as part of a larger transaction, a copy of the relevant extract of the larger agreement is sufficient to proceed with the recordal.
However, in other instances, there may be no formal transaction in place or a confirmatory document may be required to simplify or clarify the transfer of any IP right specifically. In these cases, a separate trademark assignment (or other IP assignment) document should be drafted for execution by the parties.
In the UK, there are two types of document that enable the transfer of ownership of property – a deed of assignment and an assignment agreement, the latter also being known as a contract. While both documents are typically in writing, contain a title to confirm the document type and express the intentions of both parties, one of the most distinguishable requirements for a deed is the execution. In addition to the document being signed by both parties, for a deed to be effective both signatures must also be fully witnessed owing to there being no consideration.
Alternatively, the relevant parties may have an assignment agreement drafted. The laws governing contracts in the UK derive from the courts and are therefore formed under Common Law. In order to be a valid contract, there must be four main elements: an offer, acceptance of that offer, an intention to create legal relations and consideration (in other words, what each party gains from the contract). When it comes to formalising this contract, it is vital that the consideration is contained in the document, even if the sum is £1. If this is not included, the document cannot be treated as a valid contract.
Change of name requirements
Furthermore, it should be noted that where a company number or legal status of a business has changed as the result of a change of name, the transaction should be recorded as an assignment and not a change of name. This is due to the fact that the entity that owns the mark has changed and is no longer the same entity as the prior owner. However, there is no need to evidence this change with a Deed or Agreement to record this at the UKIPO, as a commercial extract will suffice.
Key points to consider
When reviewing ownership portfolios or selling IP post-Brexit, it is important to consider the following:
- Is there consideration? Determine whether you are transferring the property as a Deed or under an Agreement – different document types may be more beneficial depending on the circumstances of the transaction.
- Seek advice before executing. Our local associates can confirm whether the document is compliant with national laws. With our reach, we may also be able to provide a suitable single document to cover multiple jurisdictions, saving you and/or your client(s) a huge amount of associated costs.
- If unsure, just ask. We are at your disposal and happy to help facilitate easy execution, provide legal certainty, and save time in the long run.
- Take caution with local legal wording. Even if something is titled a ‘Deed’, it is not always the case.
- Be careful not to exclude crucial details. For example, something seemingly insignificant missing from an assignment document can render the whole agreement invalid. In the UK, even the phrase “In consideration of £1 (one Pound Sterling) the receipt of which is hereby acknowledged”, or a “peppercorn” as it is nicknamed, as a metaphor for a very small cash payment or other nominal consideration, used to satisfy the requirements for the creation of a legal contract.
Get in touch with our UK Trademark experts for further advice on how to manage trademark assignments post-Brexit.
Megan Taylor is a Trademark Paralegal and Luke Portnow is a Trademark Attorney at Novagraaf in the UK.