If you own intellectual property like a trademark, whether it is unused, surplus, or any other type of trademark, there are situations where you may wish to sell that trademark. In order to do so, you will need to use a trademark assignment agreement.
Trademarks are not physical, and while they do not take up office space, trademarks are assets that can help to grow your company or free up revenue when downsizing.
By using a trademark assignment agreement, you can transfer the property rights in a mark or multiple marks. You can do this on its own by selling only one type of trademark, or you can do it as part of a larger sale of multiple assets, something that typically occurs during mergers-and-acquisitions. Trademark assignment agreements provide a record of ownership and function similar to a digital version of a bill of sale. These agreements protect all parties involved including the business selling the trademark and the business buying the trademark.
There are essential items that need to be included as part of this sale to address ownership and liability and have a clear record of the transaction.
When you create a trademark assignment agreement, there are specific sections that you need to include. Sections should be listed and numbered in order (Section 1, Section 2, etc).
In the introduction, you will introduce the document, its purpose, and the people who are involved in the transaction. You will likely see this opening paragraph in any type of bill of sale for physical property and intellectual property. Here is where you should directly list that the document in question is a trademark assignment. Then, write in the date when the document was signed. All parties and the businesses they represent should be listed and they should be given names that you will use to refer to each party throughout the rest of the document.
For example: If John Johnson and Mark Markson are the parties in this agreement, you do not want to have to continually refer to them by their full name or the business they represent. Instead, you could refer to John Johnson “Hereafter referred to as the Assignor” and Mark Markson “Hereafter referred to as the Assignee”. Throughout the remainder of the document, you can use the terms Assignor and Assignee instead of their names.
The next section is called the recitals. You have probably read legal documents that begin with the phrase “whereas”, this is called the recital. It is in this section where you recite key background information necessary for the legality of the document. This section can include a simple statement that this document serves as an intent to transfer trademark rights.
In this assignment of marks, you will list the trademarks that are being sold. You can refer to schedule 1 for the expected wording of the section so you do not have to include pictures and other documentation, but you should include a description of exactly what is being transferred.
The consideration section is where you state the requirements of each party. In any agreement, each party is expected to fulfill certain responsibilities. In a trademark assignment agreement, one party is expected to transfer ownership of a trademark in exchange for the payment from the other party.
Section 3: Assignor’s Representations and Warranties
In this section, you will state that the Assignor is the owner, that they have not transferred the trademark(s) to anyone else, that they have not used the trademark without authorization, and that they have permission to sell trademark.
In this section, you will state that the Assignee swears that they are buying the trademark for a specific amount of time and that they have enough money to do so.
Section 5 will prevent the person purchasing the trademark (the Assignee) from using it as collateral or transferring it to someone else until such time as they have paid for it in full.
You can include a section where the Assignor promises to help with any paperwork to transfer the title or federally register, but this is not a requirement. If you choose to include this information, include it as part of the Documentation section.
In Section 7, you will specifically indicate that as of the date of the signed agreement the Assignor will no longer use the trademark and will not prohibit or challenge the use of the trademark by the Assignee.
In Section 8, you will explain the obligations of each party. There are your two options of information to include in this section. For instance, you can decide that the Assignor must complete responsibility for infringement and that they will pay for any expenses or costs if an infringement claim is brought to court. You can also decide that the Assignor has conditional responsibilities in the event that an infringement claim is brought to court.
This section states to whom the mark will be given in the event of a business closing, one of the parties dying, mergers and acquisitions, and all other situations. This section should also state the conditions whereby someone other than the Assignor or Assignee can succeed the parties involved in the original agreement and obtain the trademark.
Section 10 should stipulate that if one party knowingly allows the other to break one part of their obligation, that does not mean that that same party can break any and all obligations in the future. As a simple analogy, think of the no implied waiver like a parent who sees their child breaking one rule and does not punish them, but does not allow them to continually break rules just because they did not punish them for this one rule break.
The notice section should list any addresses for all the parties involved. All official and legal correspondence will be delivered to these addresses, including any notices regarding this agreement.
Section 12 is where you stipulate which state law is used to interpret your agreement. If both businesses or both parties are in the same state, the state is the state in which both parties are located. If both parties are not located in the same state, you must agree to the state whose laws you will use in the event that there is a potential claim brought against this agreement.
In Section 13, you should state that if your parties are located in different places they are allowed to sign the agreement electronically rather than in person. This practice is common where one party signs their section of the agreement and then sends it electronically to the other party to sign. If you choose to do this, you might elect to include separate sections for notarization for each party so that both parties must have the agreement notarized and sign it in front of a notary public. After they have had the document notarized, they can then scan a copy and send it electronically to the other party.
Severability refers to the conditions under which the agreement can be severed or terminated. In this section, you can include language that specifically targets changing state laws so that if your state passes a law in the future that prohibits this type of clause or prohibits some aspect of your agreement, it will not invalidate this precise trademark assignment agreement.
Section 15 is the final section before you and all involved parties give your last signature at the very end of the document. The wording of Section 15 should stipulate that all parties agree that they are signing the entire agreement. It should be noted that just because you do have this signature, it does not mean that someone may not try to make a claim about the trademark in the future, but it’s a good place to start.
In schedule 1, you must thoroughly describe the trademark. You can easily attach drawings or samples here, or include photos, as long as you include language such as “see attached photo”.
With our free trademark assignment template, you can download a template that contains the majority of information you need to include in your agreement. If you are unsure of what sections must be included, or the most important areas not to overlook, a trademark agreement template is the perfect tool.
A trademark assignment agreement template PDF is much better for virtual exchanges. When you are exchanging an electronic document, almost every individual involved in the document will have the ability to change the wording directly in the text, which could change the agreement. But with a PDF, you can set it up so that it’s completely secure and the only areas that can be edited after the document is locked are spaces for people to check boxes or type out a name.
Link to download will appear there soon
A trademark assignment agreement does need to be notarized. While there are some states where you might not need to have the agreement notarized, it is still recommended that you do it anyway because notarization limits any challenges associated with the validity of the transfer or the signatures from each party.
If you do not create a trademark assignment agreement, you will not have any record of who owns the mark. Trademarks serve as a highly valuable asset, especially for larger companies, and you must treat them the same way you would a physical asset that you hold in your hand. Given their values, you must have an agreement on paper.
Assignors who do not have a trademark assignment agreement:
Assignees who do not have a trademark assignment agreement:
There are many common situations where a trademark assignment agreement is necessary. Some of these situation include: