Alienation of the trademark in Russia

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What is trademark alienation?

A trademark or service mark is an object of intellectual property, the main function of which is to protect goods/services from counterfeiting and preserve the image of the company. The owner of a trademark may dispose of it at his own discretion, including selling it to the extent of exclusive rights.

Alienation of a trademark is the transfer of rights to use the registered designation to another legal entity or individual entrepreneur. The new owner acquires the exclusive right to possess the trademark that it acquired. This procedure is also called the assignment of a trademark for a certain monetary remuneration.

Peculiarities of the procedure for alienation of a trademark

Reasons for the alienation of TK

Alienation of exclusive rights to a trademark is a fairly common practice of commodity-money relations. A person who has an exclusive right to a trademark may at any time carry out its alienation, independently choose a buyer, designate the conditions of the contract and determine the value of the exclusive rights transferred.

Reasons and prerequisites, which are the grounds for the transfer of a trademark:

  1. liquidation of the right holder with preservation of the trademark for related organizations;
  2. Rebranding of the company, in which new trademarks are registered, and the previously used designations do not correspond to the new corporate style;
  3. cessation of manufacture and sale of products, for which the trademark was registered;
  4. desire to receive remuneration for a unique and recognizable designation - the assignment of rights or their transfer under license should have a compensatory character;
  5. non-use of a trademark after registration - if the period of non-use is more than 3 years, the company may lose exclusive rights without payment of remuneration, so it is advisable to find a buyer in advance. For example, you have registered a trademark for the production of confectionery products, but then in the course of doing business you decided to engage in the production of juices. At the same time, another company wants to make confectionery products under your trademark. This company will be able to sell the goods if you enter into a trademark assignment agreement with it).

If you can get more money from the sale of the designation than from its use, in this case it will also be relevant to conclude an agreement on the alienation of the rights to the trademark.

Differences between the registration of a new trademark and the transfer of exclusive rights

The purchaser of the exclusive right to the designation is much more profitable from the material point of view and in terms of time to conclude an alienation agreement for the trademark rather than to register a new designation in Rospatent. Alienation of a trademark involves the transfer of the right within 2 months, while the application and registration of a new designation takes at least 8 months. Besides, in case of confusing similarity with an existing registered designation, the new designation will not be registered in the absence of exclusive rights to the old one.

What are the features and provisions of the agreement on the alienation of TK?

A trademark is an object of intellectual property, so it is impossible to formalize its purchase and sale by the usual agreement with the same name. The right holder of a trademark may sell it under an agreement on alienation of rights to a trademark.

Alienation of a trademark takes place on the basis of an agreement concluded between the right holder and the acquirer. The agreement shall stipulate that the trademark right is fully transferred to the buyer, otherwise no alienation shall take place and the agreement shall be deemed licensed (clause 3 of Article 1233 of the Civil Code of the Russian Federation).

The right to a trade mark may be assigned both for all goods for individualization of which it is registered and for individual goods (or groups of goods) (clause 1, article 1488 of the Civil Code of the Russian Federation).

There are a number of formal requirements for the execution of the contract:

The Civil Code outlines the conditions under which the alienation of a trademark is not allowed:

The right to the object of intellectual property is transferred to another person immediately at the moment of state registration of the agreement.

Why it is important to first check the object of alienation and the authority of the right holder?

A trademark as a means of individualization and an object of intellectual property may be encumbered by a pledge or arrest. In order to prevent adverse effects after the registration of the agreement, the acquirer of the exclusive right, in his own interests, should check the existence of encumbrances and the powers of the persons who will conclude the transaction.

The pledge of an exclusive right to a trademark is a fairly common case. Such an encumbrance can limit or eliminate the possibility of using the acquired right to the designation.

In practice, there are often cases where the agreement is signed by a person who is limited in his powers and cannot unilaterally decide on the transfer of the right to the mark. For example, a company is in bankruptcy and the consent of the trustee in bankruptcy is necessary for the alienation of the trademark. Another fairly common option - the alienation is a big deal for the rights holder, requiring the consent of the founder, as a result in the future the rights holder may through the courts to invalidate the contract.

If this condition is not met, and even if the agreement has been registered with the agency, it may be challenged in court by interested parties whose rights are violated by this agreement.

It is to prevent the development of such events you can contact the Patent Office "Pervoistok", which will check the object of the transaction for encumbrances, as well as the credentials of the persons signing it.

Obligations and rights of both parties when disposing of the TM

The procedure for alienation of a trademark is regulated by Article 1488 of the Civil Code of the Russian Federation. The terms and conditions of exclusive rights transfer are fixed in a written agreement.

The procedure for its execution is regulated by Article 1234 of the Civil Code of the Russian Federation.

Under the contract of alienation, the original right holder transfers or is obliged to transfer the exclusive right to the trademark in full. The option of transferring the exclusive right to a trademark in respect of certain classes of the Nice Classes is possible. In the document the parties must reflect:

Among the conditions, the parties must specify the amount of remuneration and the term of its payment. The parties to the contract may choose one of the forms of payment: lump sum payment, installment payment. The parties must reflect the agreed option in the text of the document.

State registration of the contract is a prerequisite for its validity, otherwise the transfer of rights will not take place.

When alienating the trademark the parties must draw up an application to FIPS and pay the state duty for its consideration (13500 rub., p. 3.12 of Appendix 1 of the Regulations "On Patent and Other Duties"; if filing electronically - 9450 rub.). The participants of the agreement have the right to agree on the distribution of costs among themselves.

A trademark is an asset of a company. The owner must reflect the alienation and the buyer must reflect the acquisition of an exclusive right in the accounting and tax reports.

The rights of the acquirer of the exclusive right that arise after the contract is duly executed:

What is necessary to register a contract of alienation of a trademark in Rospatent?

Before acquiring the rights to a trademark, one should make sure that there are no encumbrances on the object of intellectual property and that the person who signs the deal is authorized. The "Pervoistok" Patent Office can help to avoid unexpected situations during the registration of the contract of alienation.

How the registration procedure works?

First, the applicant will need to collect the following package of documents:

Then submit the application to Rospatent, as well as one of the two or three documents (at the choice of the parties):

If the application is signed by both parties to the contract, no additional documents may be attached.

State fees are paid by either party to the contract and a document of payment is necessarily attached. Both parties to the transaction or only the acquirer may apply to the registration authority. After checking the application and other documents, the updated data on the right holder will be entered in the register of trademarks. The buyer will receive a certificate which will confirm that he has exclusive rights to the designation.

Unlike the alienation agreement, the transfer of the trademark under the licensing agreement means only a temporary transfer of rights without restrictions from the right holder. In this case the right holder may grant an exclusive license to only one subject or several agreements may be concluded at once. Licensing agreements are also registered with the FIPS, and the terms of the transaction may include a clause on the territory of lawful use of the trademark.

The exclusive right can be transferred in full or in part, i.e., for certain registered classes of the Nice Classification. In this case the right holder retains the right to use the trademark to mark those classes which were not transferred under the agreement.

Reasons for refusal to register the contract

Legislation does not define an exhaustive list of reasons for refusing to register an agreement. The most common of them can be highlighted:

If the registration of the alienation of the right is refused, the state fee is not refundable.

In which cases the agreement on assignment of the right to trademark may be misleading?

The issues concerning the agreement on the alienation of the exclusive right to a trademark are covered in Article 1488 of the Civil Code of the Russian Federation. The second paragraph states that it is inadmissible to alienate the right to a trademark under a contract if, as a result, the consumer may be misled about the manufacturer or the goods themselves.

This can happen if the trademark:

If it is not possible to conclude a contract of alienation, it makes sense to consider a licensing agreement for the right to use the trademark.


Can the application be transferred to another person if the mark has not yet been received?

You can transfer an application for a trademark if it is not already received. The procedure for transfer of an application for a designation is similar to the procedure for alienation of a given designation. It is necessary to submit to FIPS a corresponding application, draw up a contract of alienation, as well as pay the state duty and enclose a receipt for its payment.

The full set of documents can be submitted to Rospatent, sent by mail, if the registration process is conducted through the electronic cabinet of Rospatent, the set is sent through it with duplication of the original by mail.


Sale of a trademark or alienation of a trademark - is there a difference?

From a legal point of view, this is the same procedure, since the right to TK is transferred to another legal entity or individual entrepreneur.


How long does the process of transferring the exclusive right to a trademark take?

Order of the Ministry of Economic Development of Russia № 704 sets the maximum term, which is 68 working days. In practice it takes 40-45 working days to transfer the right. However, this term can be extended indefinitely if additional materials are required.

Issuance of documents and sending by the Office takes place no later than 5 working days after information is entered into the State Register. Consequently, information on the transfer of the right is published earlier than the person receives the relevant documents.


What are the differences between the alienation of rights and the license?

When alienating the right, the right holder transfers all rights to the acquirer on mutually beneficial terms. An exclusive license gives the acquirer the right to use the trademark, but reserves the right to use the designation.

A non-exclusive license grants the purchaser the right to use the mark, while the right holder retains not only the right to further use the mark, but also grants the right to license it to other entrepreneurs.

There is also the concept of sublicense - the right holder has concluded a license agreement with the acquirer, according to which the latter can conclude agreements with other parties. This agreement is called a sub-license.


Can an individual be a party to a foreclosure agreement?

No, because according to the legislation of the Russian Federation only legal entities and individual entrepreneurs can be right holders of a trademark. Such restriction does not apply to foreign individuals who can apply through patent attorneys.


I have not received the documents, how do I know if there was a foreclosure or not?

The State Register shows the fact of transfer of the right to trademark. This registry is open, so you can independently track the proceedings by the number which is assigned by the Office after receiving the documents. The registry, among other things, displays all the requests sent to the mailing address of your mark.

If the alienation of the right has taken place, the relevant entry is indicated in the registry with the indication of the party which acquired the right. After that, within 7-14 days, Rospatent sends an extract from the register to the party by registered mail, which confirms the entry of information.


Is it possible to alienate a trademark and a patent with one agreement?

Yes, it is possible, but you need to attach to the contract of alienation separate applications for a trademark and patent and pay the state fees.


Is it possible not to register the contract or transfer the alienation of rights without compensation?

No, because according to the law a contract that has not been registered with FIPS is invalid. Gratuitous alienation of the right is inadmissible. The contract of alienation must necessarily have a value, the amount of which can be as minimal as possible.


Denial of registration, on the grounds that the data in the Unified State Register of Legal Entities and Rospatent are different, what can be done?

In order to avoid such a situation, it is necessary to make timely amendments to the FIPS trademark register and to the designation certificate. The Office will send you a corresponding request and will give you an additional period of time to make these changes.

Introduction of amendments is a separate procedure and will go in parallel with the registration of the alienation agreement. In order not to prolong the alienation proceedings, it is necessary to submit an application for amendment within the shortest possible period of time, and after the amendment, to respond to Rospatent's request and attach information about the amendments and then continue the proceedings. Usually, no later than 2 months the decision will be officially published.

Competent execution of documents is very important when executing a contract of alienation, as FIPS experts carefully check all materials and applications. There are many circumstances which may lead to a refusal of registration, and the costs of the state duty are not refundable. For example, if the right holder has a large number of similar trademarks for the same classes of the Nice Classification, all marks must be alienated, otherwise this could mislead the consumer.


What is the cost of registration of the contract of alienation for foreign companies?

The cost of registration is determined by the company itself. Development and registration of the agreement on disposal of an exclusive right (license, commercial concession, alienation) in "Pervoistok" Patent Bureau costs 16000 rubles.

The state fees must be paid separately for the license agreement and the contract of alienation - 13500 rubles, for the contract of commercial concession - 15500 rubles. If documents are sent electronically via Rospatent's website, they must be certified by a qualified electronic signature. In this case there is a 30% discount for payment of state fees.

To conclude a contract between a resident and a foreign company that is not a resident of Russia, the participation of a national patent attorney is required.


After the registration of the contract, what do I get as a transferee?

With the successful registration of the agreement, the transferee receives the full range of rights to the intellectual property object, namely to use it at his discretion, to enter into a contract of alienation or license agreement, to pledge or inherit it. Competently executed registered contract fully guarantees these rights.

The document confirming the fact of the exclusive right transfer is mandatory in court to resolve disputes and for tax reporting.

Rospatent sends an attachment to the designation certificate to the transferee (transferee), and he can check all the information in the FIPS public registry.


If the parties decided to come to an agreement when opposing confusingly similar trademarks, it is better to conclude a contract of alienation or a letter of consent?

The opinion of Rospatent's expert on the letter of consent is always purely subjective, while in case of alienation such reasons are excluded by the full transfer of the right. Consequently, the consent letter is a less favorable option than the alienation of the right.

A subjective understanding of paragraph 3 of Article 1483 of the Civil Code may lead to the refusal of registration, as the examiner may decide that the registration of a similar designation on different right holders may lead to misleading the consumer.

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