Buying Someone Else’s Trademark

The trademark registration process takes a lot of time, and registrants are expected to wait, even after paying all necessary fees and submitting the required documentation. However, if you need a registered trademark quickly and you cannot wait for a long, then you can buy someone else’s trademark. That is called a trademark assignment.

Trademark assignment is different from trademark licensing. The former is about buying an existing trademark, while the latter is giving another party the license to use a trademark for a period. When a trademark is assigned to another person, all the rights to the trademark are automatically transferred. In the United States, buying a trademark means the buyers are also buying the company’s products, assets, and goodwill.

Goodwill is an essential asset to any business or company. It is the reputation and competitive advantage that an industry has been able to gain since establishment. A trademark is only valuable when there are underlying business and goodwill. So a buyer must ensure that s/he is buying a trademark that is associated with an existing business and goodwill. Obtaining a trademark without the associated goodwill is called ‘naked’ assignment in the U.S. If the goodwill of a trademark is not transferred along with a trademark, such a trademark assignment is considered to be invalid. Based on this rule, a naked appointment is invalid, and buying such a trademark is a waste of money.

The only stance where a trademark can be sold and transferred separately without its associated goodwill is when a division of the company is sold. In this situation, the buyer must be sure that the incomplete/partial assignment will not affect the validity of the acquired trademark. Additionally, if a trademark in question has a link with other trademarks of the parent company, then all the trademarks have to be assigned.

Another that must be noted before or after buying the trademark of someone else is that the purchased trademark must be used for the products it was explicitly registered for. For instance, if it is recorded for soap products, the buyer must not use it for food products. If the trademark is used for entirely different products, it may invalidate the trademark, as it would mislead the public.

It is not recommended to buy a trademark that its owner has rebranded or stopped using. Even if the trademark is still active, the mark owner might have abandoned rights in it. That could eventually result in the cancellation of the trademark and make it worthless.

You could also save yourself from the stress associated with buying an existing trademark by consulting a trademark professional. A significant advantage of this is that you won’t waste your money on a worthless trademark.