Introduction and recap

In our previous trademark series, we extensively discussed the assignment and transmission of trademarks. In this episode, we discuss the document necessary for the formalization of such transfer of trademarks.

A deed of assignment, also known as an assignment agreement, is the legal document through which the registered owner of a Trademark in Kenya transfers the rights, title, and interest in the trademark to a third party. Trademarks, which include logos, brand names, slogans, and distinctive symbols, are critical assets for businesses as they help identify and differentiate goods or services in the marketplace. The deed formalizes the contractual arrangement, ensuring the rights associated with the trademark are effectively transferred to the new owner. This article outlines the key aspects of a Deed of Assignment, its legal requirements, and its implications under Kenyan law.

A deed of assignment is applicable in either of the following scenarios: where the assignment is absolute or where the goodwill of the business is being assigned.

Legal Requirements for a Deed of Assignment of Trademarks in Kenya

For a Deed of Assignment of trademarks to be valid and legally enforceable in Kenya, it must meet several key legal criteria:

1. Written: – A Deed of Assignment must be in writing. Verbal agreements are not sufficient to transfer trademark rights in Kenya. This ensures clarity and provides documented evidence that can be used in case of any disputes between the parties.
2. Clear Identification of the Trademark: – The trademarks being assigned must be clearly and unambiguously identified within the deed. This includes a precise description of the trademarks, whether it be logos, slogans, designs, or other brand identifiers, as well as any goodwill associated with the mark. Providing detailed descriptions helps avoid confusion or ambiguity about what is being transferred.
3. Consideration: – The deed must state the consideration, or payment, involved in the transfer of ownership. While monetary payment is common, other forms of consideration, such as services or goods, are acceptable as long as they are clearly outlined. In some cases, the deed may specify that the assignment is made without consideration, but this must be explicitly stated.
4. Consent and Signatures: – Both the assignor and the assignee must willingly agree to the terms of the assignment, and their consent must be evidenced by their signatures. This mutual agreement is crucial in ensuring that the assignment is legally binding.
5. Registration with the Trademarks Office (KIPI): Once the Deed of Assignment has been executed, it is mandatory to register it with the Kenya Industrial Property Institute (KIPI). Without registration, the deed will not be enforceable, meaning the new owner cannot fully assert their rights against third parties. Registration serves as public notice of the change in ownership and is a key step in protecting the assignee’s interests.

Procedure for registration of a Deed of Assignment in Kenya

The following is the process for registration of a trademark assignment in Kenya.

1. The Deed of Assignment is drafted by the lawyers of the parties to the agreement, highlighting the terms of the assignment, and executed by both parties.
2. The deed of assignment is delivered for stamp duty, which is set at 2% of the Assignment value.
3. Form TM 14 is then executed and delivered with the original Deed of assignment for registration to the Registrar of Trademarks.

Legal Implications of a Deed of Assignment of Trademarks in Kenya

The execution of a Deed of Assignment of trademarks in Kenya has several important legal implications for both the assignor and the assignee.

1. Continuity of Rights

The assignee assumes all rights associated with the trademark upon execution of the deed. This includes the right to use the trademark in commerce, license it to third parties, or take legal action to protect it from infringers. The assignee essentially “steps into the shoes” of the assignor, inheriting full control of the trademark.

2. Obligations of the Assignor

The assignor, as the former owner, is often required to provide certain warranties or covenants.  The assignor will be the lawful owner of the trademark and has the full authority to assign it. The assignor may also agree not to use any confusingly similar marks that could compete with or undermine the assignee’s rights.

3. Protection Against Infringement

Once the assignment is complete, the assignee has the legal authority to enforce their trademark rights, including initiating infringement proceedings against unauthorized third-party use. This is particularly important in industries where brand reputation and intellectual property are key business assets.

4. Transfer of Goodwill

In many cases, a trademark is associated with the goodwill of a business, which is an intangible yet valuable asset. The Deed of Assignment may explicitly provide for the transfer of goodwill along with the trademark. This ensures that the assignee inherits not only the legal rights to the trademark but also the business reputation, customer relationships, and market recognition associated with it.

Conclusion

A Deed of Assignment of trademarks in Kenya is a document that facilitates the lawful transfer of trademark ownership from one entity to another. To be effective, the deed must meet the legal requirements outlined above, including being in writing, identifying the trademark, specifying consideration, obtaining consent, and being registered with KIPI. Both assignors and assignees should understand the legal implications of such a deed, particularly regarding the transfer of rights, protection against infringement, and goodwill. By adhering to these principles, parties can ensure a smooth and legally sound transfer of trademark rights.