Trademark Acquisition Agreement

by Stephanie Dube Dwilson
You can license the right to use someone's trademark without having to purchase it permanently.

You can license the right to use someone's trademark without having to purchase it permanently.

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A trademark acquisition occurs when the owner of a trademark grants either permanent ownership or temporary licensing rights to a person or company desiring to use the trademark. The agreement allows a party to not only use the trademark but also benefit from the reputation a business created through its trademark. This agreement should be executed with the help of an attorney to ensure that it complies with U.S. law.

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Defining a Trademark

A trademark is a distinguishing symbol, word or phrase that represents a good or service. If a competitor uses a confusingly similar mark for the same type of good or service, he may be guilty of infringement. A trademark that's used in commerce but isn't registered still receives common law protection in the area of its use. Common law protection includes the ability to prevent others in your region from using your mark by suing for infringement. Officially registering your trademark in your state provides better protection because it puts everyone on notice that you own the mark. If you use your trademark nationally, you can register it with the U.S. Patent and Trademark Office. This provides nationwide protection instead of just regional. Federal registration also lists your trademark in the USPTO database and allows you to sue for infringement in federal court instead of state court.

Goodwill Requirement

The United States is unique from many other countries in that it requires a transfer of trademark ownership to also include a transfer of the goodwill that accompanies the trademark. Goodwill is the reputation for quality and service that has developed in conjunction with that particular trademark. This requirement is specified in Section 10 of the Lanham Act, a law enacted by Congress in 1946 that created the U.S. trademark system we use today. The Lanham Act requires that a company's goodwill and reputation transfer with a change in trademark ownership so that a company can't buy the rights to a trademark and then use it with a completely different product, confusing consumers.

Licensing a Trademark

One type of trademark acquisition involves an agreement to license the trademark. In this situation, the owner maintains ownership of the trademark but grants a second party the right to use the trademark, usually in exchange for royalties. The agreement stipulates exactly what marks are covered, how the new party can use the marks, whether the license is exclusive and what rights the owner maintains. A licensing agreement also includes how long the acquiring party has the right to use the trademark and in what geographic region the trademark can be used. The owner typically maintains quality control over the trademark's use to ensure that his rights to the trademark and business reputation aren't lost.

Selling or Transferring a Trademark

Another type of trademark acquisition agreement involves a business transferring all its rights to a trademark to another party. This transfer can be part of the sale of the entire business or just a separate sale on its own. The agreement includes the transfer of a trademark registration, common law rights and any related state or international registrations. Signing and paying for these rights doesn't complete the transfer -- the purchaser must also file a Verified Statement of Use with the USPTO, confirming intent to use the trademark in commerce. The purchaser must also record the acquisition with the Commissioner of Patents and Trademarks within three months of signing the contract. Otherwise, the purchaser will lose his rights to the mark.