[E-trademarks] Assignment question

[Pamela Chestek]

You seem to be focusing on the recordation and the visibility of the 
assignment when that's not your problem. From your description, there 
has been an actual assignment of an ITU which you believe may be 
invalid. Full stop, it doesn't matter whether it's recorded or not, the 
assignment, whether or not recorded, may mean that the assignment of the 
ITU is invalid under Section 10. If this mark gets challenged, the 
assignment will come out in discovery even if it's not recorded. I don't 
think this is a problem you can ignore because once it's discovered, and 
it will be, it's a fatal problem.

Not recording also just gets you into different hot water. Since the new 
owner's name won't be in the record, it means that any documents signed 
will be signed in the name of the assignor, and the documents will be 
invalid since they were signed by someone who doesn't own the mark. You 
can sign in the assignee name without recording the assignment by 
providing the assignment as evidence of the new owner, but then it's 
still part of the file wrapper.

Before assuming you have a problem though, make sure that the assignment 
doesn't satisfy the exception found in the last sentence of Section 5, 
which is "except for an assignment to a successor to the business of the 
applicant, or portion thereof, to which the mark pertains, if that 
business is ongoing and existing." Having two trademarks assigned 
suggests that it may be more than just a bare assignment of the mark 
versus a transfer of the business.

If the mark remains owned by the assignor until after use is perfected, 
the theory is that the future assignee is a related company whose use 
inures to the benefit of the licensor. That makes me fairly 
uncomfortable though, because I suspect in most cases like this it 
wouldn't be too hard to prove that the assignor had nothing to do with 
the client's product, i.e., that your client does not meet the 
definition of a related company in Section 5 that it is "controlled by 
the registrant or applicant for registration of the mark with respect to 
the nature and quality of the goods or services."

If you can't assure the cooperation of the assignor, and particularly 
since you're saying it still might be years before there is use (at 
which point the ITU might have termed out anyway), and given the risk of 
assuming that your client would be considered a "related company" when 
it did begin using the mark, I would just file a new trademark 
application, unless the priority date is particularly valuable. You can 
still pursue this one (for example, if you want it away from the 
assignor so they don't continue to try to claim rights), but appreciate 
that it may be invalid so you shouldn't rely on it. Recording it as-is, 
but also filing a new application, is probably the easiest and safest 
solution.

Pam

Pamela S. Chestek
Chestek Legal
300 Fayetteville St.
Unit 2492
Raleigh, NC 27602
+1 919-800-8033
pamela at chesteklegal.com
www.chesteklegal.com



On 3/19/2024 6:19 AM, Tom J via E-trademarks wrote:
> Hypothetical scenario is this.  An assignment document is prepared and 
> signed with one 44e registration and one ITU application.  As we know, 
> one cannot assign an itu application before there's use in commerce 
> established.  What if the document is recorded against just the 
> registration? The concern is its still public info at that point,  and 
> a third party could still find the assignment document to challenge 
> the validity of the application even if the document isn’t recorded 
> against the application. Best way to proceed? Simply redacting the 
> application information before recording against the registration 
> doesn't seem like a good option. Waiting until there's use doesn't 
> seem like a good option since that might be years away and since the 
> use date would still be after the assignment execution date.  Execute 
> a new document with just the registration? (But there is already one 
> signed by the parties.) Any thoughts are appreciated.  Any cases that 
> address this unusual hypothetical scenario?
>