Trademark Assignment vs Licensing in India: Complete Comparison (2026)
The Core Difference
| Factor | Assignment | Licensing |
|---|---|---|
| Ownership transfer | Yes — permanent | No — owner retains |
| Duration | Permanent | As per licence agreement |
| Revenue type | One-time sale consideration | Ongoing royalties |
| IP India form | Form TM-P | Form TM-U (Registered User) |
| Fee | ₹9,000 per mark | ₹4,500/₹9,000 per mark |
| Reversal possible? | No (without re-assignment) | Yes — licence can be terminated |
| Use cases | Business sale, M&A, restructuring | Franchise, distribution, licensing deals |
When to Use Assignment
- Selling your business (the trademark transfers with the business as an asset)
- Company restructuring — moving IP assets between group companies
- Merger and acquisition — buyer acquires the trademark as part of the deal
- Converting from sole proprietorship to company — assign TM from individual to company
- Settling a trademark dispute by agreeing to transfer ownership
When to Use Licensing
- Building a franchise network — each franchisee gets a licence to use the mark
- International distribution — a foreign distributor uses your mark in their market
- Co-branding partnerships — two brands collaborate with specific use permissions
- Manufacturing licensing — a contract manufacturer produces under your brand
- You want to retain ownership and earn royalties rather than sell the trademark
Quality Control: The Critical Clause in Licensing
- Under Indian trademark law, a 'naked licence' (no quality control) can result in the trademark losing distinctiveness and being cancelled
- The licence agreement MUST include: licensor's right to inspect, quality standards that must be maintained, approval process for use of the mark
- Failure to enforce quality control can give competitors grounds to cancel your trademark on the basis that it has ceased to function as a brand identifier
Frequently Asked Questions
What is the difference between trademark assignment and licensing?
Assignment permanently transfers trademark ownership. Licensing permits use while owner retains ownership. Assignment is like selling; licensing is like renting.
Which form is used for trademark assignment in India?
Form TM-P (Application for registration of a person as subsequent proprietor of a trademark) with a fee of ₹9,000 per trademark.
What is a Registered User in trademark law?
A Registered User is a licensee who is officially recorded with IP India under Form TM-U. Recording the licence with IP India makes it legally effective against third parties and gives the licensee standing to sue for infringement in some cases.
Can I assign only some classes of my trademark?
Yes — you can assign specific classes while retaining others. For example, if your trademark is registered in Class 3 and Class 35, you can assign Class 35 to a retail partner while retaining Class 3 for your product business.
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