goodwill is an intangible asset of the trademark. the goodwill is the basis which establishes the good reputation of a commodity or a service under a particular trademark.

1. Trademarks And Goodwill
NEERJA SACHI
INDIA
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3. Significance Of The Trademarks Goodwill
 When a trademark is related with the business then the reputation
associated with that trademark is known as its goodwill.
 The very basic use of the trademarks goodwill is establishing the reputation
of the products and the services under the trademark in the commercial
market.
 Trademarks establishes the goodwill between the source of the product or
service and the consumers.
 The goodwill of a trademark helps in the commercialisation of a trademark.
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4. Chapter - 1
Trademarks: A General View
• Development Of Trademarks Law In India:-
• The trademarks Act 1999 was been followed by a number of Acts like Marchendise
Mark Act 1889, Trademarks Act 1940 and Trade And Merchandise Mark Act 1958.
• Development Of Trademarks Law- International Aspect:-
• The development of trademarks law at the international level depends upon 3 major
conventions namely-
a) Paris Convention
b) Madrid Convention
c) TRIPS
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5. • Trademarks are basically divided in 4 kinds –
a) Collective Mark
b) Certification Mark
c) Service Mark
d) Trade Design
• Essentials of trademarks law –
a) Distinctiveness
b) Indication of the source.
• Object of the trademarks –
a) To protect the public from confusion and deception regarding identification of product.
b) To ensure the rights of the trademarks owners.
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6. Chapter - 2
Trademarks And Goodwill
• A goodwill is something about the trademarks which the customers remember in
their minds and which induces them to opt for the same product again and again in
the future.
• The trademarks under the trademarks Act 1999 has been defined as – “A mark
capable of being represented graphically and which is capable of distinguishing
the goods or services of one person from those of others and may include the shape
of goods, their packaging, and combination of colours.”
• Goodwill or the reputation of a business does not wholly depend upon the
availability of the product sometimes the goodwill of the trademark reaches a place
even before the product hits its market.
• According to Lord Macnaghten in the case, Trego Vs. Hunt (1869), the goodwill is
nothing more than the probabliity that the old customers will resort to the old place.
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7. • For protecting the goodwill of the trademark a person must –
a) Ensure that he had obtained the registration of the trademarks with USPTO,
b) Ensure that third parties are not using the trademarks which are deceptively similar.
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8. Chapter 3
Role Of Goodwill In Transfer Of The Trademarks
• The transfer of the trademarks may de done by 2 processes namely –
a) Assignment
b) Licencing
• Assignment- The provision related to assignment of the trademarks are contained
in the section 37 to 45 of the Trade Marks Act 1999.
• It is the act of interested parties through which every right associated with the
property of which ownership is transferring has been transferred to the other party.
• According to the Trade Marks Act 1999, a registered as well as the unregistered
trademark can be assigned to the other person whether with or without the goodwill
related to the business concerned.
• This can be done when the the owner of the trademark restricts the assignee to use
assigned trademarks for which he uses the product for.
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10. • Procedure for assignment of trademarks –
a) For the transfer of trademarks with the goodwill, the application must contains a
statement on the behalf of the assignor that all the rights vested in the trademarks
are completely transferred to the assignee.
b) If the transfer of the trademarks is done without the goodwill, the assignment
agreement must state that the assigner has reserved the rights in respect of such
trademarks and has not absolutey transferred the trademark. This means that both
the assignor and the assignee can use the trademarks but in different goods or the
services.
c) Assignee has to apply to the registrar for his direction for the publication of the
assignment within 6 months from the date of the assignment.
d) After publication the assignee will apply for registration of the assignment.
e) An affidavit for no legal proceeding pending against the trademark assigned from
the assignee shall also be required.
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11. (f) Territorial extent of the assignment must be clearly mentioned.
(g) The mark which the proprietor wants to assign must be clearly mentioned.
(h) Date of effect of the assignment must be mentioned.
(i) Whether the assignment deed is with goodwill or not must be mentioned.
(j) The consideration assignee needs to pay on the basis of which the stamp duty has to
be calculated must be mentioned.
• Licencing – Trademark licencing means the mode of transfer of rights when the
actual proprietary rights in the trademarks vests with the trademarks owner and
only a few stipulated rights to use the trademarks is given to the third party.
• Procedure for trademark licencing u/s 49 of the Trade Marks Act 1999 –
a) The agreement must be in writing entered into between registered
proprietor/licensor and the proposed user/licensee w.r.t permitted use of the
trademark.
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12. (b) An affidavit made by the registered proprietor/licensor giving following particulars-
• Of the relationship between the registered licensor and the proposed licencee.
• Of control by the licensor over permitted use by the licensee .
• Goods or the services for which the registration is proposed.
• About the restrictions imposed w.r.t. the registration.
• Time period of the permitted use.
(c) Power of attorney signed in the favour of agents.
(d) Further documents or the evidences as required.
(e) The licensee is registered w.r.t. to the goods and the services once the Registrar is
satisfied with the with the application.
(f) Recordal will be published within 2 months from the date of application.
(g) Registrar shall issue a notice of registration to the licensee.
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14. Chapter – 4
Deceptive Similarity And The Erosion Of Goodwill
• Deceptive similarity according to the section 2(1)(h) of the Trade Mark Act 1999,
may be defined as, a mark which so nearly resembles to the other mark as to be
likely to deceive or cause confusion to the customers.
• Test for deciding deceptive similarity –
Parle Products Pvt. Ltd. Vs. J.P. & Co. Mysore (1972)
In this case it was held that, test for determining the trademark to be deceptively
similar to the registered one if a person would accept another good which is deceptively
similar to the original good, instead of the original good.
• Factors to consider for testing deceptive similarity –
a) Nature of the mark.
b) Degree of similarity between 2 competing marks.
c) Nature of the goods in respect of which they are ar likely to be used as trademarks.
d) Similarity of the nature, purpose and character of the goods of the rival traders
e) Class of the purchaser and mode of purchase of the goods.
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15. • Durga Dutt Sharma Vs. Navratna Pharmacy Laboreatories (1965)
in this case, the court held that, the onus of proving the infringement of the trademarks
is on the plaintiff. The similarity between the marks may be phonetic or visual.
• The Coca – Cola Company Vs. Bisleri International Pvt. Ltd (2009)
• It was held that the exporting of exporting goods from a country is to be considered
as sale within the country from where the goods are exported and the same amounts
to infringement of the trademark.
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16. • Conclusion and suggestion-
• The goodwill is very important part of a business.
• It is almost impossible to separate the goodwill from its trademark.
• It is a kind of intangible asset of the trademark however under the provisions of the
Trade Marks Act 1999, sometimes it is possible to treat trademarks and its goodwill
separately for the transfer of the trademarks through the process of assignment and
the licencing.
• Goodwill is the basic builder of the reputation of the products and services under
the trademarks.
• For establishing the goodwill of a product it is necessary to maintain the good
quality of the products and services provided under the said trademark.
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18. THANK YOU
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