What Is the Process for Buying a Trade Mark in Australia?
Like any form of property, you can buy and sell trade marks. However, since trade marks are intangible, the process of transferring the trade mark from its owner to the buyer (an assignment) differs slightly from a typical buying and selling transaction. This article outlines the process for buying a trade mark in Australia and things to keep in mind at each stage of the buying process.
Identify the Owner
Once you have settled on a trade mark you wish to purchase, it is important to identify who owns the trade mark. Fortunately, the Australian Trade Mark Search is a publicly available registry that details all trade marks registered with IP Australia. Each entry on the registry includes the names of trade mark owners and their business addresses. This makes the process of contacting the trade mark owner much easier in the buying process.
Settle on an Agreement
If the trade mark owner is willing to sell their trade mark, then it is likely that you will begin negotiating a sales agreement. This is when both parties will agree on the price that they will sell the trade mark for.
It is important to bear in mind that trade marks have no settled price. Instead, the cost of a trade mark largely depends on a range of factors, such as the goodwill of the business which the trade mark represents and the competitive advantage the business has attained in the market. Generally, the greater the goodwill of a business, the higher the value of its trade marks.
There is also no settled method for trade mark valuation. Rather, specialists in the field use different methods to value intellectual property. For example, the income method values trade marks based on the amount of income it generates, which is then adjusted to its present value. On the other hand, the market method values trade marks based on the price of comparable trade marks in similar circumstances. Therefore, when you are negotiating a sale price with the trade mark owner, you could seek advice from a trade mark specialist to assess the value of the trade mark. However, it is important to note that whilst a specialist’s valuation will provide a close estimate of the value of the trade mark, only after an agreement will both parties determine the actual sale price.
Once you have negotiated the sales agreement, the trade mark owner must transfer or assign the trade mark to you.
An assignment is the formal transfer of a trade mark. It involves the trade mark owner registering a change in the ownership of the trade mark.
An effective trade mark assignment means that the original trade mark owner (the assignor) no longer enjoys the exclusive right to use, licence, and sell the trade mark. Instead, you as the buyer (the assignee) then enjoy exclusive use of the trade mark to distinguish your own goods and services.
You must register a full assignment of a trade mark with IP Australia. The registration process will require you to fill out two primary documents, the first being an assignment request form. The request form for a full assignment can be found here and generally requires the following information:
- the personal details of the assignor;
- your details and signature as the assignee; and
- the number of the assigned trade mark.
The next document required will be either evidence of assignment or a signed letter of assignment. These documents must include the:
- date of assignment;
- assignor’s name and address;
- your name and address as the assignee;
- assigned trade mark’s number; and
- signatures of both the assignor and the assignee.
You must complete both documents required to assign a trade mark with precision to ensure that the transfer of the trade mark goes as planned. If there are any mistakes made in the application or information is left out, the transfer of the trade mark may be ineffective.
If you wish to buy a trade mark, you must seek out the trade mark owner and negotiate a sales agreement for the trade mark. Whilst there is no settled price of a trade mark, the business’ goodwill usually indicates the value that the trade mark protects. Once you have negotiated a sales agreement, the trade mark owner must register the change in ownership of the trade mark with IP Australia. Once this process, known as an assignment, is completed, the original trade mark owner no longer holds the exclusive rights to use, license, and sell the trade mark. Instead, you will hold the exclusive rights as the new owner of the trade mark. If you require further legal assistance with buying a trade mark, our experienced trade mark lawyers can assist. Call us on 1300 657 423 or complete the form on this page.
Frequently Asked Questions
It is much easier to purchase a registered trade mark than an unregistered trade mark or a common law trade mark. This is because the assignment process largely depends on registering a change in the ownership of a trade mark.
Since trade marks have no settled value, their value depends on a range of factors. Generally, the value of a trade mark is indicative of the goodwill of the business it represents.