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Trademark rights are property rights. Like real property and personal property, as well as other intellectual property rights such as patents and copyrights, they can be assigned. However, the transfer of trademarks is unique in that any assignment of a trademark must also transfer the goodwill that is associated with that trademark. The requirement is deeper than a perfunctory recitation in an assignment document. The failure to transfer goodwill can invalidate the assignee’s rights under the agreement. A recent case that addressed rights in the trademark REIGN provides a cautionary tale of the consequence of the failure to assign a trademark with its goodwill.

The Anti-Assignment in Gross Rule

The owner of trademark rights can assign those rights to other persons or entities. The ability to assign trademark rights is significant because between competitors who wish to use the same or a confusingly similar trademark for the same or related goods, the party that began using the trademark first will generally prevail, and with any assignment the purchaser inherits the seller’s date of first use, i.e., the seller’s priority. Carnival Brand Seafood Co. v. Carnival Brands, Inc, 187 F. 3d 1307, 1310 (11th Cir. 1999).

However, any assignment of a trademark, must include an assignment of the goodwill that is associated with the trademark. 15 U.S.C. §1060(a)(1). For this reason, most assignments of trademarks explicitly recite that the assignor assigns specific trademarks and the goodwill associated therewith. However, the mere recitation of this language will not in and of itself render an assignment proper and confer priority. Failure to actually transfer the goodwill associated with a trademark is deemed an “assignment in gross” and renders the assignment invalid.

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