Q&As

Now that the new section 24(1A) of the Trade Marks Act 1994 is in force, what practical steps should be taken when transferring a business to ensure that trade marks that are required to be retained are not inadvertently assigned to the purchaser? Is there any guidance as to the circumstances in which the presumption in favour of transfer will not apply?

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Produced in partnership with Paul A. Harris of Venner Shipley
Published on LexisPSL on 27/02/2019

The following IP Q&A produced in partnership with Paul A. Harris of Venner Shipley provides comprehensive and up to date legal information covering:

  • Now that the new section 24(1A) of the Trade Marks Act 1994 is in force, what practical steps should be taken when transferring a business to ensure that trade marks that are required to be retained are not inadvertently assigned to the purchaser? Is there any guidance as to the circumstances in which the presumption in favour of transfer will not apply?

In short, there has been no guidance in relation to the presumption not applying, and there has been only one case in respect of it applying.

Section 24(1A) of the Trade Marks Act 1994 (TMA 1994) is designed to comply with Article 22(2) of Directive (EU) 2015/2436, the EU Trade Mark Directive, which reads:

‘A transfer of the whole of the undertaking shall include the transfer of the trade mark except where there is agreement to the contrary or circumstances clearly dictate otherwise. This provision shall apply to the contractual obligation to transfer the undertaking.’

However, there is a subtle difference in the wording of TMA 1994, s 24(1A), which refers to a ‘contractual obligation to transfer’ rather than the transfer itself. Whether this will be interpreted any differently remains to be seen, although it is not the first time that EU law has been incorrectly transposed into English law (although it may be the last).

TMA 1994, s 24(1A) provision (and Article 22(2) of the EU Trade Mark Directive) is aimed at harmonising domestic law relating to the transfer of domestic marks when a business is sold. It mirrors existing EU law in relation to EU trade marks (EUTMs) under Regulation (EU) 2017/1001, the EU Trade Mark Regulation (and before that Community trade marks

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