Trade mark assignment and brand-name exemption: assignees were entitled to small scale industry relief after transfer of the mark.

Assignment of a registered trade mark transferred the right to use the brand name to the assessees, because the deed expressly conveyed the mark, required steps for registration in their favour, and barred the assignor from further exploitation. On that basis, the brand could not continue to be treated in common parlance as belonging to the earlier owner, and the small scale industry exemption could not be denied on that ground. Section 37 of the Trade and Merchandise Marks Act, 1958 recognises assignment and transmission of a trade mark with or without goodwill, supporting the assessees' entitlement to the notification benefit.

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Issues: Whether the assessees were entitled to the benefit of the small scale industry exemption when the trade mark used on the goods had been assigned to them by the erstwhile owner.

Analysis: The trade mark was originally registered in the name of the erstwhile owner, but the assignment deed expressly transferred the trade mark to the assessees and required the assignor to do all acts necessary for registration in their favour. The deed also provided that the assignor would cease to have any right to exploit the trade mark and would not manufacture, sell, or distribute the product. In these circumstances, the assignees became the persons entitled to use the brand name, and the reasoning that the brand would continue to be perceived in common parlance as belonging to the earlier owner was found unsustainable. Section 37 of the Trade and Merchandise Marks Act, 1958 recognises the power of the registered proprietor to assign and transmit the trade mark with or without goodwill.

Conclusion: The denial of the exemption was unsustainable; the assessees were entitled to the notification benefit.

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