Typically, trademark applications and registrations can be assigned in whole or in part. For general information on trademark assignments, see the web page entitled, Trademark Assignments, where important concepts such as the chain of title and recording an assignment are discussed. However, there are special rules for intent-to-use applications under §10 of the Trademark Act. The statute is referred to as the anti-trafficking provision of the Lanham Act, 15 U.S.C. §1060(a)(1). It specifically states:
[N]o application to register a mark under section 1051(b) of this title shall be assignable prior to the filing of an amendment under section 1051(c) of this title to bring the application into conformity with section 1051(a) of this title or the filing of the verified statement of use under section 1051(d) of this title, except for an assignment to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing.
The policy behind the statute is to ban assignments of intent-to-use applications (prior to the filing of an Allegation of Use or Statement of Use), unless the application is assigned with the business associated with the mark. Assuming there is an ongoing and existing business, the assignee of the intent-to-use trademark application, must purchase the whole business (assets, business location if one exists, employees etc.) affiliated with the mark. If the assignment is held to be invalid, it will void the underlying application or registration under §10 of the Trademark Act. See Clorox Co. v. Chem. Bank, 40 USPQ2d 1098 (TTAB 1996).
The following factors will be considered when determining if the assignee is a successor to the business of the applicant, was there a transfer of the business and the good will of the trademark, is there continuity of management, is the assignee producing products or rendering services similar to the applicant, has there been a transfer of assets, and are there documents supporting these facts. The fact finder will look to determine if the assignment was part of a larger transaction between the applicant and the assignee. In the matter of Central Garden & Pet Company v. Doskocil Manufacturing Company, Inc., 108 USPQ2d 1134 (TTAB 2013) [precedential], this was part of the problem. An assignment was recorded with the Assignment Division of the United States Patent & Trademark Office (“USPTO”), but the assignment constituted the entire agreement between the parties, and was not part of a more significant transaction. In this case, the assignee was not the successor to the business of the applicant. In fact, the Assignor continued in the same business after the transfer, including producing and selling the same products branded with the mark that was the subject of the assignment.