Why is it important to properly transfer ownership of your trademarks?

If you fail to properly assign your marks and the successor party infringes the rights of another trademark, you would receive the cease and desist letter because, according to the USPTO records, you still technically own the trademark. You would likely be able to get out of the dispute by proving you are no longer involved, but it would be an additional complication and unnecessary headache you should avoid.

Conversely, you could end up in an ownership battle if you purchase the rights and interest in a trademark and fail to properly record the assignment with the USPTO. Even if the trademark transfer document has been signed and money changed hands, if the assignment has not been recorded with the USPTO, then the prior owner still technically owns the trademark.

Trademark assignments are important not only when you sell your intellectual property to a third party, but also when your business undergoes a reorganization. Perhaps you originally filed in your name as an individual, but have since formed a limited liability company (LLC). If you were to later file a new application for a similar-sounding trademark under your LLC, you may potentially receive a refusal for likelihood of confusion with the mark held by the individual -- even if both marks are owned by related parties! By assigning the trademarks to the LLC, you would avoid the expense of filing a response to an otherwise unnecessary Office Action.

Additionally, assigning the rights to your company gives the company a legitimate right to make, use, sell, and advertise the goods or services covered by the mark. If you don’t assign the rights, then you would need to license the rights, which would create a substantial amount of work compared to a simple assignment of rights. Further, by assigning your trademark rights to your company, you build asset valuation in the company, making it more attractive to both investors and lenders.