August 22, 2025 by Amit Kumar
Goodwill is the positive business reputation a company builds over time. It reflects customer loyalty, trust, and the quality associated with the brand.
Reputation is how well-known a brand is among the public, sometimes across industries, not just in its own class.
AMUL is mainly known for dairy products.
Because of its strong goodwill, if someone sells AMUL bread or AMUL bottled water, customers may assume these also come from AMUL.
This shows that goodwill extends beyond the class where the trademark is registered.
In India, trademark rights are usually tied to specific classes (food, clothing, electronics, etc.). But when a brand is famous, its reputation “spills over” into other industries.
Apple Inc. is registered for electronics.
If someone tries to launch “APPLE Shoes,” consumers may believe the tech giant has expanded into footwear.
Even though shoes belong to a different class, Apple can stop this because of its strong reputation.
TATA started with steel and vehicles but is now trusted in hotels, salt, consumer goods, and IT.
The name “TATA” is so reputed that no one can launch “TATA Perfumes” without permission.
When a trademark is transferred (assigned) without its goodwill, there is a risk that:
Consumers may think the new product comes from the original business.
The new owner may misuse the reputation built by someone else.
This could lead to consumer deception and trafficking in trademarks.
To prevent this, Indian law regulates assignments without goodwill.
Normally, when a trademark is sold or assigned:
Assignment with goodwill: Both the trademark and the business reputation attached to it are transferred.
Example: Selling your bakery “Sweet Bites” along with its reputation and customer base.
Assignment without goodwill: Only the trademark is transferred, but the original reputation stays with the assignor.
Example: You let another company use your bakery’s brand name for chocolates, but you continue running your bakery with the same goodwill.
Because this can confuse customers, the law requires strict procedures.
If a trademark is assigned without goodwill, it must be advertised as per the Registrar’s directions under section 42.
Purpose: To tell the public that the brand has changed hands, but not its reputation.
Without advertisement, the assignment is invalid.
The new owner must file Form TM-P as per Rule 80 with details like:
Date of assignment.
Trademark particulars.
Usage details (if unregistered).
The Registrar may ask for more documents or reject if it seems like “trafficking.”
After directions, the new owner must submit proof of advertisement as per Rule 81 (newspaper, journal, etc.).
The application must clearly mention whether the assignment was without goodwill.
Without proof, the assignment is not entered in the register.
FreshSip Case
FreshSip Pvt. Ltd. owns “FRESH SIP” for fruit juices.
It sells the trademark to another company making energy drinks, but not the juice business.
Customers may assume both products come from FreshSip.
Registrar requires an advertisement clarifying the change.
Urban Style Clothing
A company owns “URBAN STYLE” for shirts.
It assigns the mark to another firm launching perfumes.
To avoid confusion, advertisement must state the mark is now used for perfumes without goodwill of the shirt business.
SmartKey Technology
A startup owns “SMARTKEY” for mobile apps.
It assigns the mark to a smart-home company, without transferring its app business reputation.
Advertisement informs the public that the products are different.
Spice Haven Restaurant
A restaurant “SPICE HAVEN” assigns its mark to a company selling packaged spices.
To avoid misleading customers into thinking the restaurant sells spices, proper advertisement is required.
The assignment becomes invalid in law.
Competitors may object during advertisement.
Consumers may be misled, leading to disputes or brand dilution.
File Form TM-P (Rule 80) with details.
Obtain directions from the Registrar.
Publish the advertisement as instructed.
Submit proof of advertisement (Rule 81).
Without these steps, your assignment will not be valid.
The concept of assignment without goodwill arises because of the importance of goodwill and reputation in trademarks. Since reputation often extends beyond a single class of goods, transferring a trademark without its goodwill can mislead consumers.
That is why Indian law (Section 42 and Rules 80–81) makes advertisement compulsory.
Perfect — adding an FAQ will make the article much friendlier for startups, small business owners, and first-time trademark applicants, while also boosting SEO. Here’s a simple FAQ section you can add at the end of the merged article:
Goodwill is the business reputation and customer trust attached to a brand. It’s what makes customers come back to the same brand instead of choosing another. For example, people trust AMUL because of its goodwill in dairy products.
When a trademark is assigned without goodwill, only the trademark name/logo is transferred, but the reputation of the original business stays with the old owner. The new owner can use the brand for their products, but they don’t get the customer trust built earlier.
Some trademarks are so famous that their reputation extends beyond their original product category. For example:
“APPLE” is known for electronics, but if used on shoes, people may assume Apple has launched footwear.
“TATA” is trusted across multiple industries, so the brand is protected even in classes where it is not directly registered.
Yes, in many cases. If the trademark has a strong reputation, you must get permission or a license from the trademark holder. Otherwise, they can take legal action for infringement or passing off, even if your product is in a different class.
Form TM-P is the official form filed with the Registrar of Trade Marks for various purposes, including assignment without goodwill. It contains details like the date of assignment, trademark registration number, and usage details.
The law (Section 42 of the Trade Marks Act, 1999) requires advertisement so that the public is informed the mark has changed hands but not its reputation. Without advertisement, the assignment is not valid.
The assignment may be declared invalid.
Competitors can oppose or object.
Customers may get confused, leading to loss of trust and legal disputes.
While not compulsory, it is strongly recommended. A trademark lawyer or agent can:
Draft the assignment agreement correctly.
File Form TM-P properly.
Handle advertisement and proof submission.
This ensures your assignment is valid and avoids costly mistakes.