Sri Lanka takes a short, clean approach to assignment. Marks move freely, with or without the business. There is no advertisement requirement of the kind Pakistan and Bangladesh impose for an assignment without goodwill.
The whole weight sits on one sentence instead: no assignment has effect against third parties unless it is recorded.
Quick reference
| What can be assigned | A registration or a pending application |
| With the business? | Either — independently of the transfer of all or part of the enterprise |
| Partial | Yes, for part of the goods or services |
| Formality | In writing, signed by or on behalf of the contracting parties |
| Invalid if | Its purpose or effect is to mislead the public |
| Recordal | On application, on the prescribed form, with the prescribed fee |
| If not recorded | No effect against third parties |
| Associated marks | Assignable only as a whole |
What section 123 allows
An application for registration, or the registration of a mark, may be assigned or transmitted independently of the transfer of all or part of the enterprise using the mark, in respect of all or part of the goods or services for which the application was filed or the mark registered.
Two useful consequences.
Pending applications move too. You do not have to wait for registration to transfer the asset, which matters in a transaction that completes while prosecution is still running.
Partial assignment is available. A registration can be split by goods or services. Sri Lanka registers one class per application, so partial assignment operates within a class — which, combined with the rule that use of one item in a class saves the whole class on a non-use attack, is worth thinking through before carving a specification up between two owners.
The formality
The assignment or transmission shall be in writing signed by or on behalf of the contracting parties.
Note “parties” rather than just the assignor. Sri Lanka requires both sides to sign, where several neighbouring statutes require only the assignor’s signature. A deed executed by the transferor alone is not enough.
The misleading-assignment rule
Section 123(2) is the substantive control, and it is unusual in being a validity rule rather than a recordal condition.
An assignment or transmission is invalid if the purpose or effect of it is to mislead the public, in particular as to the nature, source, manufacturing process, characteristics or suitability for their purpose of the goods or services to which the mark is applied.
This is where Sri Lanka puts the policy that other systems handle through goodwill requirements and advertisement procedures. Instead of asking whether the business went with the mark, it asks whether the transfer will mislead.
In practice that matters most in two situations. Splitting a specification between unrelated owners, where the same mark will then appear on related goods from different sources. And assigning a mark that carries a strong association with a particular origin — a geographical one, or a maker’s reputation — to someone to whom that association does not apply.
Neither is prohibited as such. But if the result is that the public is misled about source or characteristics, the assignment is invalid, not merely unrecordable.
Recordal
Any person becoming entitled by assignment or transmission may apply to the Director-General, on the prescribed form, to have it recorded in the register. The application is signed by the assignee or transferee or their agent and goes in with the prescribed fee. No assignment is recorded unless the fee has been paid.
Then section 123(5): no such assignment or transmission shall have effect against third parties unless so recorded in the register.
Between the parties, an unrecorded assignment is still a contract. Against everyone else — a later acquirer, an infringer, the office — the register still shows the old owner, and that is the position that counts.
The consequences are practical and cumulative:
- an unrecorded assignee is not the registered owner for the purposes of the section 121 rights, so an infringement claim is brought by the wrong party;
- in nullity and removal proceedings, the registered owner and every assignee, licensee or sub-licensee on record must be made parties — an unrecorded assignee is simply not on the list and may not hear about the proceedings at all; and
- a renewal reminder goes to the address on the register, which is the old owner’s.
For a group that moves marks internally and tidies the paperwork later, Sri Lanka is a jurisdiction where “later” has a cost.
Licence contracts recorded against the mark
Where a licence is recorded, an assignment does not displace it quietly. The same recordal machinery applies to licence contracts, and recorded licensees have to be joined to Court proceedings about the mark.
There is also a constraint on giving the mark up: where a licence contract is recorded, the Director-General shall not accept a renunciation of the registration except on a signed declaration by which any assignee, licensee or sub-licensee on record consents, unless that consent is expressly waived in the licence contract. See trademark licensing in Sri Lanka.
Payments abroad
Section 130 gives the Director-General a referral power where a licence contract involves the payment of royalties abroad, or is for other reasons thought detrimental to the economic development of Sri Lanka — the matter goes to the Governor of the Central Bank, and an adverse view results in the record of the contract being cancelled and invalidated.
Section 130(3) applies those provisions, mutatis mutandis, to assignments and transmissions.
So a cross-border assignment with consideration flowing out of Sri Lanka is within the same referral machinery. It is not a prohibition, and in most ordinary transactions it will not bite, but it is a step that exists and it belongs in the timetable rather than in the surprises.
Associated marks cannot be split
Where the Director-General has required closely resembling marks of the same owner to be entered as associated marks, section 117 provides that they are assignable or transmissible only as a whole and not separately.
For every other purpose they are treated as separate registrations. But a brand family that has been associated on the register cannot be sold off piece by piece, and that constraint is discovered at the worst moment in a transaction. See trademark classes in Sri Lanka.
A short transaction checklist
- List registration numbers, not brands. One class per application means a brand is several registrations.
- Check the register for associations. Associated marks move only as a whole.
- Get both signatures. The Act requires the writing to be signed by or on behalf of the contracting parties.
- Test the misleading rule where a specification is being split or a mark with strong origin associations is moving.
- Record promptly, and check for recorded licences and security interests while you are there.
Frequently asked questions
Can a Sri Lankan trademark be assigned without the business? Yes. An application or a registration may be assigned or transmitted independently of the transfer of all or part of the enterprise using the mark.
Does the assignment have to be in writing? Yes, and signed by or on behalf of the contracting parties — both sides, not only the assignor.
What happens if I do not record the assignment? It has no effect against third parties. Between the parties the contract stands, but the register still shows the former owner for every external purpose.
Can an assignment be invalid? Yes. An assignment or transmission is invalid if its purpose or effect is to mislead the public, in particular as to the nature, source, manufacturing process, characteristics or suitability of the goods or services.
Can I assign only part of my specification? Yes. An assignment may cover part of the goods or services. Associated marks, however, can only be assigned as a whole.
Is there anything special about payments leaving Sri Lanka? The provisions on licence contracts involving payments abroad, which allow a referral to the Governor of the Central Bank, apply to assignments and transmissions as well.
Useful official resources
- National Intellectual Property Office of Sri Lanka — recordal forms and fees
- Intellectual Property Act, No. 36 of 2003 — sections 116, 117, 123, 130, 133
- Intellectual Property Regulations No. 01 of 2006 — regulation 29
See our related notes on trademark licensing in Sri Lanka, changes to a trademark and nullity and removal.
Moving Sri Lankan marks as part of a transaction? Talk to us.