Trademarkabilities

✨️ An ITU application cannot be assigned. Full stop. ✨️

Well, almost full stop. Section 10 of the Lanham Act carves out one narrow exception: an ITU application can be assigned, but only to a successor to the business to which the mark pertains.

Here's the problem with that exception: if the mark isn't in use yet, there is no business to which it pertains.

That's not a technicality. That's the whole point of the restriction. Congress built it into the Lanham Act specifically to prevent trafficking in marks, defined as the practice of filing ITU applications with no genuine intent to use them, then flipping the rights to whoever wants them.

You cannot skirt this issue by dropping "successor in interest" language into an ITU assignment, it doesn't cure the problem. It papers over it. The underlying defect is still there.

What's actually at stake: the assignment is void. The receiving party has no valid rights. And when that comes out in litigation, the damage can be severe and expensive to undo. That’s why savvy trademark attorneys know when there is an asset purchase agreement, to hold back the ITU applications. Why? To make sure those ITU applications can be saved.

If your client holds an ITU application and wants to transfer it as part of a deal, the analysis cannot stop at "we'll add successor language." The question is is the mark in use yet? If so, get the use on file first and then record. If not, hold back the assignment until there is use.

If you're looking to build a trademark practice and want to make sure you’re avoiding traps like this the right way, check out our FREE preview of the Trademarkabilities Masterclass now. Link in bio.