Trademark Due Diligence for Deals and Investments

The USPTO's Assignment Recordation Branch records assignments, mergers, name changes, security agreements, and other documents that affect title. Since February 5, 2024, filings go through the USPTO's Assignment Center, which replaced the older ETAS and EPAS systems. Recorded documents can be searched by registration number, owner, or assignee.

Recording is a ministerial act. The USPTO does not check whether a recorded assignment is valid or what it actually transferred. A clean-looking record can hide a defective document, and a gap in the record can hide a perfectly good one. We read the underlying instruments, not just the abstract of title.

Three statutory rules drive this part of the review:

• Writing. Assignments must be by a written, executed instrument. A recorded assignment is prima facie evidence of execution. 15 U.S.C. § 1060(a)(3)
• Goodwill. A mark is assignable only with the goodwill of the business in which it is used. A bare transfer of the mark alone, an "assignment in gross," can be attacked as invalid. § 1060(a)(1)
• Recording within 3 months. An unrecorded assignment is void against a later purchaser for value without notice, unless it is recorded within 3 months after its date or before the later purchase. § 1060(a)(4)

The Lanham Act's recording provision speaks of assignments. It does not set up a federal system for perfecting security interests in trademarks. Courts have therefore held that a lender perfects a security interest in a trademark by filing a UCC financing statement under state law, generally in the debtor's state of organization, and that recording the security agreement at the USPTO alone does not perfect it.

The main decisions are In re Together Development Corp., 227 B.R. 439 (Bankr. D. Mass. 1998), where a lender that recorded only at the USPTO lost its priority in bankruptcy, and Trimarchi v. Together Development Corp., 255 B.R. 606 (D. Mass. 2000), which held that the Lanham Act does not displace the UCC filing requirement. These are trial-level rulings rather than Supreme Court or Eleventh Circuit precedent, but they are treated as the working rule in practice.

That does not make the USPTO record irrelevant. The two filings do different jobs:

• UCC-1 financing statement: perfects the lien against other creditors and a bankruptcy trustee.
• USPTO recordation: gives public notice to buyers and later lenders who search the trademark record, and flags old liens for anyone doing diligence.

Careful lenders do both, and careful buyers search both. A payoff at closing should include a UCC-3 termination and a release recorded at the USPTO, or the old lien will still appear on the trademark record years later.

Madrid: the five-year dependency

An international registration under the Madrid Protocol depends on its home-country basic application or registration for 5 years from the international registration date. If the basic mark is refused, cancelled, or narrowed in that period, the international registration is cancelled to the same extent in every designated country, a risk often called "central attack."

The holder can transform the cancelled designations into national applications that keep the original date, but only within 3 months after the cancellation is recorded in the International Register. When a target's foreign coverage rests on a basic mark that is under opposition or attack, the whole portfolio is at risk.

Ownership changes to an international registration are recorded with WIPO's International Bureau, which notifies the designated offices, including the USPTO. A transfer recorded only in the United States does not update the international record.

Latin America: first to file

Latin American trademark systems are generally first-to-file: rights come from registration, not from use. A brand that has sold in a country for years without registering there may find a distributor, former partner, or squatter already owns the registration. We check who holds each local registration, whether use requirements are met, and whether a local distributor registered the mark in its own name.

Fixing title after the fact

Nunc pro tunc assignments. When a transfer happened earlier but was never documented, a nunc pro tunc ("now for then") assignment memorializes it with its original effective date. The USPTO accepts these for recording. The effective date matters, because it must fit the rest of the chain and the intent-to-use rules.

Corrective recordations. Errors in a recorded cover sheet or document, such as a wrong registration number or a misnamed party, can be corrected by recording a corrective filing rather than starting over.

Short-form assignments. We prepare short-form trademark assignments for recording, so the full purchase agreement stays confidential.

Post-closing checklist. Record assignments within 3 months to protect against later purchasers; update Madrid records with WIPO; record with the Florida Department of State and foreign offices; terminate old UCC filings and record releases; transfer domains, handles, and Brand Registry roles; and calendar every maintenance deadline under the new owner's name.

Where a defect cannot be cured before closing, the usual tools are a closing condition, a specific indemnity, an escrow or holdback, or a price adjustment.