Advertisement of provisional liquidation and distribution account
An individual may file a trademark in his or her own name, as opposed to in the name of a company. In such cases, the asset should – as is the case with immovable or movable property – be specified in the individual's will and appropriately bequeathed to a nominated third party. This will ensure streamlined succession planning, particularly where the trademark is a core asset of the business and its affiliated brand value.
Advertisement of provisional liquidation and distribution account
On the death of an individual, an executor of the individual's estate will be appointed and his or her will assessed. If a trademark has been bequeathed to a nominated beneficiary, reference to the mark and its value will be included and referenced in the provisional liquidation and distribution account pertaining to the estate. The provisional liquidation and distribution account will be advertised in the Government Gazette for 21 days and be open for inspection by the master of the High Court. If no objections are filed during the advertisement period, the trademark will usually be transferred to the nominated beneficiary.
However, that is not the end of the process. As in any assignment or transfer of ownership of an IP asset, the transfer must be recorded in the Trademark Register. Failing this, the trademark will remain in the deceased's name, despite the fact that the transfer has been effected by operation of law. To avoid this, the nominated beneficiary must request that the executor of the estate sign a deed of assignment on behalf of the deceased. The recordal of the transfer can then be effected by the registrar of trademarks and the Trademarks Register can be updated.
If the above step is not taken in a timely manner, issues can arise. For example, the beneficiary may be unable to locate the executor at a later point to request that he or she sign a deed of assignment. Further, if the recordal request is not lodged with the registrar of trademarks within one year from the end of the advertisement period (ie, the effective date of the transfer), the beneficiary must pay penalty fees for its late lodgement. An interested party could also attack the validity of the trademark registration if the mark's entry in the register is incorrect (ie, still recorded in the deceased's name) or the mark appears not to have been used for more than two years after the deceased's death.
IP rights that form an important part of a business should be explicitly included in estate and succession planning initiatives, including if registered in an individual's own name. Further, a transfer of ownership recordal must be effected to avoid potentially invalidating the IP right. Taking the above steps will ensure that such IP rights remain active and maintain their value beyond the death of the original rights holder.
For further information please contact Karen Kitchen at KISCH IP by telephone (+27 11 324 3000) or email ([email protected]). The KISCH IP website can be accessed at www.kisch-ip.com.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
