Difference between Transfer and Assignment

 · 3 mins read

A single word may have more than one meanings. One might wonder how complex language is and how confusing words are. Transfer and assignment are such similar terms interchangeably used yet different in legal sense. The article discusses the meaning, types of assignment and how it is different from that of transfers.

In simple terms, assignment means the sale of IP i.e., the transfer of complete ownership to the assignee including the right to exclude others from infringing it. To constitute an assignment, the terms and conditions of contract under the Indian Contract Act, 1872. The agreement must be signed and written. The specific IP laws determine the features of such assignment in detail. In Copyright law partial assignment is also permitted under section 18, which requires to mention specifically the rights assigned. Also, it is necessary to mention the time period for which the assignment is made. In the absence of such time period, generally 5 years is taken as a limit. Assigner is the owner who assigns it to another person known as assignee.

Assignment is different from that of licensing in a way that the latter only parts with certain rights and the ownership rests with the person who is ready to give away the rights.

The following are some of the common types of assignment:-

  • Legal Assignment- When the transfer of existing registered IP is transferred, wherein the new owner acquires all rights, it is known as legal assignment.
  • Equitable Assignment- It occurs when before the registration, the assigner is willing to transfer it to the assignee. Once the registration is done the assignee can acquire all the rights. Although the assignee cannot register himself as the proprietor but can show interest in the IP through a notice.
  • Mortgage- It is the total or partial transfer of IP in return of a sum of money. Once the money is repaid, the IP is reinstated to its original owner.

On the other hand, transfer means to convey or remove from one person or place to another person. Transfer is of titles whereas the Assignment is for obligations and rights.1

The term transfer is generally used for properties that can be possessed physically. For example, a car or house or those properties which can be represented by a legal instrument such as share certificate.

Assign is generally associated with intangible properties such as a debt, or benefits arising from contracts for example rental income under a lease agreement.2

An assignment is thus different from other type of transfers such as subrogation, novation, sublease etc. Assignment is basically the transfer all rights, interests, titles which the assigner conveys to assignee and the latter stands in the shoes of the assigner.3

Though the difference between novation and assignment is narrower, one ought to know the difference. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.4

And for the transfer of the property, the Transfer of Property Act, 1882 applies. It extensively deals with various kinds of transfers. There are certain set rules for transfer of property. For instance, one needs to be of sound mind, not intoxicated, of legal age and must not be disqualified by law. The Act lists kinds of transfer such as lease, mortgage, exchange, gift and sale.

To sum up, though the words transfer and assignment is used interchangeably there is a difference between them. They are governed by different legislations and are used for different purposes. So one needs to be careful and understand all the legal provisions before transferring anything.

1 Difference between Assignment and transfer, UPCOUNSEL, (Nov 09, 2021, 5: 25 pm), https://www.upcounsel.com/difference-between-assignment-and-transfer.
2 Merchants Service Co. v. Small Claims Court, 35 Cal. 2d 109, 113-114 (Cal. 1950)..
3 Knott v. McDonald’s Corp., 985 F. Supp. 1222 (N.D. Cal. 1997).
4 Assignments: the basic law, STIMMEL LAW, (Nov 9, 2022, 5: 48 pm),https://www.stimmel-law.com/en/articles/assignments-basic-law.

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