When a trademark is assigned from one owner to another, it must be transferred together with the goodwill associated with the business. Goodwill refers to the value a mark has to consumers. For instance, the goodwill of the Coca-Cola trademark is the consumer recognition and loyalty that the brand has garnered over time due to the products it sells.

An assignment in gross, however, occurs when a trademark is transferred without its accompanying goodwill. Such an assignment is invalid under U.S. trademark law and can result in abandonment of the mark, as well as loss of the mark’s priority date. The Lanham Act states that “a registered mark … shall be assignable with the good will of the business in which the mark is used.” 15 U.S.C. §1060(a)(1). This requirement prevents consumer confusion by ensuring that a trademark, serving as a source identifier, continues to represent the same goods or services with which consumers associate it.

To have a valid trademark assignment, a trademark must be assigned along with other brand assets and the assignee must produce substantially similar goods to those of the assignor. For example, if a clothing company were to acquire a food company and use the food company’s trademark to sell apparel, the transfer would be considered an invalid assignment in gross because the goodwill linked to the original food products would not carry over to the clothing. Similarly, if a company acquired another solely to benefit from its trademark priority date, it would still need to use the mark on substantially similar goods for the transfer to be valid.

The Paris Convention, an international treaty for the protection of industrial property, also requires that marks be transferred together with the business or the mark’s goodwill. This means that assignments in gross are invalid at the international level, at least among the 181 member countries of the Paris Convention.

Lutzker & Lutzker can help you manage your trademarks to ensure a successful transfer. For further reading from our website on the topics discussed here, see the following insights and IP Bits & Pieces®: What Trademark Owners Need to Know in 2025: Tariffs and Excusable Nonuse of Trademarks, OpenAI Trademark Clash, Co-Ownership series and our Trademark FAQs.