In the realm of Intellectual Property (IP), assignments are a critical mechanism through which rights are conveyed, commercialised and strengthened. For businesses, creators, and financiers operating in an increasingly IP-driven economy, it is essential to understand the statutory framework governing (a) transfer vs. transmission, and (b) security interests such as mortgages, charges and liens on IP assets under Indian law.
Transfer (Assignment) vs. Transmission
Assignment
An assignment is a voluntary transfer of proprietary rights from one party (the assignor) to another (the assignee). The assignor transfers all or part of the rights to the assignee who then becomes the legal owner to the extent of the rights assigned.
A clearer understanding of the statutory framework governing assignments across different categories of intellectual property in India is essential. Under the Copyright Act, 1957, Sections 18 and 19 expressly permit assignment of copyright, requiring that such assignments be in writing, signed by the assignor, and specifying the term, territory and exact rights transferred. The Trade Marks Act, 1999, through Sections 37 to 45, empowers proprietors to assign trademarks, with Sections 38–40 addressing assignments with or without goodwill and Section 45 mandating registration of the assignment with the Registrar to perfect title. For patents, Sections 68 and 69 of the Patents Act, 1970 require assignments or licences to be in writing and duly executed, with registration before the Controller being essential for enforceability against third parties. Similarly, the Designs Act, 2000, under Sections 30 and 31, mandates that assignments or other interests in a design be evidenced in writing and duly registered with the Controller, without which such transfers remain ineffective against third parties. Collectively, these provisions emphasise that while assignments are universally recognised across Indian IP statutes, their validity and enforceability depend heavily on statutory formalities and registration requirements.
Transmission
Transmission occurs by operation of law rather than by contract. Common examples of transmission include inheritance, succession, bankruptcy or court orders. In transmission, the original owner does not actively convey rights; they devolve automatically according to statutory rules. In Indian trademark law transmission is expressly distinguished from assignment.
Indian IP statutes also recognise transmission, or the passing of rights by operation of law, independently of contractual assignment. The Trade Marks Act, 1999, under Section 2(1)(zc), expressly distinguishes “transmission” from assignment, thereby recognising devolution of trademark rights through legal events such as inheritance or company dissolution. The Copyright Act, 1957 similarly provides for non-contractual transfer of rights, with Section 20 enabling the devolution of copyright on the death of the author through testamentary or intestate succession. In the case of patents, Section 20 of the Patents Act, 1970 empowers the Controller to substitute applicants where rights devolve by operation of law, including in situations of succession, bankruptcy or corporate restructuring. Likewise, the Designs Act, 2000, through Section 30(4), authorises the Controller to register title in favour of persons who acquire rights in a design through devolution or transmission rather than contractual transfer. Together, these provisions confirm that Indian law accommodates both voluntary assignments and automatic transmissions, with the latter governed by statutory mechanisms rather than private agreement.
Key differences
The distinction between assignment and transmission is fundamental to understanding the movement of intellectual property rights under Indian law. An assignment is a voluntary transfer effected through a written contract, allowing the parties to customise the scope of rights, duration and territorial extent, and typically requiring registration to perfect the assignee’s title against third parties. In contrast, transmission occurs automatically by operation of law, arising from legal events such as inheritance, succession, insolvency or court orders, and passes rights in their existing form without any contractual tailoring, with the new owner required only to establish statutory proof of devolution. This divergence of intentional transfer versus legally mandated transfer has significant implications for due-diligence reviews, enforcement strategies and the determination of priority in competing claims to ownership.
India’s legislative approach to the transfer of IP reveals an underlying policy designed to preserve transactional transparency and ensure reliability of ownership records across different categories of IP. By mandating written instruments and registration for most voluntary transfers, the statutes aim to create a traceable and verifiable chain of title, which is essential for commercialisation, enforcement and valuation of IP assets. At the same time, the separate statutory recognition of transmission ensures that IP rights continue seamlessly in situations such as succession, bankruptcy or corporate restructuring, preventing gaps in ownership that could impede exploitation or cause disputes. This dual structure of contractual transfer supported by administrative recordal, and automatic devolution guided by legal procedure creates a balanced ecosystem in which IP functions both as a tradable commercial asset and as a form of property that remains stable despite changes in the rights-holder’s personal or legal circumstances.
Charges, Mortgages and Liens over IP in India
One of the most commercially significant yet unevenly regulated areas of Indian IP law concerns the creation of security interests such as mortgages, charges and pledges over intangible assets. In the case of patents and designs, the statutory framework is comparatively clear: The Patents Act, 1970, through Sections 68 and 69, requires that assignments and “other interests” in a patent, including mortgages, be reduced to writing and duly registered with the Controller, thereby enabling patents to function as recognised collateral in secured financing. Likewise, the Designs Act, 2000, under Section 30(1), explicitly acknowledges the possibility of creating mortgages and licences over a registered design and mandates their entry in the register to ensure enforceability against third parties. This legislative clarity provides lenders with the confidence to rely on patents and designs as security, facilitating their use in structured finance and asset-backed lending.
In contrast, the position is far less certain for trademarks and copyrights, as neither the Trade Marks Act, 1999 nor the Copyright Act, 1957 provides an explicit statutory framework for creating, recording or perfecting mortgages or charges over these rights. Although both statutes recognise assignments, their silence on security interests forces parties to rely on contractual workarounds such as assignments by way of security, negative pledges, escrow structures, or hypothecation of associated assets through filings under the Companies Act. While these mechanisms may create enforceable rights inter se the contracting parties, the absence of a statutory registration system for security interests over trademarks and copyrights creates significant ambiguity regarding priority, third-party notice and enforcement in insolvency scenarios. As a result, lenders tend to treat these assets as supplemental rather than standalone collateral, highlighting the continued need for a harmonised and comprehensive regime governing the creation and perfection of security interests across all classes of IP.
Practical Significance
The practical implications of these statutory distinctions are substantial for India’s growing knowledge economy. For investors, acquirers and lenders, clarity of ownership and the ability to verify encumbrances on IP assets are central to accurate valuation and risk assessment. As businesses increasingly rely on intangible assets for competitive and financial leverage, the absence of a unified framework for creating and perfecting security interests across all forms of IP complicates securitisation and asset-backed lending models. Transactions can be jeopardised when rights are incorrectly classified as assignments or transmissions, or when lenders cannot ascertain whether competing claims exist due to fragmented registries or the lack of statutory recordal mechanisms for certain IP rights. Consequently, comprehensive due diligence extending to statutory registers, corporate filings and contractual arrangements becomes essential for ensuring transactional certainty. The divergence in treatment between patents and designs on one hand, and trademarks and copyrights on the other, underscores the need for a harmonised system that supports uniform creation, registration and enforcement of security interests, thereby enabling IP to serve more effectively as a reliable and bankable commercial asset in India’s innovation-driven marketplace.
While Indian law uniformly recognises both assignments and transmissions across all major categories of IP, the treatment of security interests remains inconsistent. Patents and designs benefit from explicit statutory provisions that permit the creation and registration of mortgages and other proprietary interests, thereby offering greater certainty to lenders and investors. In contrast, trademarks and copyrights lack comparable mechanisms, leaving parties reliant on contractual constructs that do not provide the same level of legal protection or priority assurance. In this context, a nuanced understanding of how IP rights are assigned, how they devolve by operation of law, and how security interests can be created and perfected within the existing statutory framework becomes indispensable. Such competence is critical not only for drafting robust commercial agreements but also for conducting thorough due diligence, safeguarding investments, and ensuring predictability and enforceability in IP-driven transactions.
