Transfer of trademark rights (alienation): how to sell or buy a brand in Ukraine

A trademark (TM) is an important intangible asset of any business that individualises goods and services in the market and builds a company’s reputation. Like any other asset, a trademark can be the subject of civil law transactions, in particular, it can be sold or bought. The legal mechanism that regulates the complete transfer of ownership of a trademark from one person to another is called the transfer of rights to a trademark or alienation of a trademark.

In essence, the alienation of a trademark means the complete sale of thebrand, as a result of which the original owner (the Alienator) fully transfers all its exclusive property rights to the trademark to the new owner (the Acquirer), losing any rights to further use or dispose of it. It is important to clearly distinguish the transfer of rights to the TM from licensing. Unlike a licensing agreement, which only grants permission to use a trademark under certain conditions (often with restrictions on the territory, term, and methods of use), an alienation agreement provides for the final and irrevocable transfer of ownership.

In this article, the lawyers of Polikarpov Law Firm will review in detail the legal and practical aspects of the procedure foralienation of the trademark in Ukraine: the reasons for such transactions, the key elements of the assignment agreement, the mandatory state registration and the main steps to be taken by both the seller and the buyer of the brand. Understanding these aspects is crucial for the correct and safe execution of brand sale.

I. Why transfer/acquire trademark rights?

The decision to transfer the rights to a TM ( alienation) or, conversely ,to buy the brand is a significant step for both the seller (Alienator) and the buyer (Acquirer). Such transactions rarely happen spontaneously; they are usually the result of well-considered strategic decisions driven by specific business objectives or changing market circumstances. Understanding the motivations of both parties is important in analysing the feasibility and terms of the deal.

In this section, we will look at the main reasons why trademark owners alienate their trademarks, as well as the factors that motivate other companies or entrepreneurs to acquire rights to existing brands. An analysis of these reasons will help to better understand the context in which transactions with of transfer of trademark rights take place and assess their potential business implications, such as the sale of a business or its expansion.

Subsection 1.1: Reasons for alienation for the owner (Alienator)

The decision to alienate the rights to a trademark, i.e. to sell it outright, may be driven by various strategic, economic or organisational factors on the part of the owner (Alienator). Understanding these reasons helps to understand the context of the transaction. The most common motivations include:

• Selling a business or a part of it: Often, a trademark is an integral part of the business being sold. In a full sale of a business, the rights to the key TMs under which it operated are logically transferred to the new owner along with other assets (production facilities, customer base, staff, etc.). Similarly, when a separate business line or division of a company is sold, the trademarks associated with that particular part of the business may be alienated.
• Rebranding or change of business strategy: A company may decide to change its name, visual style or even completely reorient its activities. In this case, the existing trademark may become redundant or not fit the new strategy. Rather than simply stop using it, the owner may decide to sell the rights to it to another interested party.
• Monetising an unused asset: Sometimes a company may own the rights to a trademark that is not actively used for some reason (for example, it was registered “for future reference” or a project under it was not implemented). If the brand has a certain market recognition or potential, selling it can be a way to monetise this dormant intangible asset and generate additional revenue.
• Corporate restructuring: In the process of mergers, acquisitions, divestitures or internal restructuring, may need to optimise its brand portfolio. Some trademarks may be recognised as non-core or duplicative, and their disposal will be a logical step to simplify the asset structure and focus on key brands.

Thus, for the owner, the alienation of trademark rights is often not just a desire to get rid of an asset, but a conscious decision aimed at achieving specific business goals, whether it is to raise funds from the sale of a business, optimise operations through restructuring, or monetise unused resources.

Subsection 1.2: Reasons for acquisition for the buyer (Acquirer)

On the other side of the transaction, the decision to purchase thebrand, i.e. to acquire rights to an existing trademark, is also made by the Acquirer based on certain strategic considerations and business goals. Instead of creating and promoting your own brand from scratch, which requires significant investment of time and resources, the acquisition of an existing TM may have a number of advantages. The main reasons for acquiring the rights to a trademark include:

• Acquisition of a ready-made, recognisable brand: This is one of the most common reasons. Buying a brand that already has a certain history, reputation and recognition among consumers allows the Acquirer to significantly reduce time to market and marketing costs. Acquiring the rights to , a ready-made brand can immediately secure a certain market share and consumer loyalty associated with this brand.
• Expansion of own business: The acquirer can use the acquired TM to expand the range of its own goods or services. For example, a company that produces one type of product may acquire a well-known brand in a related category to enter this new market segment under a name that is already familiar to consumers. This may also apply to geographical business expansion if the acquired TM is recognisable in the region where the Acquirer is seeking to enter.
• Entering a new market under a well-known brand: Launching a product in a new market always involves risks and the need for significant marketing investment. Acquiring a brand that is already established and recognised in that target market can make this process much easier and increase the chances of success.
• Strategic elimination of a competitor: In some cases, the acquisition of rights to a competitor’s brand may be a strategic move to eliminate the competitor from the market or weaken its position. By acquiring a competitor’s key brand, the Acquirer can either stop using it or integrate it into its own portfolio, thereby consolidating the market.
• Gaining a synergistic effect: The acquired brand can successfully complement the Acquirer’s existing brand portfolio, creating a synergistic effect and strengthening the company’s overall market position.

Thus, for the Acquirer , the purchase of a brand is often a strategic investment that allows it to achieve certain business goals faster, whether it is accelerated market entry, business expansion or gaining competitive advantages by using an existing brand.

II. Legal registration: The assignment agreement

Once the parties have reached an agreement on the feasibility and basic commercial terms of the transfer of rights to a trademark, the next critical step is to properly document the transaction. It is not enough to simply agree to sell or buy a brand; the transfer of exclusive property rights must be clearly set out in a written document that meets the requirements of the applicable Ukrainian law.

The main legal instrument used to formalise the alienation of a trademark is an agreement on the transfer of exclusive intellectual property rights to a trademark (abbreviated as anagreement on the transfer of rights). It is this agreement that serves as the legal basis for the transfer of ownership from the Alienator to the Acquirer and sets out all the terms of the transaction. In this section, we will take a closer look at the key elements of such an agreement: its subject matter, parties, material and other important terms that must be provided for to ensure the legal purity and security of the transaction for both parties. Neglecting to properly execute a rights transfer agreement can lead to serious legal problems in the future.

Subsection 2.1: Subject matter of the agreement

A key element of any trademark assignment agreement is a clear and unambiguous definition of its subject matter. In this case,the subject matter of the agreement is a set of exclusive intellectual property rights to a particular trademark, which are fully transferred from the Alienator to the Acquirer.

The exclusive property rights to a trademark include, in particular, the right to use it in any manner not prohibited by law, the exclusive right to allow its use by other persons (for example, by entering into licensing agreements, although after the assignment this right will already belong to the Acquirer), the exclusive right to prevent the unlawful use of the trademark, including prohibiting such use, as well as other property rights established by law. By entering intoa rights transfer agreement with , the Alienator transfers thisentire set of rights to the Acquirer in respect of the designated TM.

In order for the rights transfer agreement to be legally correct and effective, it is necessary to identify the trademark to which the rights are transferred as accurately as possible. It is not enough to simply state its name. The contract must contain the following:

• Number of the certificate of Ukraine for a mark for goods and services: This is a unique registration number assigned to a trademark upon its state registration.
• Image (reproduction) of the trademark: It is advisable to attach to the agreement an image of the trademark that corresponds to the registered one.
• List of goods and/or services: It is necessary to clearly indicate which goods and/or services (indicating the relevant classes of the International Classification of Goods and Services – ICGS) for which the TM is registered, the rights are transferred. The rights may be transferred both in respect of the entire list of goods/services specified in the certificate and in respect of only a part of them. This should be clearly stated in the agreement.

Failure to clearly identify the trademark and the scope of the rights to be transferred in the subject matter of the agreement may result in the agreement being declared unconcluded or in disputes between the parties in the future. Therefore, special attention should be paid to the wording of this section ofthe assignment agreement.

Subsection 2.2: Parties to the agreement

The next important element of a trade mark assignment agreement is a clear definition of its parties. Any agreement of this type involves two parties: the one that transfers the rights and the one that acquires them.

1. Alienator (seller): This is a party to the agreement, who is the actual owner of the exclusive property rights to the trademark at the time of the agreement and who intends to transfer (alienate) these rights to the other party. Thealienator of can be either an individual (citizen, individual entrepreneur) or a legal entity (company, organisation) that owns a certificate of Ukraine for a trademark or has a duly executed right to alienate this TM (for example, on the basis of a preliminary agreement). The agreement must accurately indicate the full name (for a legal entity) or full name (for an individual) of theAlienator , its identification data (EDRPOU/RNOKPP code, address) and the document on the basis of which the representative acts (if the agreement is signed by a representative).
2. Acquirer (buyer): This is the party to theagreement that intends to obtain (acquire) exclusive property rights to the trademark from the Alienator. The Acquirer can also be both an individual and a legal entity that is interested in purchasing the brand. Similarly to the Alienator, the agreement must clearly identify the Acquirer, specifying its full name, identification data and information about its representative (if necessary).

Clear identification of the parties to the agreement – the Alienator and the Acquirer – is a prerequisite for its validity. This makes it possible to unambiguously establish who is transferring the rights and who is acquiring them, which is the basis for further state registration of the transfer of rights and the exercise of rights and obligations under the agreement.

Subsection 2.3: Essential terms of the agreement

In order for a trademark assignment agreement to be considered concluded and legally binding, it must contain certain essential terms, i.e. terms without which the agreement cannot exist. Legislation and business practice define several of these key provisions:

1. Subject matter of the agreement: As already discussed in detail in Subsection 2.1, a clear definition of the trademark (certificate number, image) and the scope of the rights to be transferred (in whole or in part with respect to the list of goods/services) is an absolutely necessary, essential condition. Without this, it is impossible to understand what exactly is the subject of the agreement.
2. The price of the agreement and the settlement procedure:A trademark transfer agreement is a paid agreement (unless the parties expressly agree on a free transfer, which is less common). Therefore, the pricefor which the Alienator transfers the rights to the Acquirer is an essential condition. The contract must clearly state:
   • The total amount of remuneration (contract price).
   • Currency of payment.
   • Procedure and terms of payment (e.g., full prepayment, payment in instalments, payment after state registration of the transfer of rights). Uncertainty about the price may lead to disputes.
3. Terms and conditions of transfer of rights:Not less than essential conditionis to determine the moment when the exclusive property rights to the TM are transferred from the Alienator to the Acquirer. This may be:
   • Date of signing the contract.
   • Date of full payment under the contract.
   • The date of state registration of the transfer of rights in UKRNOVI (this option is often the safest for both parties, as it links the final transfer of rights to official recognition by the state).
     This point (timeframe) should be clearly defined to avoid uncertainty as to who is the actual owner of the rights at a particular time.
4. Representations and warranties of the parties:Although not always expressly required by law as a an essential conditionThe inclusion of representations and warranties is critical to minimise risks, especially for the Acquirer. Typical warranties by the Alienator include:
   • Assurance that he is the sole and full owner of exclusive property rights to the TM.
   • A guarantee that the rights to the TM are not pledged, transferred to other parties under licence agreements (if exclusive rights are transferred), or subject to arrest or other encumbrances.
   • Assurance that there are no legal disputes or claims of third parties in relation to the TM.
   • Guarantee of the validity of the certificate for the TM at the time of the agreement.

Agreeing on all of these essential terms ( subject matter, price, terms and conditions of transfer, key guarantees) is a guarantee of the legal validity of the transfer agreement and minimisation of potential disputes between the parties in the future.

Subsection 2.4: Other important terms

In addition to the essential terms discussed above, it is advisable to include a number of other important provisions in a trademark assignment agreement to ensure the completeness and legal protection of the agreement. These terms help to resolve potential problematic situations and more clearly define the rights and obligations of the parties. These terms include:

• Liability of the parties:This section defines the consequences of the parties’ breach of their obligations under the contract. It is important to be clear:
  • Types of violations (e.g., late payment by the Acquirer, false warranties by the Alienator, breach of confidentiality).
  • Sanctions for breaches (fines, penalties, damages).
  • Limits of liability.
    Clear liabilityprovisions encourage the parties to properly perform the contract and simplify the procedure for collecting compensation in case of violations.
• Confidentiality: The terms of the contract, including the price of the transfer of rights, as well as any other commercial or technical information exchanged between the parties in the course of concluding and performing the contract, may constitute a trade secret. The confidentiality section of sets out the parties’ obligations not to disclose such information to third parties (except as required by law, for example, for state registration). This is particularly important to preserve the commercial interests of the parties.
• Dispute resolution procedure:A mechanism for resolving possible disagreements and disputes that may arise between the parties in connection with the performance of the contract should be provided. This may include:
  • A mandatory attempt to resolve the dispute through negotiations.
  • Determination of a specific court (usually a commercial court at the location of the defendant or at the place of the contract) to consider disputes that could not be resolved amicably.
• Force majeure (circumstances of insuperable force):This standard clause regulates situations where the performance of contractual obligations becomes impossible due to circumstances beyond the control of the parties (natural disasters, wars, epidemics, legal prohibitions, etc.). In the section on force majeureis indicated:
  • List of circumstances recognised as force majeure.
  • The procedure for notifying the other party of the occurrence of such circumstances.
  • Consequences of force majeure ( exemption from liability for non-performance, extension of performance periods, possibility of termination of the agreement if the circumstances last too long).

The inclusion of these and other additional terms (e.g., applicable law, procedure for amending the agreement, allocation of registration costs) makes the trademark transfer agreement more detailed, comprehensive and secure, helping to avoid potential problems and misunderstandings in the future.

III. State registration of the transfer of rights

The conclusion and signing of a duly executed trademark transfer agreement by the parties is a fundamental step that records the will of the Alienator and the Acquirer. However, in order for the transfer of exclusive property rights to a trademark to have full legal effect not only between the parties to the agreement, but also to be binding on all third parties and the state, another important procedure is required – state registration of the transfer of rights.

Without such registration, even if there is a valid agreement, the new owner (the Transferee) may face certain difficulties in exercising its rights and protecting them from violations by third parties. That is why the stage of state registration with the Ukrainian National Intellectual Property and Innovation Authority (UNIPA) is an integral and mandatory part of the process of alienation of a trademark in Ukraine. In this section, we will consider the mandatory nature of this procedure, its main stages and the consequences of entering the relevant information into the official State Register.

Subsection 3.1: Mandatory registration

Pursuant to Article 16 of the Law of Ukraine “On the Protection of Rights to Trademarks”, an agreement on the transfer of exclusive property rights to a trademark is valid between the parties from the moment of its conclusion (unless otherwise provided by the agreement itself), but becomes effective for any third parties only after the state registration of the transfer of these rights at . This provision of the law emphasises the critical importance and, in fact, mandatory nature of the registration procedure in .

What does this mean in practice?

• For the parties to the agreement: The agreement itself creates rights and obligations for the Alienator and the Acquirer from the moment specified in the agreement (for example, from the date of signing or payment).
• For third parties: All other entities (competitors, consumers, other state authorities, courts) will be deemed to be notified of the change of trademark owner and will be obliged to recognise the rights of the new owner only after the transfer of rights is entered into the relevant State Register of the Ukrainian Trademark Office.

Consequences of the lack of state registration:

1. Risks for the Acquirer:Until the moment of registration, it is the Alienator who formally remains the owner of the TM according to the official register. This may be difficult for the Acquirer:
   • Protecting its rights in case of their violation by third parties (for example, filing a lawsuit).
   • Conclusion of licence agreements for the use of the TM.
   • Further alienation of rights to this TM.
   • Proof of rights in relations with customs or antimonopoly authorities.
2. Potential problems for the Alienator: Although the Alienator has transferred the rights under the contract, until the moment of registration, he may still be considered responsible for certain actions related to the TM from the point of view of third parties.
3. Legal uncertainty: The absence of registration creates a state of legal uncertainty as to the true owner of the rights to the TM in the eyes of the public and the state.

Thus, although the agreement itself is the basis for the transfer of rights, it is the state registration in the Ukrainian National Trademark Office that makes this transfer public and fully effective in relations with all third parties. Neglecting this procedure can lead to significant legal risks and complications for the new brand owner.

Subsection 3.2: Registration procedure

The procedure for registering the transfer of exclusive property rights to a trademark is carried out by the National Intellectual Property and Innovation Authority (UKRNOIVI) on the basis of a relevant application and the documents attached thereto. This procedure is administrative and includes the following key steps:

1. Preparation and submission of the application: The interested party (usually the Acquirer, but it may be the Alienator or both parties together, depending on the agreements) prepares and submits to the UAPTO a special application in the prescribed form for state registration of the transfer of ownership of the trademark. The application shall contain information about the TM (certificate number), data of the Alienator and the Acquirer, as well as details of the agreement under which the rights were transferred.
2. Preparation of a package of documents:To applicationa certain list of documents must be attached of documentsconfirming the fact and terms of the transfer of rights. The main documentsє:
   • Rights transfer agreement: Original agreement or its notarised copy. This document is the basis for registration.
   • Document confirming payment of the fee: A receipt or payment order confirming payment of the established state fee for entering information on the transfer of ownership of the mark into the Register. The amount ofthe fee is determined by the relevant regulations and may depend on the number of TMs and the applicant’s status (individual/legal entity).
   • Power of attorney: If the application is filed by a representative (e.g., a patent attorney or lawyer), a power of attorney confirming his/her authority must be attached.
3. Payment of the state fee: As mentioned above, the official state fee for the procedure of registration and amendments to the Register is paid . Without proof of payment, the application will not be considered on its merits. For up-to-date information on the fees and payment details, please refer to the official website .
4. Submission of documents to UKRNOIVI: The completed application together with the full set of required documents and proof of payment of the fee shall be submitted to UKRNOIVI (possible options for submission: in person, by mail, through the electronic application system, if such a function is available).

Upon receipt of the full package of documents, the Ukrainian National Institute of Intellectual Property examines them for compliance with the established requirements and, if there are no grounds for refusal, carries out the procedure of registration of the transfer of rights. It is recommended that you always check the currentapplication forms , a detailed list of documents and information on the amount of fees on the official website of the Ukrainian National Institute of Intellectual Property before starting the procedure.

Subsection 3.3: Entering information into the Register

Upon successful completion of the verification of the filed application and the attached documents for compliance with the established requirements, the National Intellectual Property and Innovation Authority (NIPA) performs the final step of the state registration procedure for the transfer of rights – entering the information into the State Register of Certificates of Ukraine for Trademarks and Service Marks.

The State Register of Certificates is an official state database containing all relevant information on trademarks registered in Ukraine, their owners, lists of goods/services, registration dates, as well as information on any changes to the legal status of these trademarks, including transfers of ownership.

When registering the transfer of rights to a trademark, the following key informationis entered into the relevant section of the State Register of Certificates:

• Information about the new owner (Acquirer) of the trademark (full name, address, identification data).
• Date of entry into the Register of information on the transfer of ownership.
• The number and date of the agreement under which the rights were transferred.

Once the information isentered into the Register at, the information on the change of trademark owner becomes public. The UIPI also publishes information on the state registration of the transfer of ownership of a trademark in its official Bulletin.

It is from the moment the information is entered into the State Register of Certificates that the transfer of exclusive property rights to a trademark is considered to have taken place not only between the parties to the contract, but is also officially recognised by the state and binding on all third parties. This provides the Acquirer with full legitimacy as the new owner of the brand and the ability to fully exercise and protect its rights.

IV. Due Diligence before entering into an agreement

The conclusion of a trademark assignment agreement is a significant legal and financial transaction that carries potential risks for both parties – the Acquirer (buyer) and the Alienator (seller). To minimise these risks and ensure that the transaction is legally sound, the parties are strongly advised to conduct a thorough due diligence of the subject matter of the transaction (trademark) and the counterparty before signing the agreement. Thisdue diligence process is known as Due Diligence.

Conducting Due Diligence allows you to identify potential problems related to the trademark (e.g. encumbrances, disputes, invalidation of the certificate), assess the real value of the asset and check the reliability of the counterparty. Although the bulk of the due diligence usually falls on the Acquirer, as it is the one who takes over the asset with all possible “surprises”, some preparatory checking of the TM and documents is also advisable on the part of the Alienator. In this section, we will look at the key aspects of TM due diligence that the Acquirer should perform before purchasing a brand, as well as recommendations for the Alienator to prepare for the transaction.

Subsection 4.1: Due Diligence by the Acquirer

For the Acquirer (buyer), who invests in the acquisition of a trademark, conducting a thorough trademarkdue diligence and legal analysis (Due Diligence) before entering into an agreement is an absolutely critical stage. This check helps to ensure that the buyer acquires a “clean” asset without hidden problems, that the rights to the TM really belong to the Alienator, and that the transaction does not carry excessive risks.

The main aspects of trademarkdue diligence to be carried out by the Acquirer:

1. Checking the validity of the certificate:
   • It is necessary to make sure that the Ukrainian trademark certificate is valid at the time of the transaction. This can be done through the official databases of the Ukrainian Trademark Office.
   • You should check whether the fees for maintaining the validity of the certificate have been paid on time. If the certificate is due to expire in the near future, you should consider whether it needs to be renewed.
2. Verification of the owner:
   • To make sure that the person acting as the Alienator under the agreement is indeed the owner of the TM according to the State Register of Certificates.
3. Checking the absence of encumbrances:
   • It is very important to find out whether the rights to the TM are not encumbered by the rights of third parties. This includes checking the availability of:
     • Registered licence agreements (especially exclusive licences that may restrict the Acquirer’s use of the TM).
     • Pledge agreements for the rights to the TM.
     • Any other registered encumbrances or restrictions.
   • This information can also be obtained from the official registers of the Ukrainian National Property Registry and the State Register of Encumbrances on Movable Property.
4. Checking the absence of disputes:
   • It is necessary to check whether the trademark is the subject of litigation (e.g., for invalidation of registration, infringement of third-party rights).
   • It is also worth finding out whether any objections to the registration of the trademark or applications for recognition of its well-known status by other persons have been filed with the Ukrainian Trademark and Trademark Office.
   • A check of the court registers and the registers of the Ukrainian Trademark and Trademark Office will help to identify such risks.
5. Checking the history of use of the TM:
   • Although it is more difficult to verify formally, it is advisable to collect information on how and how intensively the TM was used by the Alienator. Prolonged non-use of the TM (more than 5 years from the date of registration or the last use) may be grounds for early termination of the certificate at the request of the interested party.
   • It is also important to assess the brand’s reputation in the market.

A thorough check of the TM as part of the Due Diligence procedure allows the Acquirer to make an informed decision on the feasibility of purchasing the brand, agree on a fair price and include in the agreement the necessary representations and warranties from the Alienator to minimise the identified risks.

Section 4.2: Preparation by the Disposer

Although the main burden of due diligence usually lies with the Acquirer, the Alienator (seller) is also interested in a smooth and quick completion of the transaction. Therefore, careful preparation for the sale of a trademark by the seller is equally important. Proactive preparation helps to avoid surprises during negotiations and due diligence by the Acquirer, speed up the process of concluding the agreement and state registration, and strengthen the trust of the potential buyer.

Recommendations for the Alienator to prepare for the alienation of rights to the TM:

1. Make sure that the certificate is valid:
   • Before starting negotiations , the Alienator should independently check the status of its trademark in the State Register of Certificates of the Ukrainian Trademark Office.
   • It is important to make sure that the certificate has not expired and that all necessary fees for maintaining its validity have been paid in a timely manner. If the next fee or renewal is due, it is advisable to do so in advance.
2. Prepare all necessary documents:
   • The Alienator should collect and organise all documents related to the trademark: the original certificate, documents confirming the history of the brand (if it is important for the Acquirer), evidence of use of the TM (especially if more than 5 years have passed since registration and the brand has been used), any available brand valuation reports, etc.
   • A complete and orderly package of documents makes a positive impression on the Acquirer and simplifies the Due Diligence process.
3. Check the absence of “problems” with the TM:
   • The Alienator of should independently check whether there are any encumbrances on its TM (pledges, licences that may prevent the sale). If such encumbrances exist, they must either be removed prior to the sale or clearly regulated in the agreement with the Acquirer.
   • It is also advisable to check for possible litigation or third-party claims against the TM. Resolving such issues before negotiating the sale significantly increases the attractiveness of the asset.
4. Determine the scope of rights to be transferred:
   • If the Alienator plans to transfer the rights not to the entire list of goods/services specified in the certificate, it should clearly define which part of the list it is ready to alienate.

Early and thorough preparation on the part of the Alienator not only simplifies the sale procedure, but also allows to justify the price and terms of the transaction, minimising the risks of claims from the Acquirer after the transaction is concluded.

V. Tax aspects

In addition to legal formalisation and state registration, the transfer of rights to a trademark also has certain tax implications for both the Alienator and the Acquirer. Understanding these aspects is important for the correct accounting and tax treatment of the transaction and avoiding potential problems with regulatory authorities.

It should be noted that the specific tax treatment of a transaction involving the alienation of rights to a trademark depends on many factors, including

• The legal status of the parties (legal entities, individual entrepreneurs, individuals).
• The taxation system of the parties (general system, simplified system).
• The residency status of the parties.
• Contract price.

In general, the main taxes that may arise in connection with the transfer of rights to a trademark are:

1. Value Added Tax (VAT): Transactions involving the transfer of rights to intellectual property, including trademarks, may be subject to VAT. The place of supply of the service (transfer of rights) and the VAT status of both parties should be analysed to determine whether a VAT liability arises and who is responsible for its calculation and payment.
2. Corporate income tax / personal income tax (PIT):
   • For the Disposer – a legal entity under the general taxation system, the income from the sale of intangible asset (TM) is included in the financial result before tax and affects the object of income taxation.
   • For the Alienator – an individual, the income from the sale of the IP is subject to personal income tax and military duty in accordance with the rules established by the Tax Code of Ukraine.
   • The Acquirer, in turn, receives an intangible asset subject to depreciation for tax purposes (if the Acquirer is a corporate income taxpayer ), which affects its financial result in future periods.

Given the complexity of tax legislation and the individual nature of each transaction, this section provides only a general overview of possible tax implications. We strongly recommend that the parties to a transaction obtain detailed advice from a qualified tax professional or auditor prior to entering into the transaction, who will be able to analyse the specific situation and provide recommendations on how to structure the transaction in a tax-efficient manner and ensure that the transaction is properly reported.

Conclusions.

The transfer of rights to the TM (alienation of a trademark) is a full-fledged sale and purchase transaction of a valuable intangible asset – a brand. This procedure allows one party (the Alienator) to make a full sale of the brand and receive a remuneration for it, and the other party (the Acquirer) to acquire an existing, often recognisable brand to achieve its own business goals.

As discussed in detail in the article, a successful and legally secure transfer of rights to the trademark requires a careful approach at all stages: from analysing the parties’ motivations and conducting a thorough due diligence to the proper legal execution of the transaction and its mandatory state registration. The key points are as follows:

• A clear understanding of the difference between alienation and licensing.
• Conclusion of a detailed written agreement on the transfer of rights with mandatory indication of all material terms (subject matter, parties, price, terms and conditions of transfer, guarantees).
• The Transferee shall conduct a comprehensive due diligence of the legal purity of the trademark prior to entering into the agreement.
• Obligatory state registration of the transfer of rights with the Ukrainian Trademark Office, without which the agreement does not enter into force for third parties.
• Consideration of the tax consequences of the transaction for both parties.

Compliance with all the above-mentioned legal aspects and procedures is a guarantee that the sale of the brand will be carried out correctly and the rights of the new owner will be properly protected. Neglecting any of the stages, especially the drafting of the agreement and state registration, can lead to significant legal risks and financial losses. Therefore, to ensure the maximum security of the transaction with for the transfer of TM rights, it is recommended to involve qualified lawyers and patent attorneys.