It is a fixed principle of the law that a trade-mark cannot be assigned, or transferred, without a transfer of the business with which it is associated.

Trade-marks indicate origin. They are intimately associated with the merchandise for which they are registered. This being a fundamental principle of trade-mark law, it can be understood that a trade-mark cannot pass from hand to hand, and transferred as a separate thing, without losing its real function as a trade-mark.

The Act of 1905 (Section 10) provides that any registered trade-mark may be assigned "in connection with the good-will of the business in which the mark is used."

In the case of MacMahan Pharmacal Co. v Denver Chemical Mfg. Co. (113 Fed. R. 468), the court said:

"A trade-mark cannot be assigned, or its use licensed, except as incidental to a transfer of the business or property in connection with which it has been used. An assignment or license without such a transfer is totally inconsistent with the theory upon which the value of a trade-mark depends and its appropriation by an individual is permitted. The essential value of a trade-mark is that it identifies to the trade the merchandise upon which it appears as of a certain origin, or as the property of a certain person.... Disassociated from merchandise to which it properly appertains, it lacks the essential characteristics which alone gives it value, and becomes a false and deceitful designation."

There is a silk fabric bearing a "Radium" trade-mark, and known in the trade, and among consumers as "Radium Silk." The manufacturers of this fabric, The Gilbert Manufacturing Company, assigned this trade-mark in 1905 to another concern (Eiseman & Company). With the trade-mark they turned over to Eiseman & Company all the manufactured and labeled goods then in their possession. Thereupon the Gilbert Company ceased to use the trade-mark, but did not stop manufacturing the goods, which they put upon the market under the name "Electra". It seems to have been understood by Eiseman & Company, according to the evidence, that the Gilbert Company was to continue making the goods, provided they gave their product some other name than "Radium". As soon as Eiseman & Company obtained the assignment of the trade-mark they, too, began to manufacture the fabric, and sell it under the "Radium" trade-mark.

Now the matter comes into court through the suit of Eiseman & Company to prevent a third manufacturer from using the "Radium" trade-mark. They contended that the assignment of the mark to them by its original owner, The Gilbert Mfg. Co., gave them the exclusive right to its use.

The court held that, in the first place, the assignment of the trade-mark to Eiseman & Company was invalid, because it was not accompanied by a transfer of the good-will; in the second place, the fact that the Gilbert Company discontinued the use of the trade-mark, constituted an abandonment. Injunction was denied.

In this case, the court said: "When a trader has sold some particular article under a selected name to such an extent as to secure registration, he has established a special business in which that trade-mark is used, and if the trade-mark becomes so valuable as to induce him to sell it, he must, as a condition of transfer under the statute, assign that special business with the trade-mark of which it was the parent. Eiseman & Company, therefore, acquired no rights under the alleged assignment, which did not carry the special business."

There are exceptions, however, to this rule. The nature of these exceptions may be best shown by citing a case—that of Witthaus v Braun (44 Maryland—1875). In this case a tobacco dealer, who did not manufacture goods himself, had special brands made for him by a manufacturer. The tobacco dealer owned the brands, and merely hired the manufacturer to make his goods. The dealer assigned to the manufacturer "all his smoking tobacco brands", without transferring any other part of his business. It was held that in this case the assignment was valid, because the origin of the goods had not been changed by the transaction. The same manufacturer continued to make the tobacco, the only difference being that he now owned the business, instead of making the goods on contract.

The right to use a trade-mark identified with a business location may pass, under certain circumstances, to a purchaser of the building.

The purchaser of a hotel building, for example, buys with it the right to use its name, unless a specific stipulation to the contrary is made.

A theatre building known as Booth's Theatre was owned and managed by one Booth. After several years of occupancy, he leased the building to another person, who proceeded to give theatrical performances there. In his advertisements he referred to the place as Booth's Theatre, giving his own name as lessee. Thereupon, Booth attempted to enjoin this use of the name. The court held that the name passed with the lease of the building.

In cases where the business is of such a personal nature that the trade-mark or trade-name is identified in the public mind with the work of some particular individual, it is obvious that deception would be practised if the same identifying mark were used after that individual had ceased his connection with the enterprise. In such cases, there can be no valid transfer of the trade-mark even though the entire business, including good-will, is sold. Such a trade-mark is personal. Its use on goods indicates the special knack or skill of some one person.

The courts will protect the purchaser of a business in the use of its trade-mark or trade-name against infringement by the former owner, even though the trade-name is that of the former owner.

This principle is illustrated in the case of Jergens Co. v Woodbury, given in the New York Law Journal (Nov. 1907). The Jergens Company was the sales agent of John H. Woodbury, the celebrated dermatologist, in the sale of "Woodbury's Facial Soap." In 1901 Woodbury assigned the business to the complainant. Under the complainant's management a large and profitable sale for the soap was established.

In 1906, Woodbury started to manufacture soap again, calling his product "Woodbury's New Skin Soap." This product, so far as the package or wrappers were concerned, had no resemblance to the complainant's soap, the only point of similarity being in the name.

In a suit brought in the New York Supreme Court it was held by the court that there was ground for belief that the public would be misled by defendant's use of the name Woodbury, and he was accordingly enjoined.

This case went up to the Court of Appeals, and that court upheld the decision of the lower court, in so far as the defendant was restrained from using the name Woodbury in connection with the sale of soap in such a way that the public would be led to believe that his product was "Woodbury's Facial Soap" or a new brand thereof.

For the assignment of a trade-mark no particular form of assignment is required except it must be in writing.

The law provides that assignments may be recorded in the Patent Office. If any assignment is not recorded within three months after its date, it will be held void as against a subsequent purchaser for valuable consideration.