A registered industrial design in Pakistan can be sold, licensed to another party for use, or used as a security/mortgage for obtaining a loan – and all are separate legal transactions recorded through one form, Form D-10 by IPO Pakistan. The differences between assignment, licensing and mortgage of a design registration, and steps to record any of these transactions in IPO Pakistan’s Design Register are discussed here.
Assignment, License or Mortgage: What’s the Difference?
Although often used interchangeably, these three terms actually indicate three different outcomes for a design owner and are all distinct legal transactions that must be recorded using the same form:
- Assignment – transfer of ownership of the design. All rights to the design previously held by the assignor are transferred to the assignee who becomes the new legal owner of record.
- License – permission for use of the design without transfer of ownership. The licensor (owner) retains title to the design but grants the licensee the right to manufacture, sell or use the design in some other manner subject to terms and payment of royalties.
- Mortgage – use of the design right as collateral for securing a loan, with ownership typically retained by the borrower until default.
Since all involve change to the rights in the design registration, IPO Pakistan requires that these transactions be recorded on the Design Register, using Form D-10 “Application for recordal of assignment or license or mortgage for one design.”
Why it’s Important to Record Transactions on the Design Register
A registered design is as valuable as the record of it held by IPO Pakistan. Recording changes to the ownership or use of the design registration ensures that the Design Register accurately reflects the current status of the registration and provides legal protection to all concerned parties. It is not possible for a buyer of a design to prove that he or she owns a design if the transfer of ownership was not recorded in the IPO Pakistan’s Design Register. Likewise, a licensee has no protection in terms of his or her right to use the design if the licensing agreement is not recorded in the IPO Pakistan’s Design Register. And a mortgage on a design right is a security interest which should always be secured in the IPO Pakistan’s Design Register.
Filing Form D-10: The Fee and Procedure
The Fee Schedule for Design and Trademark Registration in Pakistan shows the following IPO Pakistan fees applicable to Form D-10:
| Form | Purpose | Fee (PKR) |
|---|---|---|
| D-10 | Application for recordal of assignment, license, or mortgage for one design | 2,000 |
This is the fee for recordal of assignment/license/mortgage for one design registration – and one form is required for each design registration (and for each transaction relating to a design registration, if multiple transactions are involved).
In order to file Form D-10, you’ll generally need:
- The design registration number(s) being assigned/licensed/mortgaged
- The instrument evidencing the transaction (assignment deed, license agreement, mortgage agreement/security)
- Details of both parties (transferor/licensor/mortgagor and transferee/licensee/mortgagee)
- Completed and filed Form D-10 at the Design Office along with the prescribed fee
Once the IPO Pakistan processes the Form, the Design Register will be updated to reflect the new owner of record (if the transaction involved assignment of the design), or the record of licensee (if the transaction involved licensing of use of the design), or the record of mortgage charge (if the transaction involved a mortgage of the design right).
When to Record an Assignment, License or Mortgage of a Design Registration
Assignment recordal is typically needed in cases such as: sale/purchase of a design as part of a business sale, assignment of rights by a designer to a manufacturer to make and sell goods pursuant to the design, or as a result of a company restructuring. Licensing recordal is needed when a design owner authorizes a manufacturer or distributor to make and sell goods pursuant to the design. Mortgage recordal is applicable when a business mortgages its design portfolio as security for a loan.
While Pakistan does not currently have an online portal specific to design transactions, our Trademark and IP team regularly deals with design assignment, licensing and mortgage filings as part of our general Intellectual Property Practice. See our trademark registration services in Pakistan for the full range of brand, design and intellectual property protection services we offer, and if you haven’t already registered the design in Pakistan, refer to our guide on How to Register an Industrial Design in Pakistan.
Frequently Asked Questions
What is Form D-10 used for?
Form D-10 is IPO Pakistan’s form for application for recordal of assignment, license, or mortgage affecting a registered industrial design.
What’s the difference between assigning and licensing a design?
An assignment is transfer of ownership of the design – all rights to the design previously held by the assignor are transferred to the assignee who becomes the new owner of record. A license is permission for use of the design without transfer of ownership. The licensor (owner) retains title to the design but grants the licensee the right to manufacture, sell or use the design in some other manner subject to terms and payment of royalties.
How much does it cost to record a design assignment, license, or mortgage?
IPO Pakistan charges Rs. 2,000 per Form D-10 application, according to the official Design Fee & Forms schedule.
Do I need to record a design license if I already have a signed agreement with the licensee?
A signed agreement is binding between the two parties, but recording it with IPO Pakistan through Form D-10 will put the licensee’s interest on the Design Register which provides legal protection for the licensee against third parties and future disputes.
