Intellectual Property

Trademark Assignment, Transmission and Licensing in Pakistan

Trademarks change hands more often than most owners realise: a family business is incorporated, a brand is sold with a factory, a foreign franchisor appoints a Karachi master franchisee, a founder dies and the mark passes to heirs. Each of these is a transaction the Trade Marks Ordinance, 2001 expects to be documented and recorded, and each has stamp duty, tax and sometimes foreign-exchange consequences.

This guide sets out the rules on assignment, transmission and licensing, the Registry forms, and the Sindh, tax and State Bank points that decide whether a deal works in practice. Anyone searching for the best trademark licensing lawyer in Pakistan should expect advice that covers all of these together, because a licence that is valid between the parties can still fail at the Registry, the bank counter or a tax audit.

Assignment and transmission: what the Ordinance allows

Section 69(1) makes a registered trademark transmissible "by assignment, testamentary disposition or operation of law" in the same way as other personal or movable property. The main features are:

• With or without goodwill. Section 69(2) allows a mark to be transferred with the goodwill of a business or independently of it. A buyer of a brand alone, without the factory or distribution network, can therefore take a valid assignment.
• Partial transfers. Under section 69(3) an assignment may cover only some of the goods or services, or use in a particular manner or locality.
• Writing and signature. Section 69(4) provides that an assignment is not effective unless it is in writing and signed by or on behalf of the assignor (or the personal representative, for an assent). Section 69(5) applies the same rule to an assignment by way of security.
• Unregistered marks. Section 69(7) preserves the transfer of an unregistered mark as part of the goodwill of a business.

Transmission covers transfers that happen by law rather than sale: inheritance, a court-sanctioned merger or amalgamation, or a conversion of a firm into a company. The new owner still has to prove its title at the Registry with the will, succession certificate, sanctioned scheme or other instrument.

Pending applications can also be assigned. Section 71 applies sections 69 and 70 to applications, with notice to the Registrar taking the place of entry in the Register.

When a mark that is in use is assigned without the goodwill of the business in which it is used, rules 58 and 59 of the Trade Marks Rules, 2004 require an application on Form TM-20 for the Registrar's directions on advertising the assignment. The assignee must show that those directions have been followed before the assignment is entered.

Recording the transaction: section 70 and the Registry forms

Section 70 lists the "registerable transactions": an assignment of a registered mark or any right in it, the grant of a licence, the grant of a security interest, an assent by a personal representative and a court order transferring the mark. The forms prescribed by the Trade Marks Rules, 2004 and IPO-Pakistan's schedule are:

Transaction	Form	Rule
New owner of one mark by assignment or transmission	TM-23	Rule 56
New owner of several marks with the same chain of title	TM-24	Rule 56
Directions to advertise assignment without goodwill	TM-20 (extension: TM-21)	Rule 58
Entry of a registered licensee	TM-28	Rule 63
Variation of a licensee entry	TM-29	Rule 64
Cancellation of a licensee entry	TM-30 or TM-31	Rule 65
Change of proprietor's name or address only	TM-33 / TM-34	Rule 70

Under rule 56 the applicant gives full particulars of the instrument and produces the original or a certified copy for inspection. Where there is no single document, for example a chain of inheritances, the facts are set out in a statement of case and the Registrar may ask for an affidavit or further proof.

Section 70(3) explains why delay is costly. Until an application to record has been made, the transaction is "ineffective as against a person acquiring a conflicting interest" in ignorance of it, and a licensee does not have the statutory protections the section refers to. The Ordinance sets no fixed deadline, but IPO-Pakistan's schedule charges a higher official fee for TM-23 and TM-24 filed more than six months after the new owner acquired the mark.

Licensing: what makes a licence valid and what it gives the licensee

Sections 74 to 78 contain the licensing regime that replaced the old registered user system:

• Section 75: a licence may be general or limited by goods, services, manner or locality. It is not effective unless "in writing signed by or on behalf of the grantor", binds the grantor's successors unless it says otherwise, and may permit sub-licences.
• Section 76: an exclusive licence authorises the licensee to use the mark to the exclusion of everyone else, including the owner.
• Section 77: a licensee may call on the owner to sue an infringer. If the owner refuses, or does nothing within two months, the licensee may sue in its own name, but needs the leave of the High Court or IP Tribunal to continue unless the owner is joined as plaintiff or defendant. Interim relief can be sought by the licensee alone.
• Section 78: an exclusive licence may give the licensee the same rights and remedies as an assignee, running alongside the owner's.

Is an unrecorded licence effective? Between the parties, a signed written licence is valid whether or not it is recorded; section 75(3) requires writing, not registration. The risk lies elsewhere. Under section 70(3)(b) an unrecorded licensee lacks the statutory protection, so it cannot rely on section 77 to sue, and the licence is exposed if the mark is sold to a buyer unaware of it. Section 70(3)(b) actually cross-refers to sections 69, 77 and 79; the reference to section 77 is the one that matters in practice, and the others appear to be drafting carry-overs.

For the owner, section 74 deems "permitted use" to be use by the owner, and section 3(2) and (3) treat another person's use as use under the owner's control where the owner exercises quality or financial control. Neither provision depends on recordal, so controlled use by an unrecorded licensee should still help defend against a non-use cancellation. We have not found a reported decision that settles the point, so recording the licence and keeping evidence of control remain the safer course.

Licensee enforcement is heard in the IP Tribunals; our guide to IP Tribunal jurisdiction and procedure explains the forum.

Madrid registrations: ownership at WIPO, licences in Pakistan

Where a mark is protected in Pakistan through an international registration, a change of ownership is recorded with WIPO, not at the Karachi Registry. The new owner must itself be eligible to hold an international registration, through nationality, domicile or a business establishment in a Madrid member.

Licences work differently. Pakistan has made a declaration under Rule 20bis(6)(b) of the Madrid Common Regulations that recording a licence in the International Register has no effect in Pakistan. A licence of a Pakistani designation therefore has to be dealt with under domestic procedure if the licensee wants the protection of sections 70 and 77. How the Registry enters a licensee against an international registration number is a procedural point worth confirming with the Registry before filing.

Franchise agreements

Pakistan has no franchise-specific statute. A franchise is built from a trademark licence, a know-how and operations package, and supply and payment terms, governed by the Contract Act, 1872 and the licensing sections of the Ordinance. The points that cause trouble are predictable:

• Quality control. Inspection, standards and approval rights support the franchisor's claim that franchisee use is permitted use under its control.
• Sub-franchising. A master franchisee may grant sub-licences only if its licence allows it (section 75(5)). Record the master licence on TM-28 and consider whether sub-licensees should also be recorded.
• Competition law. Section 4 of the Competition Act, 2010 applies to vertical agreements. The Competition Commission's draft guidelines on section 4 treat resale price maintenance and territorial or customer restrictions as hardcore restrictions, so fixed resale prices and rigid exclusivity clauses deserve review; exemptions under sections 5 and 9 must be applied for.
• Sindh sales tax. The Sindh Revenue Board treats franchise services under tariff heading 9823.0000 of the Second Schedule to the Sindh Sales Tax on Services Act, 2011. Whether a particular licence or support fee is a franchise is often disputed; in C.P. No. D-3239 of 2018 (order dated 13 November 2024) the Sindh High Court remanded such a question to the Board. Draft the fee clauses with characterisation in mind.

Stamp duty on assignments and licences in Sindh

Instruments executed in Karachi are stamped under the Stamp Act, 1899 as it applies in Sindh. Section 2(10) defines a conveyance to include "every instrument by which property, whether moveable or immoveable, is transferred inter vivos", and the Schedule refers assignments to the conveyance article (Article 23). A deed assigning a trademark for consideration is therefore generally stamped as a conveyance, with duty calculated on the consideration. A licence that grants rights without transferring ownership is ordinarily stamped as an agreement under Article 5, unless its terms bring it within another article. The "Letter of Licence" article concerns arrangements between debtors and creditors and does not cover IP licences. Rates are set by Sindh and change through Finance Acts, so confirm them at signing.

Stamping is not a formality. Under section 35 an instrument chargeable with duty that is not duly stamped cannot be admitted in evidence or acted upon until the deficit and a penalty are paid, which can derail both the Registry recordal (rule 56 requires the instrument to be produced) and any later suit. Under section 18, an instrument executed only outside Pakistan may be stamped within three months after it is first received in Pakistan. Where parties are in different provinces, which province's stamp law applies can be debatable, and it is worth settling before execution.

Royalty tax and remitting fees abroad

Income tax. Section 2(55) of the Income Tax Ordinance, 2001 defines "royalty" to include payment for the use of, or right to use, a trademark, and clause (g) extends it to the disposal of such rights. A payment to a non-resident for a trademark licence, and possibly for an outright assignment, can therefore be a royalty. Section 6 taxes such payments to non-residents and section 152(1) requires the payer to deduct tax from the gross amount. A tax treaty may reduce the charge. Payments between residents fall under different provisions, which should be checked against the specific fee. We do not quote rates here because they change with each Finance Act; see our tax practice page for advice on the current position.

State Bank. Outward remittance of royalty, franchise and technical fees is governed by paragraph 12 of Chapter 14 of the State Bank's Foreign Exchange Manual. Under FE Circular No. 07 of 2021, the review and acknowledgment of such agreements was delegated to authorised dealer banks, which must route cases needing regulatory approval to the State Bank. EPD Circular Letter No. 12 of 2025, dated 19 December 2025, revised paragraph 12(ii)(b) for agriculture, social, infrastructure and service sector projects, including international food chains. The detailed conditions sit in annexures and bank procedures that change regularly. Have the remitting bank review the agreement before it is signed, not after the first invoice.

A short deal checklist

• Confirm the seller or licensor is the registered proprietor and that each registration is in force; see our guide on renewal and restoration.
• Check the Register for recorded licences, security interests and pending oppositions or rectification actions.
• Identify related assets: pending applications, international registrations, domain names, customs recordations and regulatory approvals carrying the brand.
• Sign in writing, stamp in Sindh, and file TM-23, TM-24 or TM-28 promptly.
• Settle withholding tax, Sindh sales tax and the bank's acknowledgment before the first payment.

For a full acquisition, the trademark review should sit within a wider exercise; see our due diligence checklist for buying a business.

Common questions

This article is general information about Pakistani law and procedure, not legal advice for any specific matter. If this touches on something you're currently facing, get in touch and we'll advise on your facts directly.