Introduction
Nunc Pro Tunc is a Latin maxim which means ‘Now for then’. It is generally used by the courts to retroactively pass an order or ruling. It is further being used in the transfer of Intellectual Property rights. The transfer of IPRs usually takes place via assignment and licensing agreements. Usually, in assignment agreements, the date of entering the agreement coincides with the operative date however, in case of Nunc Pro Tunc assignment agreements, the operative date precedes the date of execution of the agreement. For instance, an assignment deed is entered on 10th October 2024 with effect from 10th October 2023.
Here, we shall discuss the difference between retroactive and prospective agreements and the validity of retroactive agreements in India and the United States.
Retroactive and Prospective Assignment Agreement
A prospective transfer of intellectual property rights (IPRs) is dependent on the occurrence of future events and is most commonly used in copyright law. In prospective copyright assignment, an author may assign their future work, either wholly or partially, to another party for a specified period or for the entire term of the copyright. The agreement takes effect only when the future work comes into existence.
In contrast, a retroactive assignment of IPR involves a backdated agreement. To expedite market entry and avoid delays in formalizing an assignment or license agreement, parties sometimes rely on verbal agreements, which are considered valid under Indian Contract Law. Later, for the future enforcement of their rights, the parties formalize the agreement in writing with similar terms and conditions backdating it to the original verbal agreement to ensure the assignee’s title is legally sound. However, this practice is sometimes misused in litigation, making it challenging to determine whether the agreement was made in good faith or is merely a fabricated document.
Indian Scenario
The Indian IP law does not explicitly recognize nor bar the existence of nunc pro tunc assignment agreements. Section 2(b) of the Trademark Act 1999 clearly lays down that an assignment of trademark should be in writing. Further, Section 68 of the Patent Act invalidates those assignment agreements that are not reduced to writing. Similarly, for Copyright law, the assignment agreement should be in writing and duly executed. Hence, the IP laws do not mention backdated assignment agreements; the only requirement laid down is that the agreement should be in writing.
In Ramesh L. Vadodaria v. Assistant Registrar of Trademarks (2004), an assignment deed was executed on 2.9.1992, while the recital in the deed stated that the appellant was to hold the trademark from 31.3.1992. The court stated that a retrospective assignment of trademark is not valid unless a deed of assignment relates to the confirmation of an earlier transaction, i.e., there must be a prior agreement between the parties that was later confirmed in the assignment deed. The later written document is only to confirm the rights of the parties arising and accrued in accordance with the earlier oral agreement.
In Sanjay Chadha trading as Eveready v. Union of India, the question of validity of an assignment deed executed in 2009 and effective in 2005 was brought before the court. The case went through appeals before the division bench of the Delhi High Court finally pronounced its ruling. The court stated that there cannot be any retrospective assignment of a trade mark. When an assignment deed is executed on 6th January, 2009, it would have to take effect from the said date and not from an earlier date. The court further stated that the assignment deed was a manufactured document, as when it was executed, the trademark had expired.
Therefore, Indian courts are hesitant to recognize backdated assignment agreements, often viewing them as sham documents.
The United States
The United States Patent and Trademark Office (USPTO) acknowledges retroactive assignments of trademarks and patents, including nunc pro tunc agreements as a form of conveyance. Among the various types of conveyance deeds listed by the USPTO, nunc pro tunc agreements require an additional detail: the specification of the effective date for the transfer.
The courts in the United States have taken varying positions on the use of nunc pro tunc agreements. In Abraxis Bioscience, Inc. v. Navinta LLC (2010), the plaintiff filed an infringement suit without holding the patent’s legal title. Although a nunc pro tunc agreement was executed to address this issue, the court rejected it, asserting that the plaintiff must possess the legal title at the time of filing.
Similarly, in Alps South LLC v. Ohio Willow Wood Co. (2015), the court held that while nunc pro tunc agreements may correct certain defects, executing such an agreement after a case has been filed does not have the intended effect.
A similar position was taken in In re CTP Innovations, LLC (2016). In this case, Banta originally held the patent rights before being acquired by RR Donnelley. Although no formal assignment agreement was made between Banta and RR Donnelley, Donnelley still assigned the patent rights to Media, which later transferred them to CTP. Therefore, when CTP filed its infringement suit, it did not have any legal title in the patent. To address this, Banta Corporation executed a nunc pro tunc assignment with RR Donnelley, making it retroactively effective to a date before the patent was transferred from Donnelley to Media and Media to CTP. However, the court found this ineffective because, at the time when Donnelley assigned the rights to Media, Donnelley itself didn’t have any rights in the patent.
Conversely, in Narita Export LLC v. Adaptrend, Inc. (2022), the court accepted the use of a nunc pro tunc agreement. The plaintiff, seeking cancellation of the defendant’s trademark due to a likelihood of confusion with its own mark “TONOSAMA,” was required to prove first use. For which the plaintiff claimed a priority of March 27, 2016, however, at that time the trademark was rather owned by TI Express and not the plaintiff. Hence, the plaintiff was required to establish a chain of titles from TI Express. So, TI Express executed a nunc pro tunc trademark assignment in favor of the plaintiff with an effective date of November 25, 2016, formalizing an earlier oral agreement that assigned the trademark and its associated goodwill. This was allowed by the courts as there was little but evidence of first and continuous use of the trademark.
Conclusion
While this article focuses on India and the United States, it is worth noting that other jurisdictions such as Mauritius have also developed distinct frameworks governing the transfer and enforcement of intellectual property rights, particularly in cross-border and investment-driven transactions.
In conclusion, nunc pro tunc agreements are not valid in India, as the Indian courts view them with skepticism as potentially frivolous or in bad faith. While in the United States, USPTO has recognized such agreements, but the US courts are careful assessing their validity on a case-by-case basis to prevent misuse. Given the potential for abuse, such as manipulating priority dates or fabricating ownership, the US courts exercise caution to ensure that nunc pro tunc agreements are not exploited to undermine the integrity of intellectual property law and are used in an effective manner to promote the growth of IPRs.
Written by Khushee, an assessment intern at Intepat IP.