Date: 28-07-2019 by: Banca IP Law Firm
Everything you need to know about licensing of IPR in Vietnam (2)
Licensing of an industrial property right (IPR) means the permission of the industrial property owner given to another organization or individual to use the IPR within the scope of the owner’s use right. The licensing of an IPR must be conducted in the form of a written contract (hereinafter referred to as license contract for use of IP object). The licensee shall not enter into a sub-license contract with any other third party without permission of the licensor. A mark licensee shall have the obligation to indicate on goods and packaging thereof that the goods have been produced under a contract for use of mark.
Restrictions to licensing of IP objects
- Geographical indication: The right to use a geographical indication or a trade name shall not be licensed.
- Collective mark: The right to use of a collective mark shall not be licensed other than members of the collective mark owner.
Minimum contents must be included in the licensing contract to use of IPR in Vietnam
A license contract for use of industrial property object shall have the following substantial provisions:
- Full name and address of the licensor and the licensee;
- Bases of the license;
- Type of the contract;
- Scope of the license (limitations to use; territorial limitations);
- Term of license;
- Price for the license;
- Rights and obligations of the licensor and the licensee.
License contracts for use of IPR must be one of the following types:
1, Exclusive license contract: the licensee has an exclusive right to use the IP object while the licensor can neither conclude any license contracts for use of IP object with any third party nor, without permission of the licensee, use the IP object;
2, Non-exclusive license contract: the licensor still has the rights both to use the IP object and also to conclude non-exclusive contracts with others.
3, Sub-license contract: a contract the licensor of which is a licensee of the IP object under another contract.
In addition, during drafting and negotiating the contract’s articles, both 2 sides must take into account that the license contract shall not have such provisions that unreasonably restricts the right of the licensee, particularly those provisions as follows:
1, Prohibiting the licensee to improve the IP object other than marks; compelling the licensee to grant a free license or to assign to the licensor the right to IP registration or an IPR in respect of such improvements;
2, Directly or indirectly restricting the licensee to export goods produced or services supplied under the license contract for use of IP object to the territories where the licensor neither hold the respective IPR nor has the exclusive right to import such goods;
3, Compelling the licensee to buy all or a given percentage of materials, components or equipments from the licensor or the persons designated by the licensor without aiming at ensuring the quality of goods produced or services supplied under the licensee;
4, Prohibiting the licensee from contesting validity of the IPR or the right to license.
Is necessary to register the license contract for use of IPR at the National Office of Vietnam IP (NOIP)?
Under the current provision of IP Law, for the IPRs established on the basis of registration of the Law, a contract for use of IP object shall be effective as agreed by the parties but shall only be effective to a third party upon registration with the state administration authority of IPRs. However, the registration of IPR’s license contract is no longer compulsory and necessary when the Vietnam’s participation into CPTPP agreement although there is still no specific guidance or regulation until now. Moreover and of course, the validity of a licensing contract for use of IP object shall be terminated ex-officio upon the termination of licensor’s IPR.
For further consultation on specific IP object and specific case, please consider our 20-year experience IP agent with extensive expertise in handling several cases of licensing, we shall definitely help you and your company proceeds successfully at a very cost-effective basis.
For assignment of IPR in Vietnam, please refer to our first guidance HERE.
Banca IP Law Firm