Trademark licensing in Vietnam

Trademark owners who want to expand their production scale can engage in to transfer of the right to use a trademark to other businesses. According to the provisions of the Vietnamese Law on Intellectual Property, transferring the right to use an industrial property object means the owner of an industrial property right holder allowing another entity to use an industrial property object within the scope of their use right. The transfer of trademark use rights must be expressed in writing called a Trademark Use Contract (License Contract). In the article below, Viet An Law will advise on transferring trademark use rights, called trademark licensing in Vietnam.

The last updated license contract transferring right to use trademark

According to the provisions of Article 141.2 of the Intellectual Property Law 2005, amended and supplemented in 2009, 2019, and 2022, the transfer of trademark use rights must be done in the form of a written contract (the legal term is called A Trademark Use Contract, commonly known in business, is called a Trademark License Contract.

Classification of License contracts

License contracts include three types: Exclusive License Contract, Non-Exclusive License Contract, and Sub-license Contract.

Accordingly:

• An exclusive license contract is a contract under which the trademark owner is not allowed to sign a contract to transfer trademark use rights with any third party and is only allowed to use this trademark if permitted by the licensee. The licensee has the exclusive right to use the industrial property object within the scope and term of transfer.
• A non-exclusive contract is a contract under which, within the scope and term of the transfer of use rights, the licensor still has the right to use the trademark and the right to sign a non-exclusive contract to use trademark rights to others;
• A sub-license contract is a contract under which the licensor is the person who is transferred the right to use that trademark under another license contract.

Thus, trademark owners should clearly distinguish between 3 types of contracts to make accurate decisions, avoiding confusion that causes damage to the business. In addition, the license contract must ensure all contents as prescribed by law.

License contract template

In addition to the provisions on the full names and addresses of the licensor and the licensee, the contract content should note the following provisions:

Article []: Basis for licensing

The Licensor is the owner of the Trademark “[name]” protected for Groups of goods and services [classification] according to the Trademark Registration Certificate No. [title number] issued by the National Office of Intellectual Property issued on [date of grant] (“Trademark”).

Article []: Scope of license

Pursuant to this Contract, the Licensor agrees to license [contract type] to the Licensee to use [type of contract] Trademark for the Groups of goods and services listed in Appendix 1 – List Classes of Goods and Services covered under the License attached to this Contract.

(i) Limitation on use rights (if any)

(ii) Territorial limitations

The Licensee has the right to use the Trademark according to the territorial scope of the issued Trademark Registration Certificate.

(iii) Contract term

The Licensor agrees to license [contract type] for the Trademark to the Licensee for a period of [period] from [contract effective date].

Article []: Licensing price

The licensing price under this Contract is [amount] VND (in words: []). This price does not include VAT and other related taxes.

The costs of carrying out administrative procedures for the License under this Contract shall be paid by the Licensee.

Article []: Rights and obligations of the Licensee

(i) The Licensee has the right to:

• [Contract type] uses the licensed Trademark for its business purposes within the scope of the license specified in this Contract.
• Exporting and trading in products and services bearing the Trademark produced or provided by the Licensee. In case of export to countries where the Licensor has registered for Trademark protection, permission from the Licensor must be obtained.

(ii) The Licensee has the following obligations:

• Use the Trademark following the license scope stated in this Agreement.
• Carry out or cooperate with the Licensor to carry out necessary procedures to register this Contract according to the provisions of Vietnamese law on registration of license contracts and payment of related fees and charges regarding this registration.

Article []: Rights and obligations of the Licensor

(i) The Licensor has the right to: Enjoy the rights and benefits from the transfer equal to the licensing price paid under this Contract;

(ii) The Licensor is obliged to: Carry out all necessary procedures and pay relevant fees to register, maintain and/or extend the protection validity of the Trademark in Vietnam according to regulations to create conditions for the Licensee to use the Trademark throughout its operations.

Note on the validity of the License contract

Effective with the third party

Previously, Vietnamese intellectual property law required that registration with the Vietnam National Office of Intellectual Property is the condition for the legal value of a trademark license contract with a third party. Since 2019, along with the introduction of the Intellectual Property Law amended in the same year, to meet international integration requirements in new generation conventions such as CPTPP and EVFTA, Vietnam Intellectual Property Law has waived this provision. Accordingly, Article 148 currently stipulates:

“ Article 148. Effect of industrial property rights transfer contracts

[…]

2. For types of industrial property rights granted based on registration […] the contract to use the industrial property object is effective according to the agreement between the parties.

3. Contracts for use of industrial property rights specified in Clause 2 of this Article, except for trademark use contracts, shall be registered with an industrial property rights authority to be valid for third parties.”

The validity of a License contract does not depend on registration as a contract to transfer trademark ownership but arises based on the agreement between the parties. However, in practice, when transferring trademark use rights, the parties should register the License contract to avoid disputes.

Conditions are void license contract

• According to the nature of the scope of the right to use the trademark, the trademark license contract will automatically terminate if the licensor’s trademark rights are terminated. The validity of the License contract depends on the validity of the trademark protection title and the transfer of use rights can only be carried out within the scope of trademark protection.
• In addition, the license contract must not contain terms that unreasonably restrict the rights of the Licensee, especially terms that do not stem from the licensor’s right to use the trademark as stipulated in Article 144.2 Intellectual Property Law 2005, amended and supplemented 2009, 2019, 2022. Containing these provisions will result in invalidity.

Licensing principles transfer the right to use a trademark

When transferring trademark use rights, parties should note:

• Scope of licensing: Usage rights are only transferred within the scope of the licensor’s rights.
• Collective trademark licensing: The right to use a collective trademark may not be transferred to organizations or individuals that are not members of the collective trademark owner.
• Sub-license: The licensee is not allowed to enter into a secondary contract with a third party unless permitted by the Licensor.
• Obligation to label: The party licensed to use the trademark must write instructions on the goods and packaging that the goods are produced under the trademark use contract.

New trademark license contract registration dossier apply from August 2023

• Declaration for registration of trademark transfer contract according to the latest updated form in 2023 according to Decree 65/2023/ND-CP according to the form below:

• License contract (original or valid copy); If the contract is made in a language other than Vietnamese, it must be accompanied by a translation of the contract into Vietnamese; If the contract has many pages, each page must have the parties’ signatures or seals (Quantity: 02)
• Written agreement of the co-owners on the transfer of rights to use the industrial property object, if the corresponding industrial property rights are jointly owned;
• Power of attorney (if applying through Viet An Law representative);
• Copy of fee payment voucher (in case of payment of fees and charges via postal service or direct payment to the National Office of Intellectual Property account)

After receipt, the National Office of Intellectual Property will process the dossier and issue a Certificate of registration of the licensing trademark contract. In case the dossier contains errors, the National Office of Intellectual Property will issue a notice of intention to refuse contract registration or a notice of refusal to register the contract (if the errors are not corrected). The procedure takes 2-6 months to apply to the National Office of Intellectual Property.

Intellectual property consulting services of Viet An Law

• Legal advice on procedures for transferring trademark use rights;
• Drafting documents and representing clients to carry out procedures at the National Office of Intellectual Property;
• Submit documents and monitor progress at the National Office of Intellectual Property;
• Exchange and provide information to customers during the procedure implementation process.

Clients who need to carry out trademark licensing procedures in Vietnam, please contact Viet An Law Firm for the best support!