Content of Licensing Contracts According to Vietnamese Law

In the current context of globalization and international economic integration, intellectual property has become increasingly important in production, business activities, and determining the competitive capacity of enterprises in the market. As a form of property, the rights of industrial property owners can also be bought, sold, or transferred on the market. The transfer of these rights is carried out through licensing contracts. So, what is a licensing contract, and how can one draft content of licensing contracts under Vietnamese law?

What is a Licensing Contract?

Owners of industrial property rights have exclusive rights to use the objects of those industrial property rights within the protection period and throughout the territory of Vietnam. Other organizations or individuals wishing to use these industrial property rights within the protection period must obtain permission from the owner. This permission is expressed in a written contract called a “transfer of the right to use the object of industrial property rights” or simply a “licensing contract.”

Therefore, a licensing contract is a contract that transfers the right to use the objects of industrial property rights. In this contract, the organization or individual with exclusive rights to use an object of industrial property rights (the licensor) allows other organizations or individuals (the licensee) to use that object of industrial property rights.

Characteristics of Licensing Contracts

– The licensor is the owner of the industrial property rights being protected in Vietnam.

– The object of the licensing contract is one of the objects of industrial property rights, including inventions, useful solutions, industrial designs, integrated circuit layout designs, trademarks, and business secrets.

– The owner of the industrial property rights only transfers the right to use the object and does not transfer ownership of that object.

– Licensing contracts are limited to the territory of Vietnam and the duration of protection.

Classification of Licensing Contracts in Vietnam

Licensing contracts in Vietnam include the following types:

Exclusive Licensing Contract

This contract transfers the right to use an object of industrial property rights exclusively to the licensee within a specified scope and duration. The licensor cannot sign another licensing contract for the same object with any other organization or individual without the licensee’s exclusive permission. The licensee can further transfer the right to use the object to a third party within the scope and duration specified in the contract.

Non-Exclusive Licensing Contract

In this type of contract, the licensor allows the licensee to use the object of industrial property rights within a specified scope and duration. Unlike exclusive licensing, the licensor can also sign non-exclusive licensing contracts with other third parties.

Sub-Licensing Contract

This contract involves the transfer of the right to use an object of industrial property rights, where the licensor is not the owner but has obtained the right to use the object through a prior licensing contract.

Content of Licensing Contracts According to Vietnamese Law

Content of licensing contracts must include the following essential provisions:

– Names and addresses of the licensor and the licensee of the industrial property rights.

– Basis for transferring the right to use the industrial property rights: Confirmation that the licensor has the right to grant the license, either as the owner or as an exclusive licensee.

– Object of the licensing contract: Details of the industrial property rights object being transferred, including the granted certificate, territorial scope, and the validity period of that certificate.

– Type of licensing contract: Exclusive, non-exclusive, or sub-licensing.

– Scope of the right to use: Limitations on the actions the licensee is permitted to perform (either partial or full use of the rights, as per legal regulations), and the territorial scope of the right to use.

– Duration of the transfer: The duration of the right to use, also known as the licensing period.

– Transfer price, duration, and payment method: In cases of free licensing, these details should be clearly stated in the contract.

– Rights and obligations of the licensor and the licensee.

Content Not Allowed in Licensing Contracts According to Vietnamese Law

In licensing contracts, parties are not allowed to agree on unreasonable restrictions on the rights of the licensee. Such provisions will be considered void. Prohibited provisions in licensing contracts include:

– Provisions that prohibit the licensee from making improvements to the transferred industrial property object (except for trademarks) or require the licensee to transfer improvements to the licensor for free.

– Provisions that directly or indirectly restrict the licensee from exporting goods or services produced under the licensing contract to territories where the licensor does not hold corresponding industrial property rights or where there is no exclusive import right.

– Provisions that require the licensee to purchase raw materials, components, or equipment from the licensor or a third party designated by the licensor without aiming to ensure the quality of the goods or services produced by the licensee.

– Provisions that prohibit the licensee from challenging the validity of the transferred industrial property rights or the licensor’s right to transfer.

Registering Licensing Contracts in Vietnam

To register a licensing contract in Vietnam, the following documents are required:

1/ Registration request form (according to the provided template).

2/ Licensing contract.

3/ Written consent of co-owners regarding the transfer of the right to use (if the industrial property rights are jointly owned).

4/ Power of attorney (if the application is filed through a representative organization).

5/ Copy of the fee receipt.

Guidance on Licensing Contracts in Vietnam

Intellectual Property Service in Vietnam

We are a professional organization operating in the field of Intellectual Property in Vietnam. With a team of lawyers holding specialized training certificates in the field of intellectual property, we take pride in providing services related to intellectual property in Vietnam for domestic and foreign organizations and individuals at reasonable costs.

Contact us now for advice and assistance in quickly and professionally completing the procedures related to intellectual property in Vietnam.

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