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Other questions on license related matter in Vietnam

1.What are forms/types of IP licensing agreement under Vietnam IP Law?

KENFOX: As provided under Article 143 of Vietnam IP Law, forms/types of industrial property object license contracts/agreement shall be of the following types:

(1) Exclusive contract means a contract under which, within the licensing scope and term, the licensee shall have the exclusive right to use the licensed industrial property object while the licensor may neither enter into any industrial property object license contract with any third party nor, without permission from the licensee, use such industrial property object.

(2) Non-exclusive contract means a contract under which, within the licensing scope and term, the licensor shall still have the right to use the industrial property object and to enter into a non-exclusive industrial property object license contract with others.

(3) Industrial property object sub-license contract means a contract under which the licensor is a licensee of the right to use such industrial property object pursuant to another contract.

2.What are required contents of industrial property object license contracts under Vietnam IP Law?

KENFOX: Per Article 144 of Vietnam IP Law, an industrial property object license contract must contain the following principal contents:

 (a) Full names and addresses of the licensor and of the licensee (The identity of the Licenser and Licensee);

 (b) Grounds for licensing (Details of the objects to be licensed (information on granted trademark registration or patent);

 (c) Contract type;

 (d) Licensing scope including limitations on use right and territorial limitations:

  • Exclusive or Non-exclusive;
  • Object(s) of license;
  • Territory of license (Vietnamese territory or part thereof);
  • Term of license (within the balance of the term of validity of the corresponding Patent for Invention/Utility Solution/Industrial Design or Certificate of Trademark Registration).

(In case of a sub-license, the scope of the sub-license must fall within the scope of the corresponding exclusive license).

(dd) Contract term;

(e) Licensing price (Price of license and mode of payment). It must be stated if the assignment/license is granted free of charge.

(g) Rights and obligations of the licensor and of the licensee.

(h) Conditions for amendment, termination and invalidation of the Agreement;

(i) Method for settlement of disputes;

(j) Date and place of signing (Signatory date and place);

(k) Signatures of the authorized representatives of each party.

3.What are required documents for recordal of an IP licensing agreement/contract under Vietnam IP Law?

KENFOX: The following documents are required to provide us the following documents for recordal an IP licensing agreement/contract under Vietnam IP Law:

(i) Two (2) originals or two (2) certified copies of the signed License Agreement;
(ii) Copy of Patent for Invention/Utility Solution/ Industrial Design or Certificate of Trademark Registration of the licensed object(s);

(iii) A notarized copy of Business License/Investment License if the Licensee is a Vietnamese entity;
(iv) A signed Power of Attorney from the Licenser or Licensee.

Notes:

  • To license an IP object in Vietnam, such object must be already protected in Vietnam, i.e. it has been granted patents or certificates of registration in Vietnam. The IP objects which have not registered in Vietnam cannot be licensed.
  • The scope of license agreement/contract cannot be broader than that of protection granted under the respective Patent or Trademark Registration Certificate (for example, for trademarks, the assignor can only assign the rights conferred by Trademark Registration Certificate, i.e. assignment is only possible for the trademark, exact goods and/or services claimed under the registration valid at the time of assignment).
  • The assignor or licensor must guarantee that he or she is the registered owner of the assigned/licensed object in Vietnam and that the assignment/license must not result in dispute with a third party. If dispute arises from the assignment/license of an IP object, the assignor/licensor shall be responsible for settlement.
  • The License Agreement must be recorded with Vietnam IP Office to be legally effective and enforceable in Vietnam.
  • The request for recordal of the License Agreement/Contract should be submitted within 60 days from the signing date.
  • If the License Agreement/Contract is executed in English only, the Vietnamese translation of the Agreement is required. The Vietnamese translation must be certified by a Notary Public in Vietnam. We can provide translation service.
  • If the Agreement is executed in English only, the Vietnamese translation of the Agreement is required. The Vietnamese translation must be certified by a Notary Public in Vietnam.
  • The License Agreement or Power of Attorney is not required to be notarized or legalized.

4.What mustn’t the licensor do/request the licensee to do under license contracts under Vietnam IP Law?

KENFOX: Per Article 144.2 of Vietnam IP Law, an industrial property object license contract must not have provisions which unreasonably restrict the right of the licensee, and in particular the following provisions which do not derive from the rights of the licensor:

(a) Prohibiting the licensee from improving the industrial property object other than marks; compelling the licensee to transfer free of charge to the licensor improvements of the industrial property object made by the licensee or the right of industrial property registration or industrial property rights to such improvements;

(b) Directly or indirectly restricting the licensee from exporting goods produced or services provided under the industrial property object license contract to the territories where the licensor neither holds the respective industrial property right nor has the exclusive right to import such goods;

(c) Compelling the licensee to buy all or a certain percentage of raw materials, components or equipment from the licensor or a third party designated by the licensor not for the purpose of ensuring the quality of goods produced or services provided by the licensee;

 (d) Prohibiting the licensee from complaining about or initiating lawsuits with regard to the validity of the industrial property rights or the licensor’s right to license.

Kindly note that any clauses in a contract falling into the cases stipulated in Article 144.2 of Vietnam IP Law shall be automatically invalid.

5.What are grounds for compulsory licensing of inventions under Vietnam IP Law?

KENFOX: Grounds for compulsory licensing of inventions are provided under Article 143 of Vietnam IP Law as follows:

1) In the following cases, the right to use an invention may be licensed to another organization or individual pursuant to a decision of the competent State body (i.e. The Ministry of Science and Technology) defined in Article 147.1 of this Law without permission from the holder of the exclusive right to use such invention:

 (a) Where the use of such invention is for public and non-commercial purposes or in service of national defence and security, disease prevention, and treatment and nutrition of people or other urgent needs of society;

 (b) Where the holder of the exclusive right to use such invention fails to fulfil the obligations to use such invention stipulated in Article 136.1 and Article 142.5 of this Law upon the expiration of four years as from the date of filing the application for registration of the invention, or the expiration of three years as from the date of granting the invention patent;

 (c) Where a person who wishes to use the invention fails to reach an agreement with the holder of the exclusive right to use such invention or on entry into an invention license contract in spite of efforts made within a reasonable time for negotiating a satisfactory commercial price and conditions;

 (d) Where the holder of the exclusive right to use such invention is deemed to have performed anti-competitive practices prohibited by the law on competition.

2) The holder of the exclusive right to use an invention may request termination of the use right when the grounds for licensing stipulated in clause 1 of this article no longer exist and are unlikely to recur, provided that such termination shall not be prejudicial to the licensee of the invention.

6.What are authority and procedures for compulsorily licensing of an invention under Vietnam IP Law?

KENFOX: Under Article 147 of Vietnam IP Law, authority and procedures for compulsorily licensing of an invention pursuant to a decision are provided as follows:

  1. The Ministry of Science and Technology shall issue decisions on licensing of inventions based on a consideration of requests for licensing in the cases stipulated in sub-clauses (b), (c) and (d) of article 145.1 of this Law.

Ministries and ministerial equivalent bodies shall, after consulting the opinion of the Ministry of Science and Technology, issue decisions on licensing of inventions in domains under their respective management in the case stipulated in sub-clause (a) of article 145.1 of this Law.

  1. Decisions on licensing of inventions must set out appropriate use scope and conditions according to the provisions of article 146 of this Law.
  2. The State body competent to decide on licensing of an invention must promptly notify its decision to the holder of the exclusive right to use such invention.
  3. A decision on licensing of an invention or on refusal to license an invention may be subject to a complaint or lawsuit in accordance with law.

Please feel free to contact us for more details.

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