Other questions on license related matter in Vietnam
1. What are the types of IP licensing agreements under Vietnam IP Law?
KENFOX: Pursuant to Article 143 of the Vietnam Intellectual Property Law, licensing agreements (license contracts) for industrial property objects (such as trademarks, patents, industrial designs, etc.) may take the following forms:
(1) Exclusive License Agreement: This is a contract whereby, within the agreed scope and duration of the license, the licensee is granted the exclusive right to use the licensed industrial property object. The licensor is not allowed to grant any further licenses to third parties nor to use the licensed object themselves without the licensee’s consent.
(2) Non-Exclusive License Agreement: Under this form, the licensee is permitted to use the licensed industrial property object, but the licensor retains the right to continue using it and may also grant licenses to other parties.
(3) Sub-License Agreement: This contract is formed when the licensor (i.e., the person granting the license) is not the owner, but a licensee themselves under a prior license agreement. The sub-license must be expressly authorized by the original license agreement or the owner of the industrial property rights.
These types of licensing agreements provide flexibility in structuring rights and obligations between licensors and licensees, and must comply with formalities and content requirements set forth under Vietnamese law.
2. What are required contents of industrial property object license contracts under Vietnam IP Law?
KENFOX: According to Article 144 of the Vietnam Intellectual Property Law, an industrial property object license contract must include the following mandatory contents:
(a) Parties to the Contract: Full names and addresses of the licensor and the licensee, serving to identify both parties.
(b) Grounds for Licensing: Detailed information about the licensed industrial property object, including the relevant protection title (e.g., patent, industrial design, trademark registration number and issuing authority).
(c) Type of License: The contract must specify whether the license is exclusive, non-exclusive, or a sub-license.
(d) Scope of the License: This includes:
- Objects of the license (e.g., specific trademark or invention);
- Territorial coverage (e.g., entire territory of Vietnam or specific regions);
- Permitted use and any restrictions;
- Term/duration of the license (which must not exceed the remaining term of protection of the licensed industrial property object);
- In the case of a sub-license, the scope must not exceed that of the original license.
(e) Term of the Contract: Clear specification of the start and end dates of the contract.
(g) Financial Terms: License fee, payment method, and whether the license is granted with or without charge.
(h) Rights and Obligations of the Parties: Detailed stipulation of the respective rights and responsibilities of the licensor and licensee.
(i) Modification and Termination: Conditions under which the contract may be amended, terminated, or rendered invalid.
(j) Dispute Resolution: Agreed method for resolving disputes, such as negotiation, mediation, arbitration, or litigation.
(k) Execution Details: Date and place of signing the agreement.
(l) Signatures: Signatures of the legally authorized representatives of both parties.
These contents are required to ensure that the license contract is valid under Vietnamese law and eligible for recordal with the Intellectual Property Office of Vietnam (IPVN), if necessary.
3. What documents are required for recordal of an IP licensing agreement under Vietnam IP Law?
KENFOX: To record an IP licensing agreement with the Intellectual Property Office of Vietnam (IPVN), the following documents are required:
Required Documents
- License Agreement: Two (02) originals or two (02) certified copies of the duly signed license agreement.
- Proof of IP Ownership: A copy of the Patent for Invention, Utility Solution, or Industrial Design, or the Certificate of Trademark Registration of the licensed object(s).
- Power of Attorney (POA): A signed Power of Attorney from either the Licensor or Licensee authorizing the IP agent to proceed with the recordal.
Important Notes
- Protected Status Required: The licensed IP object must have been granted protection in Vietnam (i.e., a patent or trademark registration must already exist). Unregistered IP rights cannot be licensed in Vietnam.
- Scope of License: The scope of the license must not exceed the rights granted under the corresponding protection title. For example, for trademarks, the license may only cover the specific mark and goods/services listed in the certificate valid at the time of licensing.
- Licensor’s Assurance: The Licensor must warrant that they are the registered owner of the licensed IP right in Vietnam and that the licensing will not result in any third-party disputes. If a dispute arises, the Licensor shall bear full responsibility for resolution.
- Recordal Requirement: Licensing agreements (except for trademarks) must be recorded with the IPVN to be legally effective and enforceable in Vietnam.
- Time Limit for Recordal: The request for recordal should be filed within 60 days from the date of signing the license agreement.
- Language Requirement: If the agreement is executed in English only, a Vietnamese translation certified by a Vietnamese Notary Public is required for submission. (Translation services can be provided upon request.)
- Notarization/Legalization: Neither the License Agreement nor the Power of Attorney is required to be notarized or legalized, unless otherwise specified for special circumstances.
4. What are the prohibitions imposed on licensors under IP license contracts in Vietnam?
KENFOX: Pursuant to Article 144.2 of the Vietnam Intellectual Property Law, an industrial property object license contract must not contain provisions that unreasonably restrict the rights of the licensee. Specifically, the following types of clauses—if not based on legitimate rights of the licensor—are prohibited and deemed invalid by law:
Prohibited Clauses in License Agreements:
Restrictions on Improvements
- Prohibiting the licensee from improving the licensed industrial property object (excluding marks); or
- Requiring the licensee to transfer, free of charge, any improvements or the right to register such improvements to the licensor.
Unjustified Export Restrictions
- Directly or indirectly limiting the licensee’s right to export goods or provide services produced under the license to territories where the licensor does not hold the corresponding IP rights or exclusive import rights.
Compulsory Purchasing Requirements
- Forcing the licensee to purchase all or a portion of raw materials, components, or equipment exclusively from the licensor or a third party designated by the licensor, unless it is objectively necessary to ensure the quality of licensed products or services.
Bar on Legal Challenge
- Preventing the licensee from challenging the validity of the licensed IP rights or the licensor’s right to license such rights through complaints or lawsuits.
Legal Consequence
Any contractual provision falling within the above categories shall be considered automatically null and void under Vietnamese law, even if mutually agreed upon by the parties.
5. What are the grounds for compulsory licensing of inventions under Vietnam IP Law?
KENFOX: Pursuant to Article 145 of the Law on Intellectual Property of Vietnam, compulsory licensing of an invention may be granted in the following circumstances:
(i) When the invention has not been used or has been insufficiently used by the owner without legitimate reasons, within four years from the filing date or three years from the granting date of the patent, whichever is later.
(ii) When the invention is deemed necessary to meet public demands for health protection, disease prevention, nutrition for the people, or to meet other urgent public needs.
(iii) When the invention is used to remedy anti-competitive practices as determined by a competent authority according to the Law on Competition.
(iv) When the use of the invention by the licensee is necessary to exploit another invention, and the licensee is unable to reach a commercial agreement with the owner of the first invention (i.e., dependent patent situations)
(v) When the licensee is a public agency or authorized third party, and the license is for non-commercial purposes, particularly for the public interest.
In all cases, the compulsory license must be non-exclusive and the licensee must pay the patent owner adequate remuneration, taking into account the economic value of the license.
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