I. Current issues relating to license agreements for the transfer of trademark use rights

Today, many enterprises have become increasingly aware of intellectual property rights. In the process of trademark franchising, the parties commonly implement license agreements.

Such a form of agreement has become increasingly popular, as trademark owners often seek to expand market share, enhance brand recognition, and access potential customers or partners. The right to use a trademark is limited to a specific territory and duration, based on the terms and conditions agreed upon by the parties in the license agreement.

II. Legal regulations governing license agreements for the transfer of trademark use rights

1. What is a trademark license agreement for the transfer of trademark use rights?

A license agreement for the transfer of trademark use rights is a legal agreement whereby the trademark owner (the licensor) permits another organization or individual (the licensee) to use its trademark within a specified scope, duration, and under specific conditions. Such an agreement must be made in writing and comply with the provisions of the Law on Intellectual Property, in particular Articles 141 and 144 of the Law on Intellectual Property 2005, as amended and supplemented in 2022, as well as Article 117 of the Civil Code 2015. Such a type of agreement serves as an effective instrument for enterprises to expand their markets and enhance brand recognition.

2. Conditions for implementing the license agreement for the transfer of trademark use rights

In order to implement the license agreement, the following conditions must be satisfied:

  • Subject: The licensor must be the lawful owner of the trademark (holding a valid certificate of protection) or a party that has been lawfully granted the right to use the trademark.
  • Object: The licensed trademark must fall within the scope of lawful protection in the territory of Viet Nam or the relevant jurisdiction.
  • Form: The agreement must be made in writing and contain the principal contents as prescribed in Article 144 of the Law on Intellectual Property.
  • Legal restrictions: Certain rights, such as collective trademarks, may not be licensed to entities that are not members, according to Article 148 of the Law on Intellectual Property.

3. Sample license agreement for the transfer of trademark use rights

Below is the sample license agreement for the transfer of trademark use rights:

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness

LICENSE AGREEMENT
FOR THE TRANSFER OF TRADEMARK USE RIGHTS

This Agreement is made on … day of … 2024 at the representative office of Company …, by and between the following parties:

Party A:

Company Name: ……………………………………………………………………………
Address: ……………………………………………………………………………………
Telephone: …………………………………………………………………………………
Represented by: ……………………………………………………………………………
Position: ……………………………………………………………………………………

(Hereinafter referred to as the “Licensor”)

Party B:

Company Name: ……………………………………………………………………………
Address: ……………………………………………………………………………………
Telephone: …………………………………………………………………………………
Represented by: ……………………………………………………………………………
Position: ……………………………………………………………………………………

(Hereinafter referred to as the “Licensee”)

ARTICLE 1: LICENSE OF TRADEMARK USE RIGHTS

The Licensor agrees to grant the Licensee the right to use the trademark that has been registered and protected in Viet Nam, with the following details:

Trademark: ………………………………………………………………………………
Application No.: ……………………………………………………………………………
Scope: Business consultancy services, development strategy formulation, and brand promotion.

ARTICLE 2: SCOPE OF LICENSE

Form of license: Non-exclusive license.
Territory: Entire territory of ………
Term: Five (05) years from the date on which the Agreement is confirmed by the Intellectual Property Office of Viet Nam.

ARTICLE 3: LICENSE FEE AND PAYMENT

License fee: ...................................... VND
Method of payment: Bank transfer within seven (07) days from the date of signing this Agreement.
Tax obligations: The Licensee shall be responsible for all taxes arising from this Agreement.

ARTICLE 4: RIGHTS AND OBLIGATIONS OF THE PARTIES

Licensor has the rights to:

  • Ensure lawful ownership of the trademark and that the trademark is free from disputes.
  • Provide assistance to the Licensee in registering the Agreement with the Intellectual Property Office of Viet Nam.

Licensee has the rights to:

  • Fulfill all financial obligations and pay the costs of registration of the Agreement.
  • Use the trademark strictly within the agreed scope.

ARTICLE 5: REGISTRATION, EFFECTIVENESS, AND TERMINATION OF THE AGREEMENT

This Agreement shall take effect from the date it is confirmed by the Intellectual Property Office of Viet Nam.

The Agreement may be terminated prior to its expiry in the following cases:

  • The parties mutually agree to terminate the Agreement.
  • One party commits a serious breach of its contractual obligations.

ARTICLE 6: DISPUTE RESOLUTION

Any dispute arising out of or in connection with this Agreement shall be resolved through negotiation. If no agreement can be reached, the dispute shall be submitted to the competent court at the place where the defendant has its headquarters. 

REPRESENTATIVE OF THE LICENSOR
(Full name, position, signature, and seal)

III. Questions relating to license agreements for the transfer of trademark use rights

1. Is registration of the license agreement mandatory?

A license agreement for the transfer of trademark use rights is not required to be registered in order to be legally effective between the contracting parties. Pursuant to Article 148 of the Law on Intellectual Property as amended in 2019 and 2022, agreements on the use of industrial property objects, including trademark license agreements, take effect in accordance with the agreement of the parties.

However, a license agreement shall not have legal effect against a third party unless it is registered with the state authority in charge of industrial property rights, unless otherwise agreed by the parties or otherwise provided by law. Therefore, in order to protect their rights in case of disputes with third parties, the parties are generally advised to register the license agreement with the Intellectual Property Office of Viet Nam.

Such registration not only enhances transparency of rights but also provides a stronger legal basis when it is necessary to prove the right to use the trademark.

2. Is notarization mandatory for the license agreement?

Under Vietnamese law, a license agreement for the transfer of trademark use rights is not required to be notarized. According to the Law on Intellectual Property, the license agreement takes effect based on the agreement of the parties without the need for notarization or certification. Nevertheless, if the parties deem it necessary, notarization may be implemented to enhance legal certainty and protect their interests, especially in cases where the agreement involves substantial value or a higher risk of dispute.

Even without notarization, the agreement must still be made in writing, with clear and well-structured contents and signatures of duly authorized representatives. If the agreement is registered with the Intellectual Property Office of Viet Nam, it must comply with the statutory requirements regarding form and content. Accordingly, notarization is not mandatory but may increase legal security when necessary.

3. What conditions apply to license agreements transferring trademark use rights from abroad into Viet Nam?

When transferring the right to use the trademark from abroad into Viet Nam, the following conditions must be satisfied:

  • The trademark must be protected in Viet Nam through national registration or international registration under international treaties to which Viet Nam is a member.
  • The license agreement must comply with Vietnamese law, including requirements on content and form under the Law on Intellectual Property.
  • If necessary, the agreement should be translated into Vietnamese and registered with the Intellectual Property Office of Viet Nam.

IV. Legal consultancy services relating to license agreements for the transfer of trademark use rights

The above constitutes all detailed information provided by NPLaw to assist clients with issues relating to license agreements for the transfer of trademark use rights. Should you have any questions regarding the above matters or other legal issues, please contact NPLaw promptly so that our team may directly provide consultation and guidance.