Legal regulations on license contracts

Legal Basis

Consolidated document No. 11/VBHN-VPQH dated July 8, 2022 consolidating the Intellectual Property Law.
Decree No. 103/2006/ND-CP of the Government detailing and guiding the implementation of a number of articles of the Intellectual Property Law on industrial property;
Decree No. 122/2010/ND-CP of the Government amending and supplementing a number of articles of Decree No. 103/2006/ND-CP.

What is license contract?

A license contract is understood as a written agreement that the owner of intellectual property rights (licenser) allows another person (licensee) to use the intellectual property rights, while the licensor continues to own those rights. The two parties agree to allow the use of rights related to intellectual property, especially regarding the territorial scope, purpose, and term of transfer of use rights.

Subject of the license contract

According to the provisions of Article 141 and Article 142 of the Intellectual Property Law, the subjects of this type of contract include:

Intellectual property rights: For example, inventions, works, trademarks, industrial designs, layout designs, trade secrets, trademarks,etc.
Rights to technology: For this subject, the licensee must prove that he or she is the exclusive owner of the above intellectual property, that is, must be granted a certificate by a competent state agency. Protection such as patents, certificates of registration of semiconductor integrated circuit designs, utility solution patents, etc.

Classification of license contracts

According to Article 143 of the Intellectual Property Law, licensing contracts are divided into 3 types, including:

Exclusive license contract is the type under which the licensor is not allowed to sign a contract to use the industrial property object with any other third party and can only use the industrial property object. that business with the permission of the licensee. At the same time, the transferee will have the exclusive right to use the industrial property object within the scope and duration of the transfer.
Non-exclusive license contract is a contract under which the licensor is the person who is transferred the right to use that industrial property object under another contract.
Secondary license contract: this is a contract under which the licensor is the person who is transferred the right to use that industrial property object under another contract.

In addition, according to its voluntary nature, this contract is also divided into two different types:

Voluntary license contract is a contract to transfer the right to use an industrial property object according to the wishes of the owner of the object. The owner can optionally transfer to any object without being forced to do so.
Compulsory license contract means an individual or organization holding the exclusive right to use an invention is forced to transfer the right to use that invention to another individual or organization according to a decision of the agency. competent authority without the consent of the holder of the exclusive right to use that invention in cases such as for medical, security, national defense, non-commercial purposes, etc. according to the law.

Content of the license contract

The license contract must ensure all necessary contents according to the provisions of law. These contents have been clearly stipulated in Article 144 of the Intellectual Property Law, including:

Full names and addresses of the transferor and franchisee.
Basis for transfer of use rights
Object of the contract
Contract form
Scope of transfer of use rights: limits on usage rights, territorial limits, or limits on selling price.
Contract term
Usage transfer price and payment method (full package or by period)
Rights and obligations of the parties transferring the rights and receiving the rights
Resolving disputes between two parties: It is difficult to determine in advance issues that may cause trouble for any party during the validity period of the license contract. Therefore, dispute issues and necessary dispute resolution must be stipulated in the contract.
Signatures of representatives of the parties

Validity of license contract

– For industrial property objects with grounds for establishing rights based on decisions to grant protection titles, ownership rights to famous trademarks as prescribed in Point a, Clause 3, Article 6 of the Law on Intellectual Property, industrial property rights transfer contracts are only valid when they have been properly registered at state management agencies on industrial property rights.

– For industrial property objects that have a basis for establishing rights based on the decision to grant a certificate of protection, ownership rights to famous trademarks according to the provisions of Point a, Clause 3, Article 6 of the Law on Property intellectual property rights, industrial use rights transfer contracts are only valid according to the agreement of the parties. Except for trademark use contracts, other license contracts must be registered at the state management agency for industrial property rights to be considered legally valid for third parties.

Thus, the license contract will be effective according to the agreement of the parties. If a third party participates, this contract needs to be registered at the state management agency for industrial property rights to be considered. is legally valid for third parties.