How Trademark License Agreement in Vietnam Works?

 

What is trademark license agreement in Vietnam?

A trademark license agreement in Vietnam is a contract between the owner of a trademark (the licensor) and another party (the licensee) that allows the licensee to use the trademark in Vietnam in exchange for a fee. The agreement should specify the scope of the license, including the products or services that the licensee is allowed to use the trademark on, the territory in which the license is valid, and the duration of the license.

Trademark license agreements in Vietnam is governed by the IP Law in Vietnam. The law requires that trademark license agreements be in writing and that they be registered with the National Office of Intellectual Property of Vietnam (NOIP) in order to be enforceable against third parties.

What type of trademark license agreement in Vietnam?

Types of trademark license agreements in Vietnam include: Exclusive trademark license agreement and non-exclusive trademark license agreement.

Exclusive trademark license agreement 

In an exclusive license, the licensor grants the licensee the exclusive right to use the trademark in Vietnam for the duration of the license.

Non-exclusive trademark license agreement

In a non-exclusive license, the licensor retains the right to use the trademark in Vietnam alongside the licensee.

What are benefits of trademark license agreement in Vietnam?

Trademark license agreements can be a useful way for businesses to expand their reach and brand awareness into new markets. They can also be a way for businesses to generate additional revenue from their trademark assets.

Trademark license agreement in Vietnam could bring great benefits as following:

• Additional revenue
• Territorial expansion
• Benefits from others’ manufacturing, sales, distribution, marketing skills
• New channels of distribution
• Discontinued marks
•  Strategic partnerships
• Convert a trademark infringer into a partner
• Increase consumer recognition and advertising

How royalties are regulated in trademark license agreement in Vietnam?

Written Agreement

A trademark license agreement must be in writing and clearly stipulate the terms and conditions, including the amount of royalties or fees to be paid.

Types of Royalties

Royalties in trademark license agreements can be calculated in various ways, such as a fixed amount, a percentage of net sales, or a combination of both.

Royalty Calculation Methods

License agreements may specify different methods for calculating royalties. These methods can include gross sales, net sales, or other agreed-upon criteria. The chosen method should be clearly outlined in the agreement.

Reporting and Payment

The agreement should stipulate the reporting and payment procedures for royalties. Payments must be made in accordance with the terms specified in the agreement.

Taxation

Royalties are subject to taxation in Vietnam. The licensor is generally responsible for withholding and paying the relevant taxes to the Vietnamese government.

Registration and Recordation

Certain trademark license agreements may need to be registered or recorded with the NOIP to ensure their legal validity and enforceability.

Enforcement

If the licensee fails to make royalty payments or breaches the terms of the agreement, the licensor has the right to enforce the agreement through legal means, including initiating litigation.

Dispute Resolution

The agreement should outline the dispute resolution mechanism in case of conflicts between the parties, such as mediation or arbitration.

Termination and Consequences

The agreement should specify the conditions under which it can be terminated and the consequences of such termination. This includes whether the licensee can continue using the licensed trademark or whether it must cease use upon termination.

Protection of Trademarks

The agreement should address issues related to trademark protection, ensuring that the licensee uses the trademark correctly and takes measures to protect its integrity and reputation.

It’s important for parties entering into trademark license agreements in Vietnam to seek legal advice to ensure compliance with Vietnamese law and to draft comprehensive, well-defined agreements that protect the interests of both parties. Consulting with legal experts and experienced intellectual property attorneys in Vietnam can help facilitate a smooth and legally compliant trademark licensing process.

How ANT Lawyers – IP agent in Vietnam could help?

If you are considering licensing your trademark in Vietnam, it is important to consult with an experienced IP lawyers to ensure that the license agreement is properly drafted and registered.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance while doing business in Vietnam.