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Differentiating “assignment” and “licensing”of industrial property rights in Vietnam

Transfer of industrial property rights in Vietnam comprises 02 forms:

(1) Assignment of industrial property rights and;

(2) Licensing of industrial property rights.

How to differentiate the assignment and licensing of industrial property rights as statutorily provided in Vietnam? You may find the key differences between these two types of transfer of industrial property rights in the below table.

Criteria ASSIGNMENT OF INDUSTRIAL PROPERTY RIGHTS LICENSING OF INDUSTRIAL PROPERTY RIGHTS
Definition Assignment of an industrial property right means the transfer of ownership right by the owner of such industrial property right to another organization or individual. Licensing of an industrial property object means permission by the owner of such industrial property object for another organization or individual to use the industrial property object within the scope of the owner's right. 
Nature The assignor will terminate his ownership right over the industrial property subject matters and such ownership right will be established for the assignee. The licensee is only entitled to use the right to use the industrial property subject matters without holding ownership right thereof.
Holder The assignor must be the owner of the industrial property subject matters The licensor may be either (i) the owner of the industrial property subject matters or (ii) the one who is the licensed by the first licensor under another contract for transfer of industrial property rights (in the form of sub-licence contract)
Name of the contract An assignment of an industrial property right must be effected in the form of a written contract which is referred to as “an industrial property right assignment contract” Licensing of industrial property objects must be established in the form of a written contract which is referred to as “as industrial property object licence contract”
Types of industrial property right transfer contract Only one type of contract in which the assignor will terminate his ownership right which is transferred to the assignee

Comprising 3 types of contract:

(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 licence 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 licence contract with others;

(3) Industrial property object sub-licence contract means a contract under which the licensor is a licensee of the right to use such industrial property object pursuant to another contract.
Validity of contracts for transfer of industrial property rights An industrial property right assignment contract shall be valid upon being registered  with the IP Office of Vietnam Under Vietnam’s 2019 amended IP Law, a license contract is effective as agreed by the parties even without recordal at the Intellectual Property Office of Vietnam (IP Vietnam). It should be noted that such exemption is only available for trademark license agreements. Licenses for other IP rights established on the basis of registration as referred to in Article 6.3(a) of Vietnam IP Law must still be recorded with the IP Vietnam to be effective
Restrictions on transfer of industrial property rights

– Geographical Indication: Rights to geographical indications shall not be assignable.

– Trade names: Rights to trade names may only be assigned together with the transfer of the entire business establishment and business activities under such trade name.

– Marks:  The assignment of the rights to marks (i) must not cause confusion as to properties or origins of goods or services bearing such marks and (ii) may only be assigned to organizations or individuals who satisfy conditions for persons having the right to register such marks.

– Geographical Indications + Trade names: The right to use geographical indications or trade names shall not be licensable.

– Marks: The right to use collective marks must not be licensed to organizations or individuals other than members of the owners of such collective marks. Mark licensees shall be obliged to indicate on goods and goods packages that such goods have been manufactured under mark licence contracts.– 

Restrictions on transfer of industrial property rights

– Geographical Indication: Rights to geographical indications shall not be assignable.

– Trade names: Rights to trade names may only be assigned together with the transfer of the entire business establishment and business activities under such trade name.

– Inventions: Invention licensees under exclusive contracts shall be obliged to use such inventions in the same manner as the invention owners as provided under Article 136.1, Vietnam IP Law.

– Sub-license contract: The licensee must not enter into a sub-licence contract with a third party, unless it is so permitted by the licensor.

Remarks:

  • Under Vietnam IP Law, licensing an industrial property object must meet certain requirements. First, to this end, such an industrial property object must have been protected in Vietnam, in other words, that object must have been granted a Patent or Certificate of Registration. Licensing an industrial property object which has not been registered in Vietnam is not possible.
  • The scope of the assignment/license cannot be broader than the scope of protection indicated in the respective Patent or Certificate of Registration. For example, with respect to trademarks, the assignor can only assign the rights as recorded in the Trademark Registration Certificate, that being said the assignment is only applicable to trademarks and goods/services protected under a certificate in effect at the time of transfer.
  • The assignor or licensor must ensure that (i) he is the registered owner of the assigned or licensed object and (ii) the assignment or license does not result in any dispute with a third party. Where a dispute emerges from the assignment or licensing of an industrial property subject matter, it shall be resolved by the assignor or the licensor.

 

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