How Licensing of Trademark Works?

Licensing of industrial property subject in general or of trademark in specific is regulated in Intellectual Property law.  Accordingly, in trademark licensing, the owner (licensor) grants permission to another (licensee) to use that trademark on mutually agreed terms and conditions. The licensing of trademark must be established in written form to avoid dispute in trademark licensing.

Accordingly, licensing of trademark includes the following types: exclusive contract, non-exclusive contract; sub-license contract.

Firstly, exclusive contract means a contract under which, within the licensing scope and term, the licensee shall have the exclusive right to use the licensed trademark while the licensor may neither enter into any trademark license contract with any third party nor, without permission from the licensee, use such trademark.

Secondly, non-exclusive contract means a contract under which, within the licensing scope and term, the licensor shall still have the right to use the trademark and to enter into a non-exclusive trademark license contract with others.

Thirdly, trademark sub-license contract means a contract under which the licensor is a licensee of the right to use such trademark pursuant to another contract.

In any type of the contracts, it is required to have the following contents: full names and addresses of the licensor and of the licensee; grounds for licensing; contract type; licensing scope including limitations on use right and territorial limitations; contract term; licensing price; rights and obligations of the licensor and of the licensee.

Besides the above contents, the parties also need to take note on the validity of this contract. Different from assignment contract of trademark when it is required to register at National office of Intellectual Property of Vietnam to take effect, the licensing contract of trademark does not required this kind of registration for taking effect. Licensing contract shall automatically be terminated upon the termination of the licensor's trademark right.

If Client needs any more information or request for legal advice regarding licensing of trademark or dispute in trademark licensing contract, our Intellectual Propertyattorney in Vietnam at ANT Lawyers will be of help.