1. Definition

According to Clause 1, Article 138 of Law on Intellectual Property, assignment of trademark means that the owner of trademark assigns the ownership to another organization or individual

According to Clause 1, Article 141 of Law on Intellectual Property, licensing of trademark means that the owner of trademark allows other organizations and individuals to use the trademark within the scope of the owner’s using rights

2. Scope of use of a trademark

Regarding the assignment of trademark, holder of trademark shall have the following rights:

–    To use or authorize others to use trademark;

–    To prevent others from using trademark; and

–    To disposal of the trademark.

Regarding the licensing of trademark, according to Clause 5, Article 124 of Law on  Intellectual Property, use of a trademark  will include the following activities:

– Affixing the protected trademark on goods, goods packages, business facilities, means of service provision or transaction documents in business activities;

– Circulating, offering, advertising for sale or stocking for sale goods bearing the protected trademark; and

–  Importing goods or services bearing the protected trademark.

3. Nature of transaction

In case of assignment of trademark, the owner (the assignor) assigns all his rights to trademark to the assignee. The assignee will be the new owner of that trademark. The assignor will terminate his ownership of that trademark.

In case of licensing of trademark, the licensor only transfers his right to use trademark to the licensee. In addition, the licensee has no other rights to trademark such as right to prevent others from using trademark or right to the disposal of trademark.

4. Names and types of relevant contracts

a. Name of contract

There are two names of contracts relating to assignment and licensing of trademark: Contract on trademark assignment and Licensing Agreement.

b. Types of contract

There is only 01 type of contract in case of assignment of trademark and are 03 following types of contract in case of licensing of trademark.

Exclusive contract. In this contract, The licensee has the exclusive right to use the trademark, the licensor may not enter into a contract of using trademark with any third party and only use the trademark when it is permitted  by the licensee;

Non-exclusive contract: The transferor still has the right to use the trademark as well as the right to enter into a contract of non-exclusive license contract with others;

Sub-licensing contract: The licensee is “a licensee of the trademark” under another contract.

5. Content of contracts

Assignment contracts must have the following principal contents: 

• Full names and addresses of the assignor and the assignee.
• Grounds for the assignment.
• Assignment price.
• Rights and obligations of the assignor and the assignee

Licensing contracts must have the following principal contents:

• Full names and addresses of the licensor and the licensee
• Grounds for the transfer.
• Contract type.
• Licensing scope including limitations on use right and territorial limitations.
• Contract term;
• Licensing price;

6. Validity of contracts

Assignment contract takes effect after it is registered at National Office of Intellectual Property of Vietnam (“NOIP”).

Licensing contract takes effect as agreed upon the licensor and the licensee, but it is legally valid only to others after it is registered at NOIP. Besides that, the License Contract is automatically invalidated if the licensor’s industrial property rights are terminated.

7. Restrictions

Restrictions on assignment of trademark:

• The owner of the trademark may only assign its rights within the scope of protection.
• The trademark assignment must not cause confusion related to features or origins of goods or services bearing the trademark.
• The trademark is only assigned to organizations or individuals who satisfy conditions for registering this trademark

 Restrictions on licensing of trademark:

• The right to use collective trademarks must not be transferred to organizations or individuals other than members of the owners of such collective trademarks.
• The licensee must not enter into a sub-licensing contract with a third party, unless it is permitted by the licensor.
• The licensee has obligation to indicate on goods and goods packages that such goods have been manufactured under a licensing contract

The above are main provisions on distinction between the assignment and the licensing of trademark. Bizlawyer is catering to the legal service relating to this. If you have any question, please contact us via Hotline +8486.880.1900 or email: info@bizlawyer.vn for timely advice and support.