In Vietnam’s rapidly evolving franchise market, understanding trademark licensing requirements is crucial for both foreign franchisors and local businesses. This comprehensive guide explores the legal framework, requirements, and practical aspects of trademark licensing in Vietnamese franchise agreements.

1. Introduction to Trademark Licensing in Vietnamese Franchise Context

Trademark licensing forms the cornerstone of franchise agreements in Vietnam. It enables franchisors to maintain brand consistency while expanding their business through franchisees. The Vietnamese market has seen significant growth in franchise operations, making proper trademark protection essential.

Market Overview

Vietnam’s franchise sector continues to expand, particularly in retail, food and beverage, and service industries. This growth has led to increased attention to trademark protection and licensing requirements under Vietnamese law.

2. Legal Framework for Trademark Licensing

Vietnamese IP Laws

Trademark licensing in Vietnam is governed by several key legal instruments:

• The Law on Intellectual Property (as amended)
• Commercial Law provisions on franchising
• Circular 23/2023/TT-BKHCN on trademark licensing

International Treaty Obligations

Vietnam’s membership in international agreements, including the Madrid Protocol and TRIPS Agreement, influences its trademark licensing framework and provides additional protection mechanisms for international franchisors.

• Madrid Protocol: Simplifies international trademark registration, reducing business costs and administrative barriers.
• TRIPS Agreement: Sets global standards for intellectual property protection, aligning Vietnam’s legal framework with international trade norms.

3. Essential Requirements for Trademark Licensing

Registration Requirements

To license a trademark in Vietnam, franchisors must ensure:

• The trademark is validly registered in Vietnam: The trademark must be validly registered with the NOIP to ensure legal ownership and protection in Vietnam.
• Prepare a Licensing Agreement: Draft a clear and legally binding agreement that specifies the terms of the license, including the scope, duration, territory, and any quality control measures.
• The agreement is registered with the National Office of Intellectual Property (NOIP): The licensing agreement must be registered with NOIP to officially recognize and protect the trademark license under Vietnamese law. If the agreement meets the legal requirements, NOIP will approve the registration of the trademark license. The license will be officially recorded.
• Maintain Documentation: Keep thorough records of the licensed trademark’s use and ensure compliance with any stipulated terms in the agreement, including quality control.
• Enforce Rights: Ensure that the license is respected by the licensee, and take action if there are any infringements or breaches of the agreement.

Documentation Needed

Required documentation includes:

• Declaration form for registration of a transfer agreement
• Transfer agreement document
• Original certificate of protection
• Power of attorney (if filing through a representative)
• Copy of proof of payment for fees and charges
• Consent document from co-owners regarding the transfer of industrial property rights, if the corresponding industrial property is under joint ownership
• Regulations on the use of collective trademarks, certification trademarks, and supporting documents proving the transferee’s right to file in the case of transferring certification trademarks or collective trademarks

4. Licensing Process and Procedures

Step-by-Step Guide

The trademark licensing process involves: 

1. Receiving the application: The application for registration of a contract transferring industrial property rights can be submitted directly or via post to the headquarters of the National Office of Intellectual Property (NOIP) or its representative offices.
2. Processing the application:

• In cases where the application is complete and has no deficiencies:
  • NOIP issues a decision to record the transfer of industrial property rights.
  • Updates the original protection certificate with the new owner’s information. In cases where only part of the list of goods/services under a trademark is transferred, NOIP issues a new trademark registration certificate for the transferee and defines the limited scope of goods/services in the original protection certificate for the transferred portion.
  • Records the transfer in the National Register of Industrial Property Transfers.
  • Publishes the decision to record the transfer of industrial property rights in the Industrial Property Gazette.
• In cases where the application has deficiencies:
  • NOIP issues a notice of intent to refuse registration of the contract, clearly stating the deficiencies in the application for the applicant to address or provide feedback on the intent to refuse registration.
  • Issues a decision to refuse to record the transfer if the applicant fails to correct the deficiencies, corrects them inadequately, does not provide feedback, or provides unjustified feedback regarding the intent to refuse registration within the stipulated time.

For more details on the procedures for registering a contract for the transfer of industrial property rights, please visit the National Public Service Portal: Procedures for registering a contract for the transfer of industrial property rights 

Common Challenges

Franchisors often face challenges such as:

• Language barriers in agreement preparation: Licensing agreements must be prepared in Vietnamese or include certified Vietnamese translations. Misinterpretations due to language differences can lead to legal ambiguities or disputes.
• Solution: Hire professional legal translators or bilingual legal experts to ensure agreements are accurately translated while maintaining the intended meaning and legal integrity.

• Extended processing times: The processing time for registering trademark licensing agreements in Vietnam can be lengthy, often causing delays in franchise operations. Extended timelines may disrupt the franchisor’s market entry or expansion plans.
• Solution: Start the registration process well in advance, and monitor application progress closely. Collaborating with local representatives who have experience navigating NOIP procedures can help expedite the process.

5. Rights and Obligations

Licensor Responsibilities

Trademark owners must: (Article 287 Commercial Law)

• Supply documents guiding the commercial franchise system to franchisees;
• Provide initial training and regular technical assistance to franchisees for managing the latter’s activities following the commercial franchise system;
• Design and arrange places of sale of goods or provision of services at the expense of franchisees;
• Guarantee the intellectual property rights over objects stated in franchise contracts;
• Equally treat all franchisees in the commercial franchise system.

Licensee Obligations

Franchisees are required to: (Article 289 Commercial Law)

• Pay franchise sums and other amounts under commercial franchise contracts;
• Invest in adequate material facilities, financial sources, and human resources to take over business rights and know-how transferred by franchisors;
• Submit to the control, supervision, and instruction of franchisors; comply with all requirements set forth by franchisors on designing and arrangement of places of sale of goods or provision of services;
• Keep secret the franchised business know-how even after the expiration or termination of commercial franchise contracts;
• Stop using trademarks, trade names, business slogans, logos, and other intellectual property rights (if any) or systems of franchisors upon the expiration or termination of commercial franchise contracts;
• Manage their activities following the commercial franchise system;
• Not to sub-franchise without permission of franchisors.

6. Enforcement and Protection

Infringement Handling

Effective trademark protection includes:

• Regular market monitoring: Conduct periodic checks to detect trademark misuse.
• Swift action against infringers: Act promptly through legal measures to prevent brand damage.
• Cooperation with local authorities: Partner with relevant agencies for efficient enforcement.

Dispute Resolution

You can resolve trademark disputes through:

• Administrative proceedings: Leverage quicker government mechanisms for straightforward disputes.
• Civil litigation: Use the courts for complex cases needing compensation or strong legal remedies.
• Alternative dispute resolution methods: Opt for mediation or arbitration to settle disputes amicably and cost-effectively.

Conclusion

Successful trademark licensing in Vietnamese franchise agreements requires careful attention to legal requirements and procedures. Franchisors should seek professional legal assistance to navigate the complexities of Vietnamese intellectual property law and ensure proper protection of their trademark rights.

For specific guidance on trademark licensing in Vietnam, consult with qualified legal professionals who specialize in intellectual property and franchise law.

Harley Miller Law Firm “HMLF”

Head office: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.

Phone number: +84 937215585

Website: hmlf.vn 

Email: [email protected]