What is a License Agreement? Procedure to register for the latest License contract? What problems are encountered when terminating and post-terminating the license contract? What are the main contents of a license contract? License contract registration documents?
1. What is a license agreement?
A license contract is a contract to transfer the right to use intellectual property rights.
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A license contract is understood as a written agreement that the owner of an intellectual property right (the licensor) allows another person (the licensee) to use the intellectual property rights. own, while continuing to retain ownership of those rights.
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The purpose, scope of territory and time limit for transferring rights in the license contract must be determined and agreed upon by the parties.
Currently, in the period of industrialization and modernization, the transfer of the right to use industrial property rights helps the country’s economy develop. The transfer of the right to use industrial property rights can be done in two forms: a contract or as designated by a competent state agency. In the following article, we will guide you on the procedure and documents to register an industrial property right transfer contract, also known as a license contract.
License is a term used to refer to a licensor (owner of industrial property rights) who grants the right to use his or her industrial property rights to the licensee while retaining the ownership rights to the industrial property rights. industrial property rights.
The subject of the license is an industrial property right – the right to a type of intellectual property. For example: inventions, works, trademarks, industrial designs, semiconductor integrated circuits, layout designs, etc. The licensor must prove that he is the exclusive owner of the intellectual property. The above-mentioned intellectual property is granted protection titles by competent state agencies such as patents, certificates of registration of layout designs of semiconductor integrated circuits, utility solutions patents, etc.
The “licensing” – transferring the right to use industrial property rights helps individuals and organizations wishing to use intellectual property promote the value of this intellectual property for the purposes specified by the owner. property is accepted in the form of a contract. The transfer of the right to use this type of intellectual property contributes to technology dissemination, limiting monopolies, and improving research, creation, investment, production and business. For commercial purposes, the exploitation of intellectual property rights will cost money or other physical value. Therefore, the licensing brings benefits to the owner of the intellectual property right, the franchisee to use the intellectual property right and the whole society.
A license contract is a form of expression of a civil transaction that takes place between the licensor and the licensee. In which, the two parties agree to allow the use of intellectual property rights, especially in terms of territory, purpose and time limit for licensing.
To be legally valid, a license contract must be made in writing, recording the following main contents:
+ The parties to the contract: write all information of the licensee and the licensee; full name and information of the representative participating in the signing of the contract (if any).
+ Objects of industrial property right transfer: scope (partially or wholly of protection contents under the protection title) of the transferred industrial property rights; limit the use and scope of use by the industrial property right holder; term (within the time limit specified in the protection title or rights contract; payment of the value of the industrial property right transfer (amount, term, payment method,…).
+ Rights and obligations of both parties granting and receiving the license (the rights and obligations must not be contrary to the law, do not introduce unreasonable restrictive terms, …).
+ Other terms such as: conditions for changing, supplementing, changing, terminating the license contract; licensing agreement dispute resolution provisions (negotiated or through arbitration or through a court or a choice of all of the above).
Currently, registration of a license contract is not a mandatory obligation. However, to ensure the interests of third parties, registration of a license contract is a necessary condition.
According to the contract or agreement of the two parties, the licensor or the licensee or authorizes a qualified subject to register the license contract. If in the case of authorization, proceed with the submission of a dossier to an industrial property representation service organization that is qualified to practice, which is recorded in the national register of industrial property representatives and published. publicly at www.noip.gov.vn.
Pursuant to the 2005 Law on Intellectual Property, which was amended and supplemented in 2009, the petrol license contract (the contract for the transfer of the right to use intellectual property rights) has the following contents that need attention:
First. Form of Li-gasoline contract:
The use right transfer contract must be made in writing, all other forms have no legal value.
Second. Contents of Li-gasoline contract:
A license transfer contract must contain the following basic contents:
Full name and address of licensor and franchisee.
+ Bases for transfer of the right to use
+ Type of contract (type of license to use)
+ Scope of transferring the right to use: limit the right to use, limit the territory.
+ Term of license transfer
+ License transfer price and payment method (package or periodical)
Rights and obligations of the licensor and the franchisee.
+ Signature of the representatives of the parties
Tuesday. Some mandatory terms and some other terms required in the license contract should be noted by the parties when negotiating and signing the contract, specifically:
– Subject of license: The parties must clarify what the subject of the license is and how.
– Level and scope of license rights: The license agreement can be exclusive, sole or non-exclusive.
– Field of use: The licensee may be limited to the distribution and sale of technology to a specific group of customers, or to commercialization of the technology within a specific industry or industry segment.
– Technical assistance: Depending on the type of technology transferred, there is usually an agreement on technical support in the form of providing documents, data, and expertise to the licensee.
– Secondary petrol: A licensee, especially an exclusive license, may apply for a secondary license within his territory.
– Improved license: These are versions, upgrades, and new technologies that should be specified in the contract. The parties need to clarify what the “more favors” are.
– Licensees are treated equally: The contract should include this provision in the case of a non-exclusive license agreement. The provision is intended to ensure fairness to the licensee when the licensor grants licenses to others with more favorable conditions.
– Ability to transfer: The parties’ agreement on this provision ensures the rights and obligations of the heirs, assigns or other legal representatives of the parties.
Conditions for modification, suspension or invalidation of the contract: Negotiate the conditions under which the contract can be modified, suspended or invalidated in accordance with the provisions of law.
– Dispute resolution method: Choose among the following ways to resolve disputes between the parties: Negotiation; Referee; Court; or a combination of the above methods.
2. Problems encountered when terminating and post-terminating the license contract
The license contract terminates in the following two cases:
a. The term of the contract has expired or there is an event leading to the agreement to terminate the contract.
For example: the term of the contract can be specified as 10 years from the effective date of the contract and at the end of the 10th year the contract terminates. Or, the contract expires at the time of an event such as the expiration of the last of the licensed patents, or, possibly earlier, if the court a court or administrative authority decides that the last of the “licensed” patents is invalid or unenforceable.
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b. The contract is terminated by any party prior to its expiration.
The right to terminate a contract is often detailed and involves failure to perform in some way that would be considered a breach of the contract’s terms, for example, failure to pay licensing fees, bankruptcy or default.
After the contract expires or terminates
a. Technical know-how or confidential information
When the contract expires or is terminated by the licensor, will the licensee return or continue to use the technical know-how or confidential information?
For example: “Return of Confidential Information: The termination of this contract by Company B in accordance with the provisions of Section <*>, but subject to the expiration or termination of the contract by Company A in accordance with the provisions of Section < *>, then Company A must immediately return to Company B any Confidential Information belonging to Company B that Company A has received from Company B prior to the time of termination of this contract, and Company Company A shall not have the right to use Confidential Information for any purpose.”
b. Secondary license
Has any sub-license or any right been granted to third parties and whether these or these licenses continue to be exercised after the termination of the primary license or are not?
c. Other provisions
For example: maintenance of confidentiality, continued use of the other party’s improvements, access to records for a specific period.
For example: “Protection of Confidential Information: Each party’s responsibility for the confidentiality, non-use and non-disclosure of the information specified in Section <*> must be accomplished by using the other party’s Confidential Information to the extent possible. The minimum level of care is the same as that used to protect your Confidential Information. This liability shall be in full force and effect for the duration of the contract and thereafter for 3 years.
3. Main contents of the license contract
a. Identify the parties to the contract
The contract shall be signed between one party that has the right to grant the license and the other party who will exercise that license. The contract should make it clear who is the licensor and who is the licensee. Other details including the address of each party, the jurisdiction of the company (for the company) and the effective date of the contract may also be included in the identification of the parties to the contract.
The definition clause is the dictionary of the contract. Each definition should be as independent as possible. There are at least three terms that need to be defined in the patent license agreement, which are:
– Licensed inventions, technical know-how and any confidential information, which means “subject to license agreement”;
– Licensed products, that is, “those manufactured, used, offered for sale, sold or imported by the licensee under the terms of the license agreement”;
– Territories, i.e. geographical limits “in which the product may be used”.
c. Licensing subject
It is important to clarify the scope of the license agreement because licensing is at the core of a license agreement. It is necessary to clarify the subject of the license.
For example: “licensed subject” is:
– Intellectual property rights: “Intellectual Property Rights” means all rights owned or held by Company X, relating to or contained in patents or patent applications, whether national or international. foreign countries, and all applications for division, forward and partial transition of any patent application, and all patents that may be granted out of the number of filed patent applications, and all patents Patent rights granted will be re-granted, re-examined and renewed in relation to Company X’s technology.
– Rights to technology: “Technology Rights” means all rights owned or controlled by Company X to, relating to or under technical information, technical know-how, manufacturing processes, procedures, procedures, components, equipment, methods, formulations, protocols, techniques, software, designs, drawings or data related to Company X’s technology, which are not subject to intellectual property rights, but is essential for the full implementation and application of inventions at the time of disclosure or protection of intellectual property rights.
d. Degree and scope of license rights
The license agreement can be exclusive, sole or non-exclusive. In a non-exclusive license agreement, the licensee is only one of many licensees to whom the licensor enters into a contract to transfer the right to use and exploit the technology and is an alternative preferred by most licensors. By transferring both risks and benefits to several licensees, the licensor is not dependent on the success of a single licensee. Licensors are also able to maintain greater control over technology, and because many licensees are using and exploiting technology in several markets and due to product diversity, that technology is given the opportunity to improve and develop further.
e. Field of use
The licensee may be restricted to distributing and selling technology to a specific group of customers (such as the aviation sector), or to commercializing the technology within a specific industry or industry segment. (such as computer software), or use technology for a specific purpose (such as research or in combination with some other product or manufacturing process).
The license agreement may be limited to a specific geographical territory. For example, it is possible to license on a global scale, or to license in specific countries or even certain areas within a country (such as one or more states, or regions). of a country). What is relevant will be influenced by what the licensor can license and what the licensee can avail in a particular territory or region.
g. Technical assistance
Depending on the type of technology being transferred, there is usually an agreement for technical support in the form of documentation, data and expertise to be provided to the licensee.
H. License fee
The amount paid to a licensor to acquire and use technology is generally divided into a lump-sum license fee and a recurring license fee. Many licensing agreements cover both of these fees.
– All-inclusive license fee: is the amount paid at the time of occurrence of a particular event. It can also be a single sum, paid at the time of signing the contract. If no other payment is made, this amount will be treated as the sole package license fee.
– License fee paid periodically: is a regular payment to the licensor for the use of technology by the licensee. Since this type of license fee attaches the use of technology to a certain fee, it is a clear reflection of the value of the technology to the licensee, and accordingly the fee is a form of The most common payment method in licensing agreements.
4. The latest order of procedures and application for registration of a license contract
Dossier for registration of license contract:
To register a license contract, the applicant needs to prepare a set of documents including the following documents:
+ An application form for registration of a license contract (industrial property right licensing contract), with a form as prescribed by law and provided free of charge by the National Office of Intellectual Property.
+ 02 originals or notarized and certified copies of the license contract, including the appendix (if any). If the contract has many pages, the parties must sign the pages or stamp the border between the pages. If the contract is made in a language other than Vietnamese, a Vietnamese translation must be attached (with a certification mark of a copy of the original/translated from the original).
+ If industrial property rights are jointly owned by many people, a written agreement of all owners is required on the transfer of the use right.
+ Receipts and vouchers for collection of fees and charges for license contract registration. According to the law, each license contract or an industrial property object that transfers the use right registered with a competent state agency will have to pay 550,000 VND.
+ Power of attorney (if authorizing another person with full civil act capacity to register for a license contract).
The applicant for registration of a license contract shall submit all of the above documents to the National Office of Intellectual Property. The application can be done in person or by post.
Order and procedures for registration of a license contract:
The order and procedures for registration of a license contract are as follows:
When receiving a complete set of the above documents, within 02 months, the competent authority will appraise the form and content of the application for registration of the license contract.
During the appraisal period, if the dossier is incomplete, the competent state agency shall send a written notice clearly stating the reason leading to the intention to refuse to register the license contract and extending the license contract for another 1 month. the applicant to correct these deficiencies or to issue a letter stating the reasons for opposing the reasons leading to the intention to refuse to register the license contract. At the end of one month from the date of receipt of the notice from a competent state agency, if the applicant fails to give a plausible reason or fails to correct or supplement deficiencies, the contract registration dossier license will be denied.
At the end of the appraisal period, if there are no problems, the dossier meets all legal requirements or, despite its shortcomings, has been corrected by the applicant within the statutory time limit. If the application is modified, supplemented or completed, the license contract will be registered and recorded in the National Register of Industrial Property Rights Transfer. After that, the applicant for registration of a license contract will be issued with a certificate of registration of the contract of licensing the industrial property object and a copy of the contract for the transfer of the right to use the industrial property object. industry (licensing contract) has been stamped registration. The decision to register the license contract will be publicly announced in the Industrial Property Official Gazette.
If the registration of a license contract is denied, the applicant has the right to file a complaint or petition about the refusal decision according to the administrative complaint and lawsuit procedure.
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After registering a license contract, but there is an amendment or change to the content of the license contract, the parties must enter into a written agreement and of course to ensure the interests of the third party. This change needs to be registered with the National Office of Intellectual Property.