License contracts and notes when signing and implementing

License contracts are a type of contract in the field of intellectual property, allowing the party that owns intellectual property rights to license another party to use that right. A careful understanding of the license contract and what to note when signing is necessary to ensure the rights of the parties involved. This article will provide customers with an overview of license contracts and important issues to note.

What is a license contract?

A license agreement is an agreement between two parties in which the licensor allows the licensee to use its intellectual property rights.

Classification of license contracts

License contracts are classified into the following types:

• Exclusive license contract: The transferee has the exclusive right to use the industrial property object within the scope of the agreement. The licensor is not permitted to license any third party to the same extent and may only use it with the permission of the licensee.
• Non-exclusive license contract: The licensor still has the right to use the industrial property object and can transfer non-exclusive use rights to others.
• Secondary license contract: is a contract under which the licensor is the person who is transferred the right to use that industrial property object under another contract.

Basic content of the License Contract

Pursuant to Article 144 of the Law on Intellectual Property 2005, the license contract includes the following basic contents:

• Full names and addresses of the transferor and transferee;
• Basis for transfer of use rights;
• Contract form;
• Scope of transfer, including limits on use rights and territorial limits;
• Contract term;
• Price of transfer of use rights;
• Rights and obligations of the licensor and the licensee;
• Resolve disputes between both parties.

Validity of the License Contract

According to the provisions of Article 148 of the Law on Intellectual Property 2005, amended and supplemented in 2019, the validity of the license contract is determined as follows:

• For industrial property rights established on the basis of registration, the license contract is effective according to the agreement between the parties.
• License contracts with the above industrial property objects, except for trademark license contracts, must be registered at the state management agency for industrial property rights to be legally valid for third parties.
• A contract to license an industrial property object is automatically terminated if the industrial property rights of the transferor are terminated.

Thus, the License Contract will be effective according to the agreement of the parties. If a third party participates, this contract must be registered with the state management agency of industrial property rights to be considered legally valid for the third party, except for trademark license contracts.

Things to note when signing and implementing a license contract

To ensure your rights, customers need to pay attention to the following issues when signing and implementing the license contract:

• Register the contract: Although registering the license contract is not mandatory, customers should do so to protect their rights, especially the licensee. Registration helps publicize the contract, creates favorable conditions for proving legal use rights, and resolving disputes.
• Clearly identify the type of contract: Must clearly state in the contract whether it is an exclusive contract, a non-exclusive contract, or a secondary contract to avoid future disputes.
• Clear agreement on license fees: Need to specifically agree on fee level, payment method, and payment term.
• Detailed regulations on the scope of transfer: It is necessary to clearly stipulate the territorial scope, limits of use rights, and type of license (primary, secondary) to avoid misunderstandings and disputes.
• Clearly define the rights and obligations of the parties: Be as detailed as possible to ensure the rights of each party.
• Penalty provisions for violations: Need to clearly stipulate violations, forms of handling violations, fines, and liability for compensation for damages.
• Use a standard contract form: use a standard license contract form, drafted by people knowledgeable about intellectual property to ensure the contract is complete, accurate, and legal.

Consulting services, drafting professional license contracts at Long Phan

With a team of experienced experts in the field of intellectual property, Long Phan provides professional and reputable consulting services and drafting license contracts, ensuring maximum benefits for customers.

Our services include:

• Consulting on the subjects of license contracts;
• Consulting on types of license contracts and functions of each type;
• Consulting on the conditions for the validity of the license contract;
• Provide standard license contract templates;
• Draft and review license contracts.
• Negotiate and negotiate contract terms.
• Consulting on notes to effectively implement contracts;
• Consulting and resolving difficulties during contract implementation;
• Consulting and guidance on licensing contract registration procedures;
• Consulting on effective dispute resolution (if any);
• Consulting on other issues related to license contracts.

License contracts are an important tool in exploiting and protecting intellectual property rights. A thorough understanding of the license contract and notes when signing and implementing it will help customers avoid risks and ensure their rights. If you need in-depth advice on license contracts, please contact Long Phan via the hotline 0906.735.386 to receive support from a professional team.