Eus regulations on trademark licensing agreement experience for vietnam

HO CHI MINH CITY UNIVERSITY OF LAW MANAGING BOARD OF SPECIAL TRAINING PROGRAMS BACHELOR’S THESIS REGULAR TRAINING PROGRAM COURSE 34 (2009 – 2013) EU’S REGULATIONS ON TRADEMARK LICENSING AGREEMENT EXPERIENCE FOR VIETNAM Student : NGUYỄN THỊ HẠNH LÊ Student ID : 0955010105 Class : CLC34 Supervisor : Dr TRẦN THỊ THUỲ DƯƠNG HO CHI MINH CITY, 2013 I hereby affirm that this thesis is my own study under the supervisor’s guidance All of the information other than my idea to be used or quoted has been acknowledged by means of complete references I would bear full responsibility for my protest July 15th, 2013 Nguyễn Thị Hạnh Lê TABLE OF CONTENTS INTRODUCTION CHAPTER 01 OVERVIEW OF TRADEMARK LICENSE 1.1 Concept of trademark license 1.1.1 Trademark license definition 1.1.2 Trademark – the subject of trademark license 10 1.1.2.1 “Trademark” concept 10 1.1.2.2 Trademark as subject of license in EU and Vietnamese law 14 1.1.2.3 Grounds for trademarks to be subject of license 17 1.2 Roles of license and trademark license 19 1.2.1 For the licensor – the proprietor 19 1.2.2 For the licensee 21 1.2.3 For society 22 1.3 Features of trademark license 24 1.3.1 Subject 24 1.3.2 Limitation 24 1.3.3 Licensee 26 1.3.4 Trademark license in comparison with other agreement relating to industrial property 26 1.3.4.1Trademark license in comparison with other industrial property license 26 1.3.4.2 Trademark license in comparison with trademark assignment 28 1.4 Classifications of trademark license 29 1.4.1 Classification based on manner of using the licensed trademark 29 1.4.2 Classification based on licensed scope of right 30 1.4.3 Classification based on entity granting license 32 1.5 Remarks 33 CHAPTER 02 TRADEMARK LICENSING AGREEMENT UNDER LIGHT OF EU REGULATIONS AND VIETNAMESE LAW 34 2.1 Legal framework on trademark licensing agreement 34 2.2 Clauses of a trademark licensing agreement 39 2.2.1 Type of clauses 39 2.2.2 Basic contents of trademark licensing agreement 43 2.2.2.1 Subject of license 45 2.2.2.2 Extent of license 47 2.2.2.3 Financial clauses 51 2.2.2.4 Clauses on controlling quality of products or services under license 53 2.2.2.5 Other clauses 56 2.2.3 Unpermitted restrictive clauses in trademark licensing agreement 59 2.2.3.1 Absolute territorial protection 59 2.2.3.2 Quantitative restrictions 62 2.2.3.3 Downstream restriction and customer restriction 63 2.2.3.4 Non?challenge clause 64 2.3 Form and registration of trademark license 65 2.3.1 Form of trademark license 65 2.3.2 Registration of trademark license 66 2.4 Remarks 70 CONCLUSION 72 ABBREVIATIONS BTIP Benelux Treaty on Intellectual property CTM Community trademark Directive 2008/95/EC Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trademark EU European Union ECJ European Court of Justice The Guidelines The OHIM Guidelines Concerning Proceedings Before the Office for Harmonization In the Internal Market (Trademarks and Designs) IP Intellectual property IPL Intellectual property law IPR Intellectual property right Paris Convention Paris Convention for the Protection of Industrial Property The Manual The OHIM Manual concerning proceedings before the office for Harmonization in the Internal market (Trademarks and Designs) Regulation 207/2009 Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trademark TEC Treaty establishing the European Community TFEU The Treaty on the functioning of the European Union TRIPS Agreement on Trade Related Aspects of Intellectual Property Rights TTBER Commission Regulation (EC) No 772/2004 of 27 April 2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements Vietnamese IPL Vietnamese Intellectual Property Law No 50/2005/QH11 passed on 29/11/2005, amended 36/2009/QH12 on 19/6/2009 WIPO World Intellectual Property Organization by Law No INTRODUCTION The necessity of doing research Trademark, as an intellectual property (hereinafter referred to as IP) subject matter, has played an important role in both society and economy For a long time, law has recognized intellectual property rights (hereinafter referred to as IPR) and encouraged IP to develop more Legal frameworks on this field have been improved more with every passing day Basing on that ground, the proprietor has more advantageous to utilise effectively his IP in general and trademark in particular Among all, “licensing is an extremely common method” of exploitation 1, which plays important roles to the proprietor and other parties as well as to consumers and market2 In Vietnam, trademark license is the most popular license in comparison with other IP license3 As long as trademark license are popular in trade activities, it is important for law to provide clearly and appropriately on this practice Therefore, doing research on practical development and legal regulations on trademark license has significant meanings and value to: (i) improve a legal framework with appropriate provisions; (ii) help entities have grounds for exercising their right on exploiting trademark effectively and lawfully Around the world, trademark license has been under concern of researcher for a long time, especially in European Union (hereinafter referred to as EU) EU in general and its Member States in particular have a long historical development in IP field and experiences on protecting and enforcing IPR Besides, EU also has a special system of trademark protection, which consists of four branches: national protection, Benelux territorial protection, EU territorial protection and international protection4 By contrast, Vietnam is similar to some developing countries that are inexperienced in this field, especially on license matters Consistently, trademark license is a new method for researching in Vietnam Therefore, studying valuable experiences of EU in order to propose David I Bainbridge, Cases & materials in Intellectual Property law, Second Edition, Financial times, Pitman Publishing, 1999, page 10 See section 1.2 infra See Appendix 01 infra See section 1.1.2.2 infra suitable suggestions to improve Vietnamese laws on IP in general and on trademark in particular has significant meanings and value For above reasons, the topic is chosen for the author’s graduation thesis The literature review of the research Doing research on trademark licensing agreement under EU’s regulations is not a new research method all over the world According to the author’s research, there are many research works on this matter, in which some works are considered remarkable in relation to the matter concerned, i.e (i) Guy Tritton, Intellectual property in Europe, Second Edition, Sweet & Maxwell, London 2002 and Third Edition, Sweet & Maxwell, 2008; (ii) Charles Gielen, Verena von Bomhard, Concise European trademark and design law, Wolters Kluwer, Law & Business, 2011; (iii) Agnieszka A Machnicka, Trademark licensing agreements in light of the EC competition rules, 2008, etc Those research works have clarified some theoretical and practical matter relating to trademark licensing agreement and its contents, which are helpful materials to the thesis for researching on EU’s regulations on trademark licensing agreement However, those mainly focus on content of trademark license under aspect of competition law In Vietnam, the first legal grounds for trademark were adopted in 1980s However, research works on IP in general and on each IPR subject matter including trademark has just been under concern since the Civil Code 1995 was passed and Vietnam applied for membership of the World Trade Organization in 01/1995, especially in recent years, after the National Assembly of Vietnam passed the first Intellectual Property Law in 20055 Nevertheless, there have been not many research works on IP license, and if any, predominantly focusing on IP license relating to technology transfer Besides, most of them are not researched under aspect of learning from other developed countries in general and from EU in particular In Vietnam, Vietnamese Intellectual Property Law No 50/2005/QH11 passed on 29/11/2005, amended by Law No 36/2009/QH12 on 19/6/2009 (hereinafter referred to as Vietnamese IPL) trademark license has not been under concern of research According to the author’s research, there are few research works relating to the matter concerned (i) “Experiences on licensing industrial property from the perspective of comparison to EU’s regulations”(2004) by LL M Nguyen Thanh Tam6 This work described the concept of and analyzed the current EU’s legal frameworks on technology transfer agreement, especially under the aspect of competition law However, this research merely focused on technology transfer agreement but not industrial property license in general and trademark licensing agreement in particular Besides, it mainly analyzed EU’s regulations of competition law on technology transfer practice – the TTBER7, which does not cover pure trademark license (ii) “Theoretical and practical issues on trademark licensing agreement in Vietnam”– master thesis of Bui The Hung8 (2006) This work analyzed Vietnamese regulations on trademark licensing agreement However, the analysis based on the Vietnamese Intellectual Property law 2005 and some other subordinate documents, which is invalid now, i.e Decree 63/CP dated 24/10/1996 of the Government detailing and guiding on industrial property This thesis mentioned sketchily regulations of many countries on this issue, i e US, EU, Lao, Cambodia, etc.9 but not focus mainly on any country’s regulations The purpose of the thesis This thesis has two main purposes: The first purpose is to analyze both theoretical and practical aspects of trademark licensing agreement It aims at finding the nature of trademark licensing agreement Nguyễn Thanh Tâm, “Một số kinh nghiệm chuyển giao quyền sở hữu cơng nghiệp nhìn từ góc độ so sánh qua pháp luật EU”, Legal Sciences Journal of Ho Chi Minh City University of Law, 6/2004 The Commission Regulation (EC) No 772/2004 of 27 April 2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements (hereinafter referred to as TTBER) This is the main legal ground for practice of technology transfer license in EU See section 2.1 infra Bùi Thế Hưng, “Một số vấn đề lý luận thực tiễn hợp đồng liKxăng nhãn hiệu hàng hoá Việt Nam”, Master’s thesis, Ho Chi Minh City, 2006 The master thesis only mentioned regulations of those countries in about ½ page for each as well as its basic contents in comparison with other related agreements Basing on that grounds, it aims at defining specific features of trademark licensing agreement The second purpose is to draw experiences for Vietnam in order to improve Vietnamese regulations on relating matters This cannot be achieved without investigating and evaluating EU’s regulations on trademark licensing agreement To satisfy those purposes, the thesis shall focus on object of theoretical and practical matters relating to trademark licensing agreement under EU’s and Vietnamese regulations under viewpoint of intellectual property law (hereinafter referred to as IPL) Delimitation The thesis has certain limitation in some following points due to time and material limitation: Limitation on theory: the thesis focuses on basic theoretical matters relating to trademark license and its contents under IP aspect Trademark is analyzed only as a subject of license but not as an individual IP subject Limitation on legal grounds: First, trademark licensing agreement has legal frameworks consisting of three branches10 However, the thesis shall mainly analyze on regulations of IPL Civil and competition regulations are only researched under aspect of IPL on Second, under aspect of IPL, the thesis shall merely analyze regulations trademark licensing agreement and some related regulations on trademark Third, the thesis shall analyze primarily regulations of EU and Vietnam Regulations of international law and other countries are only learned and applied for references Limitation on content: the thesis shall analyze generally trademark licensing agreement under two aspects: (i) as IP license, (ii) as a unique agreement The thesis shall not analyze particularly on other greater agreements including trademark license part, i e technology transfer agreement, distributing agreement, franchise 10 See section 2.1 infra agreement, etc Besides, the thesis shall merely analyze basic and specific contents but not all contents of trademark licensing agreement Limitation on time: the research on information sources is limited to the date of the thesis completion ? July 15, 2013 Methodology For the objective and delimitation mentioned above, the thesis shall combine various kinds of legal methods as follows: ? Comparative method: This is the main method to be used throughoutly for doing research, as the main purpose of the thesis is to draw experiences for Vietnamese law by analyzing and comparing Vietnamese to EU’s regulations on trademark licensing agreement This is an effective method in order to find out similarities as well as differences between: (i) trademark license and other IP licenses, (ii) EU and Vietnamese legal systems on each matter relating to trademark licensing agreement ? Legal analysis method: It is also the main method in the thesis used throughoutly to analyze provisions in the EU’s regulations as well as those in Vietnamese law on trademark licensing agreement ? Synthetic method: this method is used for collecting all relevant information on theoretical and legal matters relating to trademark licensing agreement from different sources, i e books, legal journals and websites on Internet, in other to make the remarkable conclusion Value of the research In Vietnam, the thesis shall be one of the first pieces of research on trademark licensing agreement learnt from developed regulations The thesis provides a general and basic overview on trademark licensing agreement, and hopefully shall become a reference project in course of studying and researching on relating matters Furthermore, the thesis can be used for references by legislator in making and improving law on related issues Besides, the thesis has practical value of 69 This provision is for purpose of protecting the licensee as in practice, the proprietor may abuse surrender provision to cause damages to the licensees 215 By this provision, if trademark license is registered, the licensee will have right to be informed about the licensor’s intention to surrender trademark Hence, he would know that the licensed trademark would be surrendered; otherwise, under this provision, the proprietor cannot surrender his trademark as the Community does not allow him to register the surrender without inform to the licensee Therefore, it is a good reason for parties to register their trademark license For the proprietor, it helps him to perform right to surrender his trademark more advantageous For the licensee, it helps him to save time and money from exploiting meaningless trademark, which was surrendered Similarly, under Vietnamese IPL216, registration procedure of trademark license is not compulsory; however, it makes trademark license have validity on third parties Article 148(2) of Vietnamese IPL provides: For the industrial property rights established on the basis of registration according to the provisions of clause 3(a) of article of this Law, an industrial property object license contract shall be valid as agreed upon by the parties involved but shall be legally effective as against a third party upon registration with the State administrative body for industrial property rights Accordingly, trademark license only has effect to third parties if it is registered This principle is similar to regulations of EU’s laws However, there are two differences in practice of this principle First, Vietnamese IPL does not define advantage of registering trademark license in relation to surrender proceeding; 215 For instance, A, who is the proprietor of CTM, grants to B a license While B is exploiting trademark under this license, surrenders that trademark, which results in practice that trademark would lose its validity on the entire of Community However, if B does not know about that surrender, he will waste his time and money on exploiting a nonsensical trademark 216 Procedure for registration of trademark licensing agreement under Vietnamese law is provided in Article 149?150 of Vietnamese IPL, Article 26 of Decree No 103/2006/ND?CP dated September 22, 2006 of the Government detailing and guiding the implementation of a number of articles of the Law on intellectual property regarding industrial property; Section of Chapter of Circular No 01/2007/TT?BKHCN dated February 14, 2007 of the Ministry of Science and Technology guiding the implementation of the Government's Decree no 103/2006/ ND?CP dated September 22, 2006, detailing and guiding the implementation of a number of articles of the Iaw on intellectual property regarding industrial property 70 hence, registration of trademark license does not have effect on practice of surrender of trademark Second, Vietnamese IPL system does not provide any regulation indicating definition of “third parties” concept In fact, there may be many understandings on concept of “third parties” of a trademark license They may be parties relating to license while parties perform their license For instance, material suppliers of a manufacturing trademark license; or any customer of products or services provided under trademark license can be concerned as “third party” If third party is considered as any entity relating to the license directly or indirectly, even the consumers, it will result in reality that under any circumstances, parties need to register their license for purpose of making it have effect on customers on market It thus may bring about prolix but unnecessary administrative formalities; and purpose of this principle will be not satisfied Besides, it also results in practice that registration for trademark license seems to be mandatory Therefore, it needs to have a clear definition on concept of “third party” of a trademark license Besides, there is also a difference between registration procedure under Vietnamese and EU’s regulations Particularly, Article 149(2) of Vietnamese IPL requires “the original or a valid copy of the contract” in application file for registration, which results in practice that trademark licensing agreement has to be in written for entering the registration procedure However, registration procedure under EU’s regulations does not require the same In fact, registration procedure of CTM license at OHIM merely requires parties to fill in a form217 available in OHIM; and contract is only needed in file in case request for registration was made by the licensee only 218 Thus, under EU’s regulations, registration procedure does not result in practice of written form of CTM license 2.4 Remarks As being an IP license, content of trademark licensing agreement besides being consistent to general civil principle, shall not contain unpermitted restriction 217 See Appendix 02 infra For more infomation on this principle, see section 2.2.4.3, 2.2.4.4 in particular and section 2.2.4 in general of the Manual of OHIM 218 71 clauses Those are all stated in legal framework of Vietnam and EU Besides, by analyzing and comparing regulations of Vietnam and EU, there are some experiences for Vietnamese IPL that can be drawn219: Firstly, Vietnamese IPL system should learn form EU’s regulations on providing clearly definition on “third parties” concept in Article 148(2), which relates to trademark license registration, in other to clarify entities affected by validity of trademark license and other matters relating to registration procedure Secondly, Vietnamese IPL system should learn from EU’s IPL system on providing approaches on judging content of trademark license Particularly, it should have a general principle and an opened list of unpermitted contents instead of current fixed list in Article 144(2) Thirdly, Vietnamese IPL should amend Article 144(1) on contents of trademark license Those should be for references but not compulsory contents Fourthly, Article 144(1) of Vietnamese IPL in regard to contents of license extent should be modified clearly by adding term extent (point (dd)) into content of extent on territory and licensing scope (point (d)), in other to make content of feature on license extent stand out and more reasonable Fifthly, Vietnamese IPL should supplement quality control as a basic content of trademark licensing agreement Sixthly, Article 198(1)(d) of Vietnamese IPL should learn from EU’s regulations that only proprietor has right to claim for infringement on his trademark, except for case of exclusive license and proprietor does not perform that right Seventhly, Vietnamese regulations on unpermitted content of license should amend on prohibiting clause on seeking to such absolute territorial protection and clause on quantitative restriction 219 Each experience is analyzed in the consecutive content in Chapter 72 CONCLUSION Licensing trademark is one of the most effective manners for proprietor to exploit his trademark In Vietnam, this field is inexperienced due to the young historical development of IPL law and practice However, resulting from important roles of trademark license, this matter is in deep concern more with every passing day Along with that practice, legal grounds covering on trademark licensing agreement are also developing and improving As a result of doing research on basic rules and concepts of trademark licensing as well as content of trademark licensing agreement, the author comes to following conclusions: There is no standard and unanimous definition on trademark license concept However, regardless of detailed content of each definition, those all express nature of a trademark license that is: an allowance of proprietor grant to others to use his trademark, which belongs to his proprietorship, in a determined extent of term, territory and under conditions in agreement Those are also the most specific features of trademark licensing agreement Trademark licensing agreement can form: (i) as independent contract; (ii) as an ancillary part of a greater contract However, regardless of form of trademark licensing agreement, it still has nature of transferring the using of a trademark, which makes the trademark license become unique and different from other agreement relating to trademark Besides, it also results in important roles of trademark license, especially for the proprietor in exploiting his trademark effectively Trademark licensing agreement has nature of civil agreement as well as nature of an IP license Hence, legal frameworks on trademark licensing agreement obviously consist of civil law system and IPL system Besides, as licensing trademark is manner for doing trade, which has close relationship with competition in practice, this legal framework also include regulations on competition law 73 Basing on natures of trademark licensing agreement, besides demanding it to be compatible with general principle on civil agreement, law covering on trademark licensing agreement also provides unpermitted clauses that cannot be stated in licensing agreement Springing from practical demand, Vietnamese IPL system on trademark licensing agreement has improved in other to be more appropriate Due to lack of experiences in this field, Vietnamese law should learn from EU’s regulations for some progressive policies Besides, Vietnamese law also has some regulations, which are actually more appropriate and compatible to practice than EU’s policy, that need to preserve With limited time and experience, the thesis certainly cannot provide absolutely effective methods on trademark licensing agreement However, the author hopes it helps to draw a fundamental overview of this matter Furthermore, as delimitating, the thesis merely approach to research on licensing agreement under aspect of trademark’s law Therefore, there are other matters relating to this topic that the thesis does not approach, for instance: trademark licensing agreement under aspect of competition law, licensing agreement on other industrial property (patents, know? how, etc.) Those are new research approaches that need to be concerned in Vietnam With purpose of contributing to develop Vietnamese research on this field, the author always looks forward to receiving comments as well as pieces of advice from all readers in other to improve self?research BIBLIOGRAPHY A Legal documents Vietnamese Law No 27/2004/QH11 dated December 14, 2004 of the National Assembly on Competition Vietnamese Law No 33/2005/QH11 dated June 27, 2005 of the National Assembly on Civil Vietnamese Law No 50/2005/QH11 dated December 12, 2005 of the National Assembly on Intellectual Property Vietnamese Law No 36/2009/QH12 dated June 29, 2009 of the National Assembly amending and supplementing a number of articles of the Law on Intellectual Property Vietnamese Law No 80/2006/QH11 dated December 12, 2006 of the National Assembly on Technology Transfer Decree No 35/2006/ND?CP dated March 31, 2006 of the Government detailing implementation of commercial Law 2005 regarding franchising Decree No 103/2006/ND?CP dated September 22, 2006 of the Government detailing and guiding the implementation of a number of articles of the Law on intellectual property regarding industrial property Circular No 01/2007/TT?BKHCN dated February 14, 2007 of the Ministry of Science and Technology guiding the implementation of the Government's Decree no 103/2006/ ND?CP dated September 22, 2006, detailing and guiding the implementation of a number of articles of the law on intellectual property regarding industrial property Joint Circular No 02/2008/TTLT?TANDTC?VKSNDTC?BVHTT&DL? 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Technology transfer block exemption regulation, Slaughter and May, 3/2010 E Others (i) Vietnamese 57 Bùi Thế Hưng, “Một số vấn đề lý luận thực tiễn hợp đồng liKxăng nhãn hiệu hàng hoá Việt Nam”(Theoretical and practical issues on trademark licensing agreement in Vietnam), Master’s thesis, Ho Chi Minh City, 2006 (ii) Foreigner 58 Bardehle Pagenberg Partnerschaft, Trademark protection in Europe, Bardehle Pagenberg, 2013 59 Dr Robert B Sanders MAICD, Topic 14: Simplified Intellectual property valuation methods and approaches, presentation in Workshop: “Intellectual Property Valuation”, organized by WIPO in cooperation with The Vietnamese National Office of Intellectual Property (NOIP), 6/2013 60 Rene Joliet, Trademark licensing agreements under the EEC Law of Competition, Northwestern Journal of International Law & Business, vol 5, 1983 61 The Oxford Advanced learner’s dictionary, International student’s Edition, 7th Edition, Oxford University Press, 2006 62 The Oxford Dictionary of law, 7th Edition, Oxford University Press, 2009 63 The Black’s law Dictionary, 9th Edition, West Publishing Co., A Thomson Reuters business, 2009 F Website 64 www.wipo.int 65 www.oami.europa.eu 66 www.europa.eu 67 www.noip.gov.vn 68 www.luatvietnam.vn 69 www.curia.europa.eu 70 www.schwimmerlegal.com 71 www.interbrand.com APPENDIX VIETNAMESE PRACTICE OF TRADEMARK LICENSING AGREEMENT Updated until 12/2011 (Source: http://noip.gov.vn/noip/resource.nsf/vwResourceList/ 9D1FBE4E01003F5047257A4 4002B6E42/$FILE/NOIP_ Annual%20Report%202011_small%20size.pdf) APPENDIX OHIM OFFICE’S RECORDAL APPLICATION FORM FOR COMMUNITY TRADEMARK LICENSE Lastest version on 21/06/2012 (Source: http://oami.europa.eu/ows/rw/pages/QPLUS/forms/ nonelectronic/nonelectronic.en.do) ... competition regulations are only researched under aspect of IPL on Second, under aspect of IPL, the thesis shall merely analyze regulations trademark licensing agreement and some related regulations on. .. greater contract20, which is a main contract This practice is not an exception for trademark licensing agreement In conclusion, there is no norm for definition of ? ?trademark licensing agreement? ??... 02 TRADEMARK LICENSING AGREEMENT UNDER LIGHT OF EU REGULATIONS AND VIETNAMESE LAW 34 2.1 Legal framework on trademark licensing agreement 34 2.2 Clauses of a trademark licensing agreement