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THE
COUNCIL OF MINISTERS
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No.
201-HDBT
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Hanoi,
December 28, 1988
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DECREE
ON LICENSING
Pursuant to the Law on
Organization of the Council of Ministers dated 4 July 1981;
Pursuant to Decree No. 35- CP dated 9 February 1981 regulating the functions,
powers and responsibilities of Ministers and functions of the Ministries in a
number of administration areas;
In order to simplify the task of organizing and managing activities concerning
industrial property rights;
On the proposal of the Chairman of the State Committee for Science and
Technology;
DECREES:
Article 1
Issued
with this Decree are Regulations on the purchase and sale of the right to use
inventions, utility solutions, industrial designs, trademarks on goods and
technical secrets (hereinafter referred to as Regulations on Licensing)
Article 2
The
Regulations shall be of full force and effect as of the date of their signing.
Any previous regulations which are inconsistent with the provisions contained
in the Regulations are hereby repealed.
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Ministers,
Chairmen of State committees, heads of other bodies under the Council of
Ministers and chairmen of the people's committees of the provinces, cities and
special zones under central authority shall be responsible for the
implementation of this Decree.
FOR
THE COUNCIL OF THE MINISTERS
VICE CHAIRMAN
Vo Van Kiet
REGULATIONS
ON LICENSING
Chapter I
GENERAL PROVISIONS
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1. These
Regulations apply to the purchase and sale of the right to use inventions,
utility solutions, industrial designs, trademarks on goods and technical
secrets (hereinafter referred to as licensing) and shall apply to all
individuals and legal entities of the Socialist Republic of Vietnam who engage
in lawful research, production and business activities.
2. Foreign individuals and legal
entities (hereinafter referred to as foreigners) may also carry out licensing
activities in accordance with these Regulations an the laws of the Socialist
Republic of Vietnam and the international agreements to which Vietnam is a
party.
Article 2
1. The
objects of licensing are the rights to use inventions, utility solutions,
industrial designs and trademarks on goods which are legally protected.
2. The objects of licensing may
also be know-how, data, documents and secret technical information (hereinafter
referred to as technical secrets), and design sketches and models of goods
relating to the above objects, even where the documents of protection for these
objects have expired.
Article 3
1.
Individuals and legal entities (including foreigners) may sell only those
objects of licensing (referred to in article 2 of these Regulations) which are
owned by them, or those objects of licensing in respect of which they have the
right to sub-licence in an exclusive licensing contract or pursuant to
paragraph 5 of article 6 of these Regulations.
2. With respect to inventions
owned by the State (in respect of which inventor's patents have been granted
which are still valid), the legal entities, i.e. the State agencies, State
enterprises or State-private joint venture enterprises receiving the patents
of public service inventions, or the authors of the inventions, are authorised
to grant licensing rights to collective or private economic unit and to sell
technical secrets which are related to the patented inventions.
3. Vietnamese individuals and
legal entities must receive permission from the State Committee for Science and
Technology before proceeding with the negotiation and granting of licensing
rights to foreigners.
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1. All
legal entities of all economic sectors have the right to purchase licensing
rights (including those from foreigners) to promote their production and
business provided such purchase will increase efficiency.
2. The purchase of licensing
rights in order to extinguish or limit the use of the object of licensing for
the purpose of illegal competition or frustration of technological progress is
strictly prohibited.
Chapter II
LICENSING CONTRACT
Article 5
1.
Licensing shall take place by way of contract in writing
2. A licensing contract is a
legal document which sets out the obligations of the contracting parties for
the purposes of establishing, modifying or suspending the relation, obligation
and rights of the parties in relation to the objects of licensing referred to
in article 2 of these Regulations
Article 6
A
licensing contract shall not contain provisions which:
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2. Unreasonably control the
market price of the product produced under the licence.
3. Forbid the licensees to make
improvements to and perfect the object of the licensing or which forbid the
licensee to utilize similar technology of other individuals or legal entities.
4. Forbid the licensee to
continue utilizing the object of licensing after expire of the contract (except
for trademarks)
5. Forbid the licensee to grant
an exclusive sub-licence to a third party which is engaged in lawful production
and business activities in Vietnam.
In certain circumstances and
particularly when required by the national economy, defence and security and
proposed by the administrative agency concerned, the State Committee for
Science and Technology may approve licensing contracts with foreigners which
contain provisions that are otherwise prohibited by this article.
Article 7
1. The
duration of a licensing contract shall not exceed seven years from the date of:
* signing of the contract
(contracts between domestic signatory parties);
* approval of the contract by the
State Committee for Science and Technology (contracts with foreigners).
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* the documents of protection of
the objects of licensing expire;
* the contract is terminated in
accordance with those cases provided for in article 17 of these Regulations.
Chapter III
SIGNING, APPROVAL AND
REGISTRATION THE LICENSING CONTRACT
Article 8
The
parties to a licensing contract shall have the legal standing and capacity
necessary to perform the obligations agreed upon the contract.
Article 9
Licensing
contracts between individuals and legal entities within the country shall
strictly observe the procedure for signing of economic contracts stipulated by
the State and shall be registered and filed with the Inventions Department in
accordance with article 14 of these Regulations.
Article 10
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1. Before proceeding with
licensing activities, legal entities which are State agencies or enterprises or
State-private joint venture enterprises shall report to and obtain the approval
of their supervising administrative agency (ministry, agency of the same level
as a ministry, people's committee of province, city or special zone under
central authority).
In the case of the sale of
licensing rights to foreigners, individuals and legal entities the sale shall
be performed in accordance with the provisions contained in paragraph 3 of
article 3 of these Regulations.
2. The following basic
organizations or units (hereinafter referred to as organizations permitted
export and import licences) may negotiate and sign licensing contracts with
foreigners:
* export and import
organizations permitted by the State to sign licensing contracts with
foreigners;
* organizations permitted by the
State to provide services in relation to licensing contracts with foreigners;
and
* basic units permitted by the
State to enter into economic co-operation with foreigners.
The above organizations permitted
export and import licences shall in the signing of contracts with foreigners,
comply with the regulations and follow the guidance of the Ministry of Foreign
Economic Relations.
3. Individuals who and legal
entities which (other than those referred to above) wish to engage in licensing
with foreigners may select and delegate licensing work to one of the
appropriate licence exporting and importing organizations referred to above.
The delegation shall be by way of contract and the fee for the service shall be
agreed upon by parties.
Article 11
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Article 12
1. Within
thirty (30) days of the date of signing the licensing contract with foreigners,
the individual or legal entity engaged in the licensing shall be responsible
for establishing and filing a complete application for approval of the
licensing contract by the State Committee for Science and Technology. Where the
legal entity is a State agency, State enterprise or State-private joint
venture enterprise, a copy of the contract shall be sent to the supervising
State agency.
2. An application for approval
of the licensing contract shall consist of:
* the application for the
licensing contract;
* the licensing contract in
Vietnamese and foreign languages; and
* copies of the titles of
protection of the objects of the licensing.
Article 13
1. Within
thirty (30) days from the date of its receipt of the application for approval
of the licensing contract, the state Committee for Science and Technology shall
respond to the application for approval and may extend this period for response
by up to sixty (60) days, but in doing so must officially notify the applicant
in writing for the reason for the extension.
2. If after thirty (30) days
from the date of its receipt of the application for approval there is no
notification of extension of the period for consideration, or if after ninety
(90) days from the date of its receipt of the application when there has been
notification of extension, the State Committee for Science and Technology has
not issued a decision to refuse to approve the licensing contract, it shall be
deemed approved.
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Article 14
1. After
approval of the licensing contract (with foreigners) or after signing of the
contract (between domestic parties), the licensing contract shall be registered
and filed with the Inventions Department in order that the transfer of the
object of the contract may be legally recognized.
2. The foreign party which
applies for registration of the licensing contract at the Inventions Department
must do so through a representative recognized by the competent bodies of
Vietnam.
3. An applicant for registration
of a licensing contract must pay a registration fee as prescribed.
4. An application for registration
of a licensing contract shall contain:
* an application for
registration of a licensing contract;
* the approved licensing
contract (if signed with foreigners) or the signed licensing contract (if
signed between domestic parties); and * a receipt of payment of the licensing
contract registration fee.
5. After receiving from both
parties to the contract the applications for licensing contract registration,
the Inventions Department shall issue certificates of licensing contract
registration, record the contract in the register of licensing contracts and
publish the transfer of the right to use in the industrial property gazette of
the Inventions Department
Article 15
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2. Individuals who and legal
entities which deliberately fail to carry out their obligations of registering
and obtaining approval of licensing contract may, depending on the degree of
damage caused by such failure, be subject to administrative penalty, fines or
criminal prosecution.
Article 16
After the
licensing contract has taken effect, Vietnamese individuals who and legal
entities which, have opened and maintain accounts at banks shall send a copy of
their contract to the authorized economic arbitration body for monitoring.
Chapter IV
IMPLEMENTATION OF THE
CONTRACT AND DISPUTE RESOLUTION
Article 17
1. After
the licensing contract has taken effect, the parties to the contract shall be
responsible for performing their obligations in relation to the content and
quality of the work and within the time agreed upon therein.
2. During performance of the
contract, the parties may agree to substitute, add to and amend the provisions
previously agreed upon. All substitutions, amendments and additions shall be
made unanimously in writing; and in the case of contracts with foreigners, they
shall take effect only upon approval being granted in accordance with the
provisions of Chapter III of these Regulations.
3. A licensing contract may be
terminated where:
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* one of the two parties has
breached its obligations to such an extent that the contract cannot be
performed and the party causing the breach even though given written notice of
ninety days by the other party, is unable to rectify it;
* it is impossible to perform
the contract, due to force major, in which case the party claiming force major
must notify the other party within seven days;
* a decision to terminate by an
arbitration body has been made.
4. No later than fifteen (15) days
after the decision to terminate has been made, the individuals and legal
entities concerned shall notify the responsible State body, if any, and the
Inventions Department . The termination of a licensing contract shall be
registered by the Inventions Department in its register and shall be published
in its official gazette.
Article 18
The
parties to the licensing contract shall, throughout the duration of the
contract, inform each other of all creative ideas for improving the technology,
utility solutions or further inventions which arise during the application of
the object of licensing. Conditions for the application for newly-discovered
technology shall be determined by the parties to the contract in a supplemental
licensing contract.
Article 19
The parties
to a licensing contract must keep confidential all information and technical
know-how in relation to the technical secrets transferred. This obligation
shall be observed throughout the duration of the contract and even after its
expire until such time as when the information and technical know-how
transferred have become public.
Article 20
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(a) Where one of the two parties
to the contract discovers the possibility of infringement of the transferred
rights, it shall notify the other party in order that both of them may take
preventive measures;
(b) Where a third party
infringes any of the rights transferred in the contract, the licenser has an
obligation to take all measures necessary to compel the infringing party to
stop its acts of infringement and to pay compensation for damages.
In the case of an exclusive
licensing agreement, however, if, after three months from the date of
notification by the licensee, the licenser does not file a complaint, the
licensee may itself take measures to counter the infringement by the third
party. In such cases, the licenser shall assists the licensee.
(c) Where the use of the object
of licensing leads to a complaint of a third party, the licenser shall assists
the licensee in resolving the complaint.
(d) All expenses which arise out
of the need to defend the rights transferred by the licensing contract and all
amounts of compensation collected under a decision of an arbitration body,
shall be divided in accordance with the agreement of the two parties.
Article 21
1. All
disputes which arise between the parties during implementation of a licensing
contract shall be resolved by way of negotiation between them.
2. Where the dispute is unable
to be resolved through negotiation as referred to in paragraph 1 of this
article:
(a) With regard to contracts
between Vietnamese individuals and legal entities:
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* A court shall resolve disputes
which relate to the civil aspects of the licensing contract and the contractual
disputes which are not within the scope of economic arbitration.
(b) With regard to licensing
contracts signed with foreigners, where the parties do not agree on the manner
in which disputes or disagreements are to be resolved, they shall be forwarded
to an economic arbitration body of Vietnam or other body selected by the
parties for resolution of the dispute.
Article 22
1. Where
the parties consider the decisions made in accordance with article 21 to be
unsatisfactory, they may refer the matter to a higher body for resolution of
the disputed. While awaiting resolution, they must abide by the decision.
2. On review, the arbitration or
other body and the parties shall comply with the applicable procedures
stipulated by the State.
Chapter V
FINANCIAL MATTERS AND
ENCOURAGEMENT OF LICENSING
Article 23
1.
Royalties received from licensing shall where the legal entity is a State body,
a State enterprise or a State-private joint venture enterprise, be paid to the
State Treasury, or where the licenser is an individual or legal entity
operating within the sectors of collectives, individuals, or foreigners
licensing in Vietnam, be subject to taxation. The amount to be paid to the
State Treasury or to by paid as tax shall be calculated as follows:
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* On royalties collected by installment
in a licensing contract the duration of which is longer than five years, the
amount to be paid to the State Treasury or as tax shall be equivalent to
fifteen (15) per cent of the value of the contract.
2. In licensing contracts with
foreigners, that payment of tax to the State Treasury shall be paid in the
foreign currency of the contract.
Article 24
In order
to actively promote creative Labour, legal entities which are State agencies,
State enterprises or State-private joint venture enterprise may use twenty five
(25) per cent of the royalties earned from licensing (after deducting expenses
incurred in negotiation, signing and implementing the contract, and paying to
the State Treasury the amount contained in article 23 of these Regulations ) for
the purpose of payment of remuneration to the author (and co-author, if any) of
the invention, to other people who have directly assisted the author in
perfecting the technology licensed, and to the people who have directly
assisted the units to prepare and implement the licensing contract . The
remaining income shall be used by the units to establish funds under the
general guidance of the State.
The heads of these units shall
have the responsibility and power to make decisions regarding the above remuneration,
in accordance with the current regulations and guidance of the State relating
to compensation payable in respect of industrial property.
Article 25
1.
Individuals and legal entities selling licences overseas are authorised to use
foreign currency in accordance with current regulations.
2. The State encourages foreign
individuals and legal entities to use royalties obtained from their licensing
activities in Vietnam for the purpose of investment in production and business
activities in Vietnam, in respect of which they shall be granted the privileges
provided for in the Law on Foreign Investment in Vietnam.
Chapter VI
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Article 26
The
Chairman shall be responsible for issuing circulars, and for organizing with
the bodies concerned, the implementation of and provision of assistance in
relation to these Regulations.
Article 27
Ministers,
Chairmen of State Committees, heads of other bodies under the Council of
Ministers and chairmen of the people's committees of the provinces, cities and
special zones under central authority shall be responsible for issuing detailed
provisions for the implementation of these Regulations within their branches or
localities, and for promoting, checking and inspecting the implementation of
these Regulations.
FOR
THE COUNCIL OF MINISTERS
VICE CHAIRMAN
Vo Van Kiet