EU’S REGULATIONS ON

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 AGREEMENTEXPERIENCE 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 .................................................................................................... 1
CHAPTER 01. OVERVIEW OF TRADEMARK LICENSE .............................. 7
1.1 Concept of trademark license ......................................................................... 7
1.1.1 Trademark license definition ......................................................................... 7
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


1
INTRODUCTION
1. 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 protection 4. 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
1

David I. Bainbridge, Cases & materials in Intellectual Property law, Second Edition, Financial times,
Pitman Publishing, 1999, page 10.
2
See section 1.2 infra.
3
See Appendix 01 infra.
4
See section 1.1.2.2 infra.


2
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 “EU’s regulation on trademark licensing agreement

– Experience for Vietnam” is chosen for the author’s graduation thesis.
2. 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,

5

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).

3
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.

3. 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
6

Nguyễn Thanh Tâm, “Một số kinh nghiệm về 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.
7
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.
8
Bùi Thế Hưng, “Một số vấn đề lý luận và thực tiễn về hợp đồng li-xăng nhãn hiệu hàng hoá tại Việt Nam”,
Master’s thesis, Ho Chi Minh City, 2006.
9
The master thesis only mentioned regulations of those countries in about ½ page for each.


4
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).
4. 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.


5
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.
5. 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.

6. 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

6
references for parties in negotiating and signing their trademark licensing
agreement.
7. The structure of the thesis
The thesis is divided into two main chapters, as defined below:
Chapter 01: Overview of trademark license
Chapter 02:Trademark licensing agreement under light of EU regulations and
Vietnamese law.


7
CHAPTER 01. OVERVIEW OF TRADEMARK LICENSE
1.1 Concept of trademark license
The development of IP and knowledge economy has resulted in an increase in not
only the legal recognition and protection on IPR but also manners of utilising those.
Among many means for using the IP, licensing seems to be one of the most
effective and popular ways. Trademark license, as a typical one of IP license, is not
an exception.
1.1.1 Trademark license definition
In fact, there is no standard for definition of “trademark license” concept. The
Agreement on Trade Related Aspects of Intellectual Property Rights (hereinafter
referred to as TRIPs)11, which is the international document aiming at harmonizing
Members’ law and providing standard for protecting IP under aspect of trade, has
not provided a clear definition of “trademark license” or any other licenses as well.
It is the same as the Paris Convention for the Protection of Industrial Property
(hereinafter referred to as Paris Convention)12. Every national law can provide its
own definition of “trademark license”.
In general, “license” often means giving others an “official permission to do, own,

or use something” or an official document showing that permission13. In a legal
sense, “license” is a “formal authority” 14 or permission given to a person to
“commit some act that would otherwise be unlawful” 15 . On those grounds, the
concept of “trademark license” can be generally construed as a permission of the
trademark’s proprietor that allows other party or parties, as the licensee(s), to have

11

The TRIPS Agreement is Annex 1C of the Marrakesh Agreement Establishing the World Trade
Organization (WTO), signed in Marrakesh, Morocco on 15/4/1994.
12
Paris Convention for the Protection of Industrial Property - Paris Convention was concluded on 20/3/1883
at Paris, France. It was revised at Brussels on 14/12/1900, at Washington on 02/6/1911, at The Hague on
6/11/1925, at London on 02/6/1934, at Lisbon on 31/10/1958 and at Stockholm on 14/7/1967, and it was
amended on 28/9/1979. At present, the Convention has 174 contracting parties. Vietnam has been the
contracting party since 1949. The information was last updated on www.wipo.int on 07/6/2013.
13
The Oxford Advanced learner’s dictionary, International student’s Edition, 7th Edition, Oxford University
Press, 2006, page 850.
14
The Oxford Dictionary of law, 7th Edition, Oxford University Press, 2009, page 325.
15
The Black’s law Dictionary, 9th Edition, West Publishing Co., A Thomson Reuters business, 2009, page
1002.


8
rights to utilise his trademark lawfully. In other words, a trademark license gives the
licensee the opportunity for using trademark legally under consent of proprietor.
Basing on that general concept of trademark license, regulations of EU and

Vietnamese law on IPR have also provided definitions for this concept.
Vietnamese IPL in Article 141(1) has adopted a definition of license that is a
“permission by the owner of such industrial property object for another
organization or individual to use the industrial property object within the scope of
the owner's right”. This definition covers industrial property right license in
common, which includes trademark license. Accordingly, trademark license is the
permission that the proprietor grants within his rights on trademark to others for
using that trademark. The definition also defines clearly that no one but the
proprietor can grant a license 16 . Besides, this provision defines an important
principle of license that is the proprietor, as the licensor concurrently, is only
allowed to grant license “within the scope” of his right conferred by the trademark.
This is one of the most important principles of license17.
Unlike Vietnamese law, the EU regulations do not provide any definition in
legislative texts. The “trademark license” concept is only defined in The Guidelines
Concerning Proceedings Before the Office for Harmonization In the Internal
Market (hereinafter referred to as The Guidelines) and The Manual concerning
proceedings before the office for Harmonization in the Internal market (hereinafter
referred to as The Manual) 18 . Those documents have defined a concrete and
unanimous definition of trademark licensing agreement, not a general definition of
industrial property license. Accordingly, the Introduction of The Guidelines as well
as The Manual has provided that “trademark license” is:
A contract by virtue of which the proprietor of a trade mark (the
licensor), whilst retaining his proprietorship, authorizes a third person
(the licensee) to use the trade mark in the course of trade, under the

16

Though the licensee can grant a sub-license, it is by consent of the proprietor. See section 1.4.3 infra.
See section 1.3.2 infra.
18

The Guidelines and The Manual are legal texts but not legislative texts. See section 2.1 infra.
17


9
conditions and within the limitations and contents provided in the said
contract.
Accordingly, it has determined not only a concrete definition but also some features
as well as factors of a trademark license. Firstly, two parties of the license are the
licensee, who is a party granted a license, and the licensor, who is the proprietor of
the licensed trademark. Secondly, the proprietor keeps his proprietorship on
trademark regardless of quantity of licenses he had granted. It means that licensing
does not remove the proprietorship of the licensor on trademark. Thirdly, granting
trademark license is for the purpose of using trademark “in the course of trade”
only. Any license of trademark for other purposes, for instance, individual purpose,
will not be recognized as license under law, as those do not relate to the features of
trademark, which connect closely with the trade activities. Fourthly, content in the
licensing agreement determines clearly the licensee’s rights extent and manners of
exploiting trademark. The licensee can only utilise the licensed trademark within
the content of those. Fifthly, the proprietor is the only entity having right to give
permission for using his trademark to others19.
The definitions of trademark license under regulations of EU and Vietnam have
similarity, which mainly focus on the features of subject and permission of the
proprietor. However, there are also main differences: (i) Vietnamese regulation
merely defines “license” as permission, while EU’s regulations define “trademark
licensing” as an agreement containing permission; (ii) EU requires trademark
license to be for purpose of trade while Vietnamese IPL does not. In fact, the
definition in EU’s regulations is rather more comprehensive and sufficient than
Vietnamese IPL, as there is no trademark license not forming as an agreement and
as long as trademark is industrial property subject matter, a trademark license

cannot for any other purpose than trade. Besides, under aspect that “agreement”
concept is merely a genuine consent of parties on licensing a trademark but not a
written contract stricto sensu, a trademark licensing agreement can be formed under
many types. First, a trademark licensing agreement can be a solely contract, which
is also known as trademark licensing contract. Second, a trademark licensing
19

See section 1.3 infra.


10
agreement can be clauses in another contract. For instance, a trademark licensing
agreement is part of or a sub-contract of a distribution contract, franchising contract,
or of another licensing contract or of a technology transfer licensing contract. In
fact, an IP license is usually a part of a 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”.
However, a definition often defines natures of trademark license, which are: (i) it is
an agreement between two parties; (ii) it is an allowance of the licensor within his
proprietorship. Generally, a trademark licensing agreement is an agreement in
which the proprietor allows others to use his trademark, which belongs to his
proprietorship, in a determined term, territory and under conditions in agreement.
1.1.2 Trademark – the subject of trademark license
1.1.2.1 “Trademark” concept
“Trademark” is not a new concept in trade practices. Historically, trademarks
appeared and were used in the ancient age already. About 3000 years ago, the
Indian craftsmen were the first ones who affixed trademark on their products by
engraving their signatures on artistic creations before sending them to Iran for
selling. Approximately 2000 years ago, Chinese producers also marked their goods
before selling them in the Mediterranean area. At the same time, there were about a

thousand different marks used to be put on the Roman pottery.21Trademarks already
arose and were used long time ago for the first purpose of individualizing and
distinguishing products of one provider from others. In common sense, trademark
represents for the goodwill and reputation of its proprietor although “the identity of
the company is unknown”22. It can be construed due to the nature of trademark on
individualization 23 and distinguishability 24 . Those are two main features of a
trademark and sometimes considered as two main functions of trademark25.
Guy Tritton, Intellectual property in Europe, 3rd Edition, Thomson, Sweet & Maxwell, 2008, page 793.
WIPO, WIPO Intellectual Property Handbook: Policy, Law and Use, 2nd Edition, WIPO, 2004, page 67.
22
Xuan-Thao N.Nguyen, Robert W.Gomulkiewicz, Danielle Conway-Jones, Intellectual Property, Software,
and Information licensing: Law and Practice, BNA Books, 2006, page 324.
23
In common sense, individualization is ability of trademark informing to consumers the defined undertaking
to which products or services bearing trademark belongs; in other words, the origin of products or services
20
21


11

In general, under trade aspect, “trademark” is “a name, symbol or design that a
company uses for its products and that cannot be used by anyone else” 26 . This
general definition provides signs that are often used as trademark as well as
mentions indirectly the individualization feature of trademark.
In jurisprudence, it often defines trademark as “any sign that individualizes the
goods of a given enterprise and distinguishes them from the goods of its
competitors” 27 . Accordingly, trademark can be “any sign”, provided that it has
ability of individualization and distinguishability. Besides, different legal texts also
provide a variety of definitions of trademark as well.

The TRIPs Agreement provides an understandable definition 28 of trademark in
Article 15(1). Accordingly, trademark is “any sign or any combination of signs,
capable of distinguishing the goods or services of one undertaking from those of
other undertakings, shall be capable of constituting a trademark”. This definition
defines clearly signs

that could be trademarks as well as

trademark’s

distinguishability feature. In general, Article 15(1) of TRIPs Agreement has
bearing trademark. However, it does not mean that the trademark have to inform to consumer the “actual
person” that has produced the products or the one selling those (WIPO, WIPO Intellectual Property
Handbook: Policy, Law and Use, 2nd Edition, fn. 21supra, page 66). In fact, consumer does not need to
know all of information of the original undertaking. They merely need to know which undertaking has
responsibility for those products or services they chose. Hence, in case they are not satisfied, they can know
the original undertaking of those and thus can make complain or just decide not to choose those from the
market anymore. Otherwise, consumer can have exactly impression on the original undertaking and from
there on they can continue to choose those products or services from that original undertaking, recognized by
its trademark. It thus helps consumers to distinguish products or services bearing that trademark with others.
Therefore, consumers do not know any other detailed information of the undertaking having those products
or services; they merely know that they trust in that undertaking on the satisfying quality of products or
services. Those consumers’ belief results in the goodwill and reputation of the proprietor of trademark.
24
Distinguishability is the ability of trademark helping consumers to distinguish products or services bearing
trademark of an undertaking from those of others relevant on the market. Distinguishability is often
considered as not only the function of trademark but also a requirement for a sign to be legally protected.
25
In fact, there are different definitions of the “trademark”, and some often only mention one of
individualization or distinguishability. However, those always need to be considered together under aspect of

interdependence and cannot be separated, though definition of “trademark” concept does not mention both
(WIPO, WIPO Intellectual Property Handbook: Policy, Law and Use, 2nd Edition, fn. 21supra, page 66).
Thus, it seems that those are always put in a very close relationship, when one is mentioned that means the
other one is automatically grasped.
26
The Oxford Advanced learner’s dictionary, International student’s Edition, 7th Edition, fn. 13 supra, page
1568.
27
WIPO, WIPO Intellectual Property Handbook: Policy, Law and Use, 2nd Edition, fn. 21 supra, page 66.
28
Due to its mission is harmonizing Member countries’ law and providing norm for protecting IP under
aspect of trade, definition in TRIPs Agreement has to be as general and sufficient as possible, because it
would be the standard for Member countries to provide on definition of trademark.


12
provided two main elements of a trademark that is: (i) constitution of sign(s) and (ii)
distinguishability. Besides, it also defines that trademark can be applied for both
products and services.
In EU, there is a Directive on approximating the national laws of Member States on
trademark that is 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 (hereinafter referred to as Directive 2008/95/EC)29. Article 2 of this
Directive provides:
A trademark may consist of any signs capable of being represented
graphically, (…) provided that such signs are capable of distinguishing
the goods or services of one undertaking from those of other
undertakings.
This provision defines trademark by providing signs that could be considered as
trademark as well as requirement on distinguishability. In fact, “sign” is a criterion

to distinguish trademark with other information on products that also informs
consumers of origin of products, for instance, geographical indication, labels of
products, trade name, etc. Besides, under EU’s regulations, trademark must have the
ability of being represented graphically. This requirement is different from other
definitions on trademark of international texts and of Vietnamese IPL. Technically,
the ability of being represented graphically is often considered as the capacity of
being represented clearly, precisely, by “writing, drawing or by a graph – that is,
by a diagram representing a mathematical or chemical relationship”30in a “selfcontained, easily accessible, intelligible, durable and objective” 31 manner. It is
sometimes considered as restriction on protecting invisible trademark such as
audible and olfactory trademark, which rarely has the ability of being represented
graphically, in EU. However, it is still not a clear base, as this requirement covers
signs that are not “visually perceptible” as well 32 , and according to the ECJ in

29

For more information about Directive 2008/95/EC, see section 2.1 infra.
M. M. S. Karki, Nontraditional areas of Intellectual property protection: colour, sound, taste, smell,
shape, slogan and trade dress, Journal of Intellectual property rights, Vol.10, 11/2005, page 500.
31
Bardehle Pagenberg Partnerschaft, Trademark protection in Europe, Bardehle Pagenberg, 2013, page 5.
32
Guy Tritton, Intellectual property in Europe, 3rd Edition, fn. 20 supra, page 265.
30


13
Sieckmann33, “it is not necessary that a mark can be perceived visually provided it
can be represented graphically”34. In fact, there was a case that invisible sign still
can be recognized and protected in EU35.
Vietnamese IPL provides the definition of trademark in Article 4(16) and Article

72(1) as well. Appropriately, trademark is “visible sign” that is “used to distinguish
goods or services of different organizations or individuals”. Unlike EU’s
regulations, the Vietnamese definition does not mention the ability of being
represented graphically of trademark but require directly visibility of trademark36.
Accordingly, Vietnam only recognizes visible trademark but not any other invisible
form such as audible sign or olfactory sign. This point is different from definitions
of trademark in EU as well as many countries, which recognise and protect all
expressed forms of signs including visible trademark, audible trademark and
olfactory trademark. However, this provision of Vietnamese IPL is compatible with
WTO law as the TRIPs Agreement entitles Member countries to provide the
visibility as a condition for protecting sign as trademark in Article 15 (1)37. The
reason for which Vietnam does not recognise invisible trademark is lack of the
ability to examine distinguishability feature of invisible sign38.
33

Case C-273/00 Sieckmann v. Deutsche Patent und Markenamt [2002] E.C.R. I-11737; [2003] E.T.M.R. 37.
Guy Tritton, Intellectual property in Europe, 3rd Edition, fn. 20 supra, page 265
35
The first registered olfactory trademark in EU was in 1999. In a decision on 11/02/1999, the Board of
Appeal of the Office for Harmonization in the Internal Market (Trademarks and Designs) of the European
Community supported the registrability of the olfactory trademark of “the smell of fresh cut grass” for tennis
balls (R 156/1998-2) (WIPO, WIPO Intellectual Property Handbook: Policy, Law and Use, 2 nd Edition, fn.
21supra, page 71).
36
Article 72 of Vietnamese IPL provided: “A mark shall be eligible for protection when it satisfies the
following conditions: (1.) It is a visible sign in the form of letters, words, drawings or images including
holograms, or a combination thereof, represented in one or more colours; (2.) It is capable of distinguishing
goods or services of the mark owner from those of other subjects.”
37
Article 15 (1) of TRIPs Agreement provided in the last sentence: “… Members may require, as a condition

of registration, that signs be visually perceptible”. However, the provision of visibility in Article 15 (1) of
TRIPs Agreement does not mean that it constrains Member countries from recognising and protecting
audible and olfactory or any other invisible trademark. In fact, many countries has allowed for the
registration of audible signs (sounds such as “the roar of the lion that precedes films produced by MGM”),
olfactory signs (smells, such as perfumes). Otherwise, many other countries have set limits as to what may be
registered as a trademark, generally allowing only signs that are visually perceptible or can be represented
graphically. (WIPO, Understanding industrial property, WIPO Publication No. 895(E), page 12).
38
In fact, it requires ability of manpower and development of technology to have accurate examination on
distinguishability of invisible sign. Meanwhile, those elements in Vietnam are still not enough to have that
examination. In Vietnam, the historical development of IP as well as industrial property field has just started
since 1980s of the 20th century. It is not a long time for practice of IP to develop well. Hence, in trademark
field, Vietnam does not have enough ability in technology as well as manpower to examine invisible signs,
34


14

In general, regardless of different definitions of trademark, this concept is generally
defined unanimously as sign affixed on products or services that is used to
individualize and distinguish those of the proprietor from those of others.
Trademark helps consumers to remember and recognize products or services of an
identified undertaking.
1.1.2.2 Trademark as subject of license in EU and Vietnamese law
In EU, there are types of trademark that can be subject of trademark license. The
Directive 2008/95/EC defines obviously in Article 1 the scope of Directive as well
as trademark that is able to be subject of trademark license39. Accordingly, Article 1
provides that:
“This Directive shall apply to every trade mark in respect of goods or
services which is the subject of registration or of an application in a

Member State for registration (…), or which is the subject of a
registration or an application for registration in the Benelux Office for
Intellectual Property or of an international registration having effect in a
Member State.”
Firstly, within the national protection, the proprietor can license trademark that is
registered in Member State. It is trademark that has been filled and recorded with
the appropriate authorities of each Member States. According to general principle,
registered trademark is trademark that is already registered or “for which an
application for registration has been filed”40. Within the national protection, the
proprietor can only license those trademarks within the national extent as well.

which require a high level of examination such as audible sign and olfactory sign. Besides, the high level of
development also relates to practice of creating opportunities to undertakings for having ability of creating
those audible and olfactory trademarks. Hence in Vietnam, there is not much undertaking that has ability to
create those trademarks either. Therefore, Vietnam does not have a context for those invisible trademarks to
be recognized and developed.
39
Directive 2008/95/EC covers trademark license by Article 8, which provides: “A trademark may be
licensed (…)”. Hence, it can understand that trademark within the scope of the Directive can all be subject of
trademark license under light of this Directive.
40
Charles Gielen, Verena von Bomhard, Concise European trademark and design law, Wolters Kluwer, Law
& Business, 2011, page 328.


15
Secondly, within the Benelux territorial protection, the proprietor can license
trademark that is registered in the Benelux Office for IP41. It is trademark that is
entitled of a wider extent of protection than national trademark. However, is not
protected within the entire of EU yet. As long as those trademarks are within

Benelux system, the proprietor can only license those within the Benelux territory,
which includes the Kingdom of Belgium, the Grand Duchy of Luxembourg, and the
Kingdom of Netherlands42.
Third, within the protection of the whole of EU territory, the proprietor can license
the Community trademark (hereinafter referred to as CTM). In general, this is
trademark that is protected and can be licensed within the entire of EU. CTM is the
specific trademark of EU, which is covered under Council Regulation (EC) No.
207/2009 of 26 February 2009 on the Community trademark (hereinafter referred to
as the Regulation 207/2009)43. CTM is trademark being registered “in accordance
with the conditions” provided in this Regulation and “in the manner herein
provided “by the Regulation44. This definition does not provide basic features of
trademark (which is individualization, distinguishability or ability of being
represented graphically) as usual. Actually, those are mentioned as condition for
sign to be protected as CTM provided in Article 4 of the Regulation45. The CTM
not only has basic features of a basic trademark but also has the specific feature that
is the “unitary character”, which means the CTM will “have equal effect
throughout the Community”46. It is the most basic nature of CTM, which allows
CTM to be protected equally regardless of the national origin of the proprietor. The
unitary character of CTM expresses in principle that a CTM is protected,
41

The Benelux Treaty on IP (BTIP) was adopted on 25/02/2005. Information on
last visit on 11/7/2013.
42
Article 1(16) BTIP.
43
For more information on the Regulation 207/2009, see section 2.1 infra.
44
Article 1(1) of Regulation 207/2009.
45

Article 4 of the Regulation 207/2009 has provided: “A Community trademark may consist of any signs
capable of being represented graphically, particularly words, including personal names, designs, letters,
numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing
the goods or services of one undertaking from those of other undertakings”. In common sense, a trademark
cannot be protected at Community level without satisfying conditions to be protected at national level.
Hence, the necessary conditions for a trademark to be protected at Community level are kind of similar to
conditions for protecting trademark in EU in general.
46
Article 1(2) of Regulation 207/2009.


16
surrendered, transferred, revoked and invalidated by means of only one procedure
and for the entire of EU47. It is essential to make CTM accomplish its reason to be
existed48. If it does not have unitary character, CTM cannot help promote the single
market of Community.
Fourthly, within the international protection, the proprietor can license international
registered trademark. It is trademark that is registered under international procedure
and protected in territory of many countries, which are member of the international
procedure. For instance, trademark that is registered under Madrid and its Protocol
system is international trademark.
In contrast, under light of Vietnamese law, the proprietor can only license national
and international registered trademark. Although there is not an obvious provision
defined that, it can be recognized through some regulations of Vietnamese IPL49.
Accordingly, Vietnamese IPL regulates that licensing trademark is within content of
exclusive right50, and an entity can only be a proprietor if he is granted a Certificate
for protection of trademark, which means only if the trademark is registered, he can
become the proprietor.
47

Tobias Cohen Jehoram, Constant van Nispen, Tony Huydecoper, European Trademark Law: Community
trademark law and Harmonized national trademark law, Wolters Kluwer International, 2010, page 470;
Marketa Trimble, Extraterritorial intellectual property enforcement in the European Union, Southwestern
Journal of International law, vol. 18, 19/01/2012, page 234; Luis-Alfonso Durán, The new European Union
Trademark Law, Denver Journal of International Law and Policy, vol. 23:3, 1995, page 498.
48
The reason that EU creates the Community trademark has been provided in Recitals 2 and 3 of Regulation
207/2009. Accordingly, Recital 2 provided: “In order to create a market of this kind and make it
increasingly a single market, not only must barriers to free movement of goods and services be removed and
arrangements be instituted which ensure that competition is not distorted, but, in addition, legal conditions
must be created which enable undertakings to adapt their activities to the scale of the Community, whether in
manufacturing and distributing goods or in providing services. For those purposes, trademarks enabling the
products and services of undertakings to be distinguished by identical means throughout the entire
Community, regardless of frontiers, should feature amongst the legal instruments which undertakings have at
their disposal”. On that ground, it has to accomplish two missions for the purpose of creating and promoting
the single market in EU. Firstly, “barriers to free movement of goods and services” have to be removed.
Secondly, there must be “legal conditions” allowing undertakings to “adapt their activities to the scale of the
Community”. Hence, trademarks that can distinguish products and services of undertakings from others
throughout the entire Community market “regardless of frontiers” should be attached much importance to. It
is the reason for creating the Community trademark that can have effect within the whole EU.
49
Accordingly, Article 123 of Vietnamese IPL provides right of the proprietor of trademark as well as of
other industrial property rights. Meanwhile, the definition of “proprietor” is regulated in Article 121 (1),
which is “an organization or individual who is granted a protection title for such trademark by the
competent body or who has an internationally registered trademark recognized by the competent body or
who has a well-known trademark”.
50
See section 1.1.2.3 infra.

17

1.1.2.3 Grounds for trademarks to be subject of license
Licensing is a legal manner for using trademark that law provides for proprietor. In
fact, there are legal grounds for a trademark to be subject of trademark license.
Firstly, the law always considers trademark as object of property existing
separately from undertakings. Hence, trademark can be individual subject of any
transfer and license transaction, equally regardless of its type51 or expressed form52.
This principle is one of the most basic grounds for a trademark to be licensed
between undertakings in fact. It often states under legal provision or merely is a
principle under jurisprudence. For instance, Recital 11 of Regulation 207/2009
provided that:
A Community trademark is to be regarded as an object of property,
which exists separately from the undertakings whose goods or services
are designated by it. Accordingly, it should be capable of being
transferred, subject to the overriding need to prevent the public being
misled as a result of the transfer. It should also be capable of being
charged as security in favor of a third party and of being the subject
matter of licenses.
Accordingly, the proprietor can license his CTM because it is an “object of property
which exists separately from the undertakings” despite of being affixed on products
or services. Directive 2008/95/EC does not provide this ground clearly. However, it
is still considered in fact as a principle of protecting IPR. It is similar to Vietnamese
law, which does not provide any regulation that contains this principle, even though
it is still understood in fact.
Secondly, the proprietor of trademark is legally entitled to give permissions to other
parties on exploiting his trademark under trademark license. Technically, it results
from the exclusive rights of the proprietor conferred from trademark. As long as the
51

There are many types of trademark, such as: individual trademark, collective trademark, collective
trademark, certification trademark, integrated trademark (in Vietnamese IPL) or guarantee trademark (in
EU’s law); normal trademark or well-known trademark, trademark for products or for services, etc.
52
There are many types of expressed sign constitute a trademark, such as: visual trademark or invisual
trademark (audible, olfactory trademark); word mark, color mark, shape mark, three – dimensional
trademark, trademark consists of single sign or combination sign, etc.


18
proprietor has exclusive right on his trademark, he has sufficient rights to use or
determine trademark, and also prevents third parties from using his trademark
without allowance. The proprietor can decide to utilise the trademark himself, or
assign it, or allow others to use it by a licensing agreement. Hence, licensing a
trademark is within content of exclusive rights of the proprietor. Those exclusive
rights of proprietor are effortlessly seen in laws on trademark. In fact, both
Vietnamese and EU’s regulations provide rights of the proprietor in licensing as a
legal ground for a trademark to be subject of trademark license. Specifically, under
EU’s regulations, those contents state in Article 5 of Directive 2008/95/EC and
Article 9 of the Regulation 207/200953. However, EU’s regulations do not provide
clearly that the proprietor has the right to license his trademark but consider it as a
natural principle conferred from exclusive of proprietor. Hence, those often do not
provide licensing within content of exclusive right, but as a sole right of proprietor
stating in Article 8 of the Directive 2008/95/EC54 and Article 22 of the Regulation
207/2009 55. Under light of Vietnamese law, exclusive rights of the proprietor state
Article 123 of Vietnamese IPL providing on rights of proprietor. Unlike EU’s
regulations, Vietnamese IPL, by this provision, has provided clearly that granting
trademark license is within the content of exclusive right of the proprietor.
Accordingly, the proprietor has right to “use”, “give permission to others to use”,
“prevent others from using and dispose of” trademark as well as any other

industrial property right.
Thirdly, legal provisions consider that licensing is a manner for the proprietor to
exploit his trademark. On this ground, the proprietor can use his trademark by
licensing it legally. Specifically, Article 10(2) of Directive 2008/95/EC provides
53

Artcile 5 of the Directive 2008/95/EC provided that: “1. The registered trademark shall confer on the
proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his
consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to
goods or services which are identical with those for which the trade mark is registered; (b) any sign where,
because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or
services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the
public; the likelihood of confusion includes the likelihood of association between the sign and the trade
mark”. Those are similar to contents of Article 9 of the Regulation 207/2009.
54
Article 8 of the Directive 2008/95/EC provided that: “A trade mark may be licensed for some or all of the
goods or services for which it is registered and for the whole or part of the Member State concerned”.
55
Article 22 of the Regulation 207/2009 provided that: “A Community trade mark may be licensed for some
or all of the goods or services for which it is registered and for the whole or part of the Community”.


19
that “use of the trade mark with the consent of the proprietor or by any person who
has authority to use a collective mark or a guarantee or certification mark shall be
deemed to constitute use by the proprietor”. The Regulation 207/2009 also provides
the similar provision in Article 15(2) as well56. It is similar to Vietnamese IPL in
Article 123(1), Article 124(5) and Section 2 of Chapter X)57.
1.2 Roles of license and trademark license
In general, the trademark license establishes roles for all the licensor, the licensee

and society with consumer as well.
1.2.1 For the licensor – the proprietor
Due to nature of trademark on representing for reputation of the proprietor, the
proprietor often wishes to license his trademark for popularizing his goodwill.
Besides extending reputation, licensing a trademark also brings many advantages to
the proprietor.
(a) Trademark license brings lots of economic benefits to the proprietor. By
licensing, the proprietor while exploiting trademark himself can allow many others
to use his trademark concurrently. Hence, the proprietor can obtain profit from both
exploiting himself and from other licensees. In fact, the proprietor often licenses his
trademark for obtaining more profits owning to financial agreements in the license.
It bases on nature that the more value trademark has, the higher license price it
takes. Obviously, the proprietor’s goodwill and reputation always attach to a
trademark, especially international well-recognized trademark58. In fact, some wellknown trademarks, i. e. Coca Cola, which has value of 77, 839 billion USD59, can
bring to its proprietor big profits in trade. This is the most important role of
trademark license playing on the proprietor.

56

Article 15(2) of the Regulation 207/2009 provided that: “Use of the Community trademark with the
consent of the proprietor shall be deemed to constitute use by the proprietor”.
57
In Vietnamese IPL, Article 123(1) provides right of the proprietor in using his trademark, including using
trademark himself (under Article 124(5)) and licensing it (under Chapter X-section 2).
58
Jim Keon, Chapter 5: Intellectual property rules for trademarks and geographical indications: important
parts of the new world trade order, in Calos M. Correa, Abdulqawi A. Yusuf, Intellectual property and
International trade: the TRIPs Agreement, 2 nd Edition, Wolters Kluwer, 2008, page 151.
59
Information on Best global brand 2012, last visit on 11/7/2013.

20
Therefore, the licensing of a trademark can help the proprietor to exploit their
trademark in a more flexible and effective way. Moreover, the more popular that
trademark is used in practice, the more it can approach consumers, which can
increase value of trademark as well as economic profits for the proprietor.
(b) Trademark license plays a role on extending the goodwill and reputation of
proprietor, basing on the feature of trademark that is “in connection with the
marketing of goods”60or services. Trademark is the representation of goodwill and
reputation of its proprietor. Hence, the proprietor often desires to grant as many
trademark licenses as possible for expanding its goodwill and reputation into
“different fields of use and geographical territories” 61 . As long as trademark is
unchanged, it can remain identifying its proprietor; by this, the proprietor can
extend goodwill in market through the large number of products or services bearing
his trademark. Basing on the nature of “source identification” – individualization of
trademark, the more products or services bearing trademark are put on market, the
broader its proprietor’s reputation is.
(c)Trademark license helps the proprietor protect his goodwill and reputation. It
defends the proprietor from other competitors who “would take advantages of the
position and reputation of the trademark by selling goods improperly bearing that
trademark”62. When an undertaking affirms its position on the market by goodwill
and reputation, there will be many other competitors that want to do business by
taking advantages of those reputations. If those competitors cannot use other’s
trademark legally under a license, they may have to take those advantages
unlawfully by manufacturing counterfeit products and affixing on a trademark that
is similar to or the same as trademark of other’s, etc. In those circumstances, it will
affect to reputation and goodwill of the proprietor, because counterfeit products
often cannot satisfy consumers as the proprietor’s products do. Therefore, if the
proprietor can grant license, other parties, who want to take advantages from

60

WIPO, Understanding industrial property, fn. 37 supra, page 12.
Xuan-Thao N. Nguyen, Robert W. Gomulkiewicz, Danielle Conway-Jones, Intellectual Property,
Software, and Information licensing: Law and Practice, fn. 22supra, page 325
62
Paul Craig & Gráinne de Búrca, EU law – text, cases, and materials, 3rd Edition, Oxford University Press,
2003, page1093.
61