CHAPTER 02. CHAPTER 02. TRADEMARK LICENSING AGREEMENT UNDER LIGHT
2.1 Legal framework on trademark licensing agreement
Legal framework is a set of law and regulations covering a practical matter, which in here is practice of licensing a trademark by a licensing agreement. Technically, trademark licensing agreement, which focuses mainly on trademark, is obviously covered by specific provisions of IPL system. Besides, as being an agreement, it is also covered by general contractual principles relating on civil and/or commercial contract. Moreover, competition rules also cover trademark license as well.106
Trademark is a subject matter of IPR, thus a trademark license obviously has to be first and foremost covered by provision of IPL system. In fact, IPL system is the main legal frame on trademark license, which regulates conditions for licensing a trademark legally as well as some basic contents of licensing agreement. The IPL system is expressed under different forms in each country107.
Besides, though trademark licensing agreement has specific features of an IPR license, it still has essence of a civil agreement, which means trademark licensing agreement has to be covered by civil principles applied for contract in general. For instance, trademark licensing agreement has to base on grounds of genuine consent of both parties, requirement on proprietorship of the licensor on subject of agreement–trademark, content of license must be compatible with general legal principle as well as social interest, etc.
Moreover, due to close relationship between performing in IPR and competition on market, trademark licenses are also covered by principle of competition law. This relationship can be construed that as IPR confers exclusive rights to the proprietor to use his IP in general and trademark in particular, the proprietor is thus “able
106 David I. Bainbridge, Cases & materials in Intellectual Property law, Second Edition, fn. 1 supra, page 13.
107 In fact, regulations on IPR license often state together with provisions on IPR that is subject matter of license. However, regulations on IPR subject matter in general and trademark in particular can be stated under different manners. Those can be provided in particular act existing concurrently with other acts on IPR, for instance, the Trademark Act of United Kingdom. Those can also be provided in a common act on industrial property rights, which is divided basing on branches of IPR (see fn. 80 supra), for instance, Law on Industrial property rights of Japan. Those can also be provided in the most common act for IPR, for instance, the Vietnamese Intellectual Property Law.
unilaterally to prevent unauthorized use of its intellectual property and has a monopoly over whether to exploit it itself or through licensing to third parties”108. Besides, contents of licensing agreement are not allowed to infringe competition regulations.
However, in consistence of thesis’s delimitation, the content of trademark licensing agreement will only be analyzed focusing on regulations of IPL and under aspect of competition regulations related.
Legal framework of EU on IPR license in general and trademark license in particular consists of three components: (i) national law of each Member States that provides principle applied for licensing transaction within national territory; and, (ii) the common law of EU, which is often expressed in Directive and Regulation, provides a common policy of the EU on those issues; and, (iii) international treaties in which EU members participate also. However, the thesis only focuses on the common law of EU but not national law of Member States or other international documents. Under aspect of common law of EU, trademark licensing agreement is covered by:
(i) The EU Directive: EU has a common Directive regulating on trademark, which provides common standards for purpose of harmonizing national law of Member States on trademark109 that is Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to harmonize the laws of the Member States relating to trade marks. It is the latest version of The “First Harmonisation Trademarks Directive”, which was the First Council Directive 89/104/EEC to
108 The EU Competition Rules on Intellectual Property Licensing – A guide to the European Commission;
Technology transfer block exemption regulation, Slaughter and May, 3/2010, page 1.
109 Recitals (2) of Directive 2008/95/EC provides: “The trade mark laws applicable in the Member States before the entry into force of Directive 89/104/EEC contained disparities which may have impeded the free movement of goods and freedom to provide services and may have distorted competition within the common market. It was therefore necessary to approximate the laws of the Member States in order to ensure the proper functioning of the internal market”. In fact, purpose of EU when adopts this Directive as well as previous Directive 89/104/EEC is not for obligating Member States to obey fixed regulations, but merely trying to diminish the disparities existing in national law of each. By doing so, EU can ensure maintenance of
“free movement of goods and freedom to provide services” as well as “proper functioning” of EU's single market. Hence, provisions in Directive do merely orient national law of member states to be approximated.
approximate the laws of the Member States relating to trademarks110. In principle, national laws of all EU’s Member States have to be compatible to this Directive.
Besides being “in compliance” to TRIPs Agreement, this Directive also provides
“some broader protection” as well as creates grounds for trademark jurisprudence of law of EU’s Member States111. On that ground, EU Directive often does not provide in detail all issues relating to trademark but only the common principle in protecting and enforcing rights relating to trademark that national law of Member States has to follow. The Directive 2008/95/EC obviously provides on trademark license, which states mainly in Article 8 and some others provisions relating to.
This directive in fact has “constituted a first and important step coming towards the completion of the internal market in the field of intellectual property, in particular regard to trademarks, by harmonizing the laws of the member states on almost all fundamental principles of substantive trademark law”112.
(ii) The EU Regulation: As analyzed above113, there is a special type of trademark that only existed in EU ?CTM. Relating to CTM, EU has adopted the Regulation on CTM. Historically, the first regulation on CTM was adopted on 20/12/1993, which is the Council Regulation (EC) No 40/94 on the Community trademark. It was adopted after “almost 14 years since the presentation of the Commission’s proposal”114. After many times amending this Regulation115, EU adopted a new regulation on CTM that is Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trademark. This Regulation is the most basic legal framework adjusting the CTM. Hence, its provisions are very detailed and cover sufficiently on matters relating to CTM. In addition, this Regulation only covers the
110 It had the first draft published in 1980 and was adopted by the Council on 21/12/1988. (Guy Tritton, Intellectual property in Europe, 3rd Edition, fn. 20 supra, page 262).
111 LTC Harms, The enforcement of intellectual property right: A case book, fn. 76supra, page 26.
112 Erik Nooteboom, Chapter 2: Current developments in EEC trademark and patent law, in Hugh C.
Hansen, International intellectual property law and policy – volume 1, Juris Publishing Inc., Sweet &
Maxwell, 1996, page 12.
113 See section 1.1.2.2 supra.
114 Erik Nooteboom, Chapter 2: Current developments in EEC trademark and patent law, in Hugh C.
Hansen, International intellectual property law and policy – volume 1, fn. 112supra, page 11.
115 The Regulation 40/94 on Community trademark was amended by Council Regulation 3288/94; Council Regulation 807/2003; Council Regulation 1653/2003; Council Regulation 1992/2003; Council Regulation 422/2004; Council Regulation 1891/2006. (Tobias Cohen Jehoram, Constant van Nispen, Tony Huy decoper, European Trademark Law: Community trademark law and Harmonized national trademark law, fn. 47 supra, page 467).
CTM; national law of Member States would still cover trademark under national level of protection116. The Regulation 207/2009has provision on CTM license, which states mainly in Article 22 and some others provisions relating to.
(iii)The OHIM Guidelines Concerning Proceedings Before the Office for Harmonization In the Internal Market (Trade Marks and Designs) also provides on Community trademark licensing agreement117. The main purpose of the Guidelines is for demonstrating practice of the Office of Harmonization for the Internal Market (hereinafter referred to as OHIM) following Regulation 207/2009 on Community trademark. Hence, it has been adopted under view of practical use of Office as well as professionals. In fact, those guidelines are not legislative texts118. Besides, parties of license as well as the Office need to refer to other legislative texts such as Directive 2008/95/EC, Regulation 207/2009, etc. as well; as the Guidelines merely concerns on proceedings before the Office but not other contents119. The final version of OHIM Guidelines is the version published on 25/11/2004. In present, it still remains in validity; however, some legislative texts on trademark in EU changed. Hence, any specific matter under guideline basing on legislative texts that had been replaced shall be interpreted in conformity with new regulations. It also is
116 Recital 4 of Regulation provides that “The barrier of territoriality of the rights conferred on proprietors of trademarks by the laws of the Member States cannot be removed by approximation of laws”. Basing on ground of abolishing difference in each Member States national provisions, EC introduces a common regulation and creates the common Community trademark. However, those regulations would never remove the “barrier of territoriality of the rights conferred on proprietors of trademarks by the laws of the Member States”. Hence, the purpose of EC in creating Community trademark is for creating a common level of protecting trademark but not for removing barrier of territoriality of rights conferred to the proprietor of trademark by national law. Recital 6 also reaffirms that “The Community law relating to trade marks nevertheless does not replace the laws of the Member States on trade marks. It would not in fact appear to be justified to require undertakings to apply for registration of their trademarks as Community trademarks.
National trademarks continue to be necessary for those undertakings which do not want protection of their trade marks at Community level”. Besides, it also affirms that EU does not impose on any entity to register their trademarks as Community trademark. It clarifies that, by Regulation, EU allows undertakings to have choices for their trademarks: (i) put their trademarks under a national protection; or, (ii) put their trademarks under a protection of Community level or any other level of protection. Thus, for trademarks that are not registered at Community level, national laws remain their roles on those trademarks.
117 Particularly, trademark license is provided in Part E.
118 Those guidelines are not legislative texts but legal text in general. Legislative text is the special legal text adopted by legislative body. For instance, Directive 2008/95/EC is legislative text. Those guidelines are not legislative texts, however, those are still legal text, which have the legal effect. Hence, though those are merely guidelines, those still have meaning of mandatory that parties and the Office have to follow in practice. (http://oami.europa.eu/ows/rw/pages/CTM/legalReferences/guidelines/guidelines.en.do, last visit on 11/7/2013).
119Ibid.
reason for the OHIM to provide the Manual to update matter in detailed, which was covered by guidelines but is no longer suitable to practice.
(iv) The OHIM Manual concerning proceedings before the office for Harmonization in the Internal market (Trademarks and Designs). This Manual amalgamates parts of the Guidelines that are unchanged since the last formal revision, with many amendments indicating practice Office’s currently. On the ground of practical viewpoint, the Manual should be “the first point of reference” for any entity using CTM and professional advisors as long as they desire to apply the latest information120. In fact, the Manual is adopted for responding to practical necessity on explaining clearly and updating general guidelines. It bases on main reason that practices day?by?day change leading to new consideration under different viewpoint, while the guidelines as providing general principle does not change constantly. The Manual is a practical explanation and update of practical issue relating to CTM (and design); hence each part of it will be updated basing on change of practical matter. Rules on CTM license state in Part E Section 3 Chapter 2 of the Manual, are updated lately in 2/11/2012. On that ground, the Manual merely explains practical manner of the Guidelines, and it is provided by OHIM, which is not a legislative body, hence it obviously is not legislative texts. It is, however, consulted and well respected by EU members.
(v) Other relating legal texts: Besides those legal texts focusing on trademark and trademark license, EU’s framework on this issue also includes other legal texts covering trademark license indirectly. For instance, trademark license forming as part of technology transfer licensing agreement is covered by the TTBER as well.
Trademark license as a vertical agreement is covered by the Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices. Besides, Art. 101 of The Treaty on the functioning of the European Union (hereinafter referred to as TFEU) also needs to be considered for judging issues relating to competition matter.
120 http://oami.europa.eu/ows/rw/pages/CTM/legalReferences/guidelines/OHIMManual.en.do, last visit on
11/7/2013.
Different from EU, legal framework of Vietnam on trademark licensing agreement is simpler. Though, it still consists of three basic branches of legal system covering on trademark license. Particularly, Vietnamese legal framework on this issue includes:
(i) Civil Code 2005 provides general principle on civil agreements and general principle for protecting IPR,
(ii) Intellectual Property Law 2005, amending in 2009 and other related legal texts provide in detail regulations on trademark and trademark license,
(iii) Competition Law 2004 and other related legal texts provides on matters relating to competition that can arises when performing trademark license; and, (iv) International treaties covering issues relating to trademark licensing agreement.
In addition, most of EU’s Member States has a long history of developing and protecting IPR rights121. Otherwise, IPL system in Vietnam is young. Law on protecting IPR has just been deployed in Vietnam since 1980’s of 20th century. It thus leads to the fact that both appropriate authorities and entities in Vietnam do not have much experience on this field. Basing on that practice, it is important to law for providing many detailed regulations on protecting and enforcing the IPR, which can explain cautious regulations in Vietnamese IPL.