Resolving disputes in intellectual property agreements

When an intellectual property agreement becomes the subject of a dispute, determining ownership rights, scope of use, and the parties’ responsibilities is a main factor in resolving the matter.

I. Current situation regarding intellectual property agreement disputes

In the context of the rapid development of the digital economy and creative economy, intellectual property assets have increasingly become one of the most important resources for businesses. Activities such as technology transfer, licensing of intellectual property rights, franchising, and cooperation in exploiting intellectual property assets are commonly conducted through agreements. However, in practice, disputes arising from intellectual property agreements have become increasingly common, resulting in significant legal and economic consequences for the parties involved.

In practice, disputes frequently arise in trademark licensing agreements, patent license agreements, technology transfer agreements, or copyright assignment agreements. Many businesses enter into intellectual property agreements without clearly defining the scope of transferred rights, duration of use, territorial limitations, or royalty payment obligations. Once the exploitation of intellectual property assets generates substantial profits or creates new economic interests, conflicts among the parties often emerge and develop into disputes.

Overall, disputes in intellectual property agreements are increasing alongside the development of the intellectual property market. It requires businesses to strengthen legal awareness when entering into and performing agreements and to establish effective dispute-prevention mechanisms to protect their legitimate rights and interests.

II. Concept of intellectual property agreement disputes

1. What is an intellectual property agreement dispute?

Intellectual property rights refer to the rights of organizations and individuals over intellectual assets, including copyright and related rights, industrial property rights, and rights to plant varieties (Clause 1, Article 4 of the Law on Intellectual Property 2005).

An intellectual property agreement refers to an agreement between parties regarding the transfer, assignment, licensing, or exploitation of intellectual property objects such as copyrights, related rights, patents, industrial designs, trademarks, trade secrets, or plant varieties.

During agreement performance, an intellectual property agreement dispute refers to circumstances where parties develop disagreements, conflicts, or disputes concerning rights, obligations, or interests related to the executed agreement. These disputes may involve agreement performance, interpretation, or termination and are commonly resolved through negotiation, mediation, arbitration, or litigation.

2. Types of intellectual property agreement disputes

In practice, disputes involving intellectual property agreements may arise in various forms depending on the agreement content and the intellectual property rights involved. Common categories include:

• Disputes over ownership of intellectual property assets: These arise when parties disagree on who is the lawful owner of the intellectual property object.
• Disputes over scope and duration of intellectual property use: In agreements licensing trademarks, patents, or software, parties commonly agree on territorial scope, duration, and purpose of use. If the licensee exceeds the permitted scope or continues using the rights after agreement expiration, disputes may arise.
• Disputes over financial obligations: Certain agreements require the licensee to pay royalties or transfer fees periodically. Disputes may occur if payment obligations are not fulfilled properly.
• Disputes concerning agreement termination: Parties may disagree on conditions for early termination, legal consequences of termination, or handling intellectual property rights after agreement expiration.

3. Common causes of intellectual property agreement disputes

Several factors commonly contribute to disputes in intellectual property agreements:

• First, poorly drafted agreements: Many agreements fail to clearly define transferred rights, usage conditions, or mechanisms for controlling exploitation of intellectual property assets, leading to differing interpretations.
• Second, breach of agreement obligations: One party may fail to pay royalties, use intellectual property beyond the permitted scope, or unlawfully disclose trade secrets.
• Third, changes in economic interests during exploitation: When intellectual property becomes more valuable than originally anticipated, disputes over benefits or agreement conditions may arise.
• Fourth, inadequate understanding of intellectual property law: Some businesses and individuals lack sufficient understanding of regulations governing intellectual property transfers, resulting in improper agreement formation and performance.
• Fifth, international elements in agreements: For agreements involving foreign parties, differences in legal systems, language, and commercial practices may increase dispute risks.

III. Legal regulations related to intellectual property agreement disputes

1. Validity conditions of intellectual property agreements under the law

Specifically, under Article 117 of the Civil Code 2015, a civil transaction is valid when:

• The parties possess legal capacity and legal competence appropriate to the transaction;
• Participation is entirely voluntary;
• The purpose and content do not violate legal prohibitions or social ethics;
• The transaction complies with legally required formalities.

For agreements involving intellectual property rights, additional requirements apply.

Under Clause 2, Article 138 and Clause 2, Article 141 of the Law on Intellectual Property 2005, agreements assigning industrial property rights and agreements licensing industrial property objects must be made in writing.

Additionally, in certain cases, industrial property transfer agreements must be registered with the competent authority to become enforceable against third parties. Under Article 148 of the Law on Intellectual Property 2005, for industrial property rights established through registration under Point a, Clause 3, Article 6 of the Law, assignment agreements only become effective upon registration with the state authority responsible for industrial property rights.

2. Mandatory agreement contents to reduce disputes

Under Article 140 of the Law on Intellectual Property 2005, industrial property assignment agreements must contain:

• Full names and addresses of assignor and assignee;
• Legal basis for assignment;
• Assignment price;
• Rights and obligations of both parties.

Under Clause 1 Article 144 of the Law on Intellectual Property 2005, industrial property licensing agreements must include:

• Full names and addresses of licensor and licensee;
• Legal basis for licensing;
• Type of agreement;
• Scope of transfer, including usage and territorial limitations;
• agreement duration;
• Licensing fee;
• Rights and obligations of the parties.

In practice, agreements often include additional provisions such as:

• Confidentiality clauses;
• Breach handling clauses;
• Sublicensing provisions;
• Dispute resolution clauses.

Comprehensive drafting of these provisions helps parties clearly understand their rights and obligations and substantially reduces dispute risks.

3. Methods of resolving intellectual property agreement disputes

Under Article 317 of the Commercial Law 2005, dispute resolution methods include:

• Negotiation;
• Mediation;
• Commercial arbitration;
• Court proceedings.

Additionally, under Article 198 of the Law on Intellectual Property 2005, intellectual property right holders may request competent State authorities to apply civil remedies to protect their lawful rights and interests.

Selecting the appropriate dispute resolution mechanism can significantly improve the effectiveness of protecting legal interests.

4. Rules on burden of proving damages in intellectual property agreement disputes

In intellectual property agreement disputes, proving damages is an essential factor for courts or arbitral tribunals when determining compensation liability.

Under Clause 1, Article 203 of the Law on Intellectual Property 2005, plaintiffs and defendants in intellectual property infringement cases take evidentiary rights and obligations in accordance with the Civil Procedure Code 2015 and applicable intellectual property provisions.

Article 91 of the Civil Procedure Code 2015 provides that parties requesting judicial protection of their lawful rights and interests bear the burden of proving that their claims are legitimate and well-founded.

For intellectual property matters, Article 205 of the Law on Intellectual Property 2005 (as amended) sets out the basis for calculating damages resulting from infringement, including:

• Material damage, including property loss and reduced or lost profits;
• Moral damages suffered by the author or rights holder;
• Profits obtained by the infringing party through infringement.

IV. Questions regarding disputed intellectual property agreements

1. Can the parties simultaneously choose both commercial arbitration and the court to resolve disputes under an intellectual property agreement?

Under Vietnamese law, the parties cannot simultaneously choose both commercial arbitration and the court to resolve the same dispute.

Specifically, pursuant to Article 5 of the Law on Commercial Arbitration 2010, a dispute may only be resolved by arbitration if there is a valid arbitration agreement between the parties. Once a valid arbitration agreement exists, the court must refuse to accept jurisdiction over the case, except where the arbitration agreement is invalid or incapable of being performed.

It means that once the parties choose commercial arbitration in the agreement, the dispute must be resolved through arbitration and cannot simultaneously be brought before the court for resolution of the same matter.

Conversely, if the agreement does not contain an arbitration clause, the dispute shall be resolved through court proceedings before the competent court in accordance with the Civil Procedure Code 2015.

Therefore, when drafting an intellectual property agreement, the parties should carefully consider the selection of the dispute resolution forum in order to avoid legal complications if disputes arise.

2. How should disputes be resolved if the intellectual property agreement does not contain a dispute resolution clause?

Where an intellectual property agreement does not include a dispute resolution clause, the parties may still resolve disputes through mechanisms permitted by law.

• First, the parties may negotiate or conduct mediation to seek an appropriate solution, minimize costs, and preserve business relationships.
• If negotiation fails, either party has the right to initiate proceedings before the competent court to request dispute resolution in accordance with applicable laws.

Pursuant to Article 26 and Article 35 of the Civil Procedure Code 2015, disputes concerning civil or commercial agreements, including disputes related to intellectual property rights, fall under the jurisdiction of the People’s Courts.

Accordingly, the absence of a dispute resolution clause does not deprive the parties of their right to bring legal action; however, it may make the dispute resolution process more complex because the mechanism for dispute resolution was not predetermined.

3. Are the parties required to conduct mediation before initiating litigation over an intellectual property agreement dispute?

Vietnamese law does not require parties to conduct mediation before filing a lawsuit regarding an intellectual property agreement dispute, except in certain special cases prescribed by law. However, in practice, mediation remains an effective dispute resolution method because it helps parties save time and costs while minimizing disruption to business activities.

Additionally, during court proceedings, the court still bears responsibility for conducting mediation to allow the parties to reach an agreement in accordance with Article 205 of the Civil Procedure Code 2015.

If mediation before the court is successful, the court will issue a mediation record and render a decision recognizing the parties’ agreement. Such decision carries legal effect and is enforceable in the same manner as a court judgment.

Accordingly, although mediation is not mandatory before litigation, negotiation or mediation remains a practical step to reduce legal risks when intellectual property agreements become disputed.

4. What are the legal consequences if one party unilaterally terminates an intellectual property agreement while a dispute is pending?

In certain situations, once a dispute arises, one party may choose to unilaterally terminate the agreement to protect its interests. However, unilateral termination must satisfy statutory conditions.

Under Article 428 of the Civil Code 2015, a party may unilaterally terminate performance of an agreement if the other party seriously breaches agreement obligations or in other circumstances agreed by the parties.

If unilateral termination is legally justified, the agreement terminates from the time the other party receives notice of termination, and the parties must return to each other what has been received (if applicable).

Conversely, if unilateral termination lacks legal grounds, such conduct may constitute breach of agreement, and the terminating party may be liable for damages.

5. Does a dispute in an intellectual property agreement affect the validity of the transfer of rights?

The existence of a dispute in an intellectual property agreement does not automatically render the agreement invalid.

Under general principles of civil law, an agreement remains legally effective if it satisfies all validity conditions under Article 117 of the Civil Code 2015, unless it is declared invalid by a court or another competent authority.

For agreements involving assignment or transfer of industrial property rights, agreement validity may additionally depend on registration with the competent state authority in accordance with the Law on Intellectual Property.

Where a dispute arises, the dispute resolution authority will assess the legality of the agreement, the content agreed by the parties, and any alleged breach before issuing an appropriate decision.

V. Why businesses should seek legal advice from NPLaw for intellectual property agreement disputes

When disputes arise under intellectual property agreements, obtaining support from lawyers experienced in intellectual property law is an important factor in protecting the parties’ lawful rights and interests.

NPLaw is a legal advisory firm with extensive experience in intellectual property and commercial dispute resolution, providing comprehensive legal services to individuals and businesses.

• First, NPLaw’s legal team possesses in-depth expertise in intellectual property law, enabling clients to accurately assess agreement legality and identify legal risks arising from disputes.
• Second, NPLaw assists with drafting, reviewing, and amending intellectual property agreements to ensure compliance with legal requirements and minimize dispute risks during implementation.
• Third, when disputes arise, NPLaw may represent clients in negotiations, mediation, arbitration proceedings, or court litigation to protect clients’ interests effectively.

In addition, NPLaw provides dispute management strategies, supports evidence collection, and evaluates damages to facilitate efficient and legally compliant dispute resolution.

With practical experience and extensive understanding of intellectual property law, NPLaw serves as a reliable legal partner for individuals and businesses facing issues relating to disputed intellectual property agreements.

The above information is provided for reference purposes only. For detailed advice regarding a specific case, please contact NPLaw for legal consultation.