Licensing a patent is possible in Vietnam, meaning that the patent owner grants permission to another individual/organization to make, use, sell etc. his/her patented invention. This takes place according to agreed terms and conditions for an agreed period of time in return for “royalty” payments.

A patent owner may grant a license to a third party for different reasons. The patent owner may not have the necessary manufacturing facilities, for example, and therefore opts to allow others to make and sell his/her patented invention in return for “royalty” payments. Alternatively, a patent owner may have manufacturing facilities, but they may not be large enough to cover market demand. In this case, he/she may be interested in licensing the patent to another manufacturer in order to benefit from another income stream.

Another possible situation is one in which the patent owner wishes to concentrate on one geographic market; therefore the patent owner may choose to grant a license to another individual/organization, with interests in other geographical markets. Entering into a licensing agreement can help to build a mutually-beneficial business relationship.

Unlike selling or transferring a patent to another party, the licensor continue to have property rights over the patented invention.