A licensee fell behind on royalties and then argued that “the person who signed the reconciliation record had no authority”. A film studio held back the assignment price because a script was delivered late. Two judgments show how the courts look at each IP contract on its own, and which clauses help a business collect what it is owed.
1. The case in 60 seconds
The licensee of the ANA MANDARA brand owed more than VND 1.7 billion in royalties. A film studio did not pay for the assignment of an original work because the adapted script was delivered late.
Can a party avoid paying by arguing that the signatory had no authority, or by mixing up the obligations under two different contracts?
Keep each contract separate, set clear rules for calculating and auditing fees, and make sure the person signing debt reconciliation records has proper authority.
2. What happened?
- The licence contract is signed. Khánh H Company granted Thuận A Company in Huế the right to use the brand “ANA MANDARA Resort”, for a fee of 1% of room revenue each month.
- Royalty debts build up. After several years, the licensee owed more than VND 1.7 billion and argued that its General Director had no authority to sign the reconciliation record.
- Two contracts are signed side by side. An author signed two contracts with Film Studio V: one assigning the copyright in the original work, and one for writing the adapted script.
- The film studio holds back payment. After receiving the original work and the copyright certificate, the studio did not pay, because the script was delivered late.
- The courts rule. Judgment No. 01/2019/KDTM-ST (People’s Court of Thừa Thiên Huế) and Judgment No. 29/2018/KDTM-PT (High People’s Court in Ho Chi Minh City) ordered the debtors to pay in full.
3. Where is the legal issue?
Is each contract independent?
A contract assigning rights and a services contract are separate relationships. A breach under one does not automatically allow a party to stop paying under the other.
How are royalties calculated and closed?
A revenue-based fee needs a clear date for closing the figures, a right to audit and interest for late payment.
Did the signatory have authority?
The argument about lack of authority was rejected because the debt was consistently shown in the audited financial statements. Even so, a business should not let this kind of dispute arise.
Assignment or only a licence?
An assignment changes the owner. A licence only allows use within a set scope and term. Each party’s obligations are different.
4. From the facts to the management lesson
| Fact | Analysis | Lesson |
|---|---|---|
| The licensee owed VND 1,781,567,885 in royalties and argued that its General Director had no authority to sign the reconciliation record. | The court rejected this argument because the debt figures were shown throughout the annual audited financial statements. | Reconcile debts regularly. The record should be signed and sealed by the legal representative or a duly authorised representative. |
| The film studio did not pay for the assignment of the original work because the adapted script was delivered late. | The assignment contract had been performed on its own once the work was handed over. It could not be combined with the obligation to write the script. | Keep each contract separate. Accept and pay under each contract on its own. |
| The licence fee was 1% of room revenue each month. | A revenue-based fee depends on figures supplied by the licensee. Without a way to check them, the licensor will struggle to collect. | Set the date for closing revenue figures, a right to an independent audit and interest for late payment. |
Fact: facts stated in the judgment · Analysis: FC Legal’s view · Lesson: what businesses should do.
5. What did the court decide?
- Judgment No. 01/2019/KDTM-ST (People’s Court of Thừa Thiên Huế Province): the licensee was ordered to pay the full principal royalty debt of VND 1,781,567,885 plus interest for late payment. The argument that the signatory lacked authority was rejected.
- Judgment No. 29/2018/KDTM-PT (High People’s Court in Ho Chi Minh City): Film Studio V was ordered to pay the full VND 175,500,000 for the assignment of the original work and to pay the personal income tax (PIT). The court found that the copyright assignment contract had been completed on its own.
A licence contract and a contract assigning intellectual property rights are independent legal relationships. Each is binding on its own under the Commercial Law, the Civil Code and the Law on Intellectual Property.
6. What should businesses do now?
- Keep each type of contract separate. Make clear whether the deal assigns all economic rights or only licenses use. Accept and pay under each contract on its own.
- Set strict rules for calculating and auditing royalties. State the date for closing revenue figures, the right to request an independent audit, interest for late payment and the contractual penalty.
- Make sure debt reconciliations are signed with proper authority. Regular reconciliation records should be signed by the legal representative or a person holding a valid written authorisation, and bear the company seal.
- Register the contract when the law requires it or when it helps you. Check whether an assignment of industrial property rights must be registered, and the benefits of registering a licence contract.
Royalty disputes are rarely about the price. They are about the reconciliation documents and how the contracts link to each other. A business that licenses its brand should treat each periodic debt reconciliation record as legal evidence, not just an accounting formality.
Ask a lawyer →7. Frequently asked questions
What is the difference between licensing and assigning IP rights?
An assignment changes the owner of the right. A licence only allows the other party to use it within the agreed scope, term and territory. The owner keeps the right.
Can a licensee refuse to pay because the record was signed by someone without authority?
In the Ana Mandara case, the court rejected this argument because the debt was shown in the audited financial statements. Even so, records should be signed by someone with proper authority to avoid disputes.
Can the obligations under two contracts signed at the same time be set off against each other?
Only if the parties have clearly agreed this. Otherwise, each contract is considered on its own, as in the Film Studio V case.
Draft and review IP licensing and assignment contracts with an FC Legal lawyer
For brands, copyright and technology your business licenses out or takes a licence for.
- Drafting licence and assignment contracts that match the type of deal
- Designing how royalties are calculated and audited
- Recovering unpaid royalties
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Sources
People’s Court of Thừa Thiên Huế Province: Judgment No. 01/2019/KDTM-ST, dispute over the licence contract for the ANA MANDARA trademark.
High People’s Court in Ho Chi Minh City: Judgment No. 29/2018/KDTM-PT, dispute over a copyright assignment contract.
National Assembly: Law on Intellectual Property, consolidated text including the amendments of 2009, 2019 and 2022.
This article is for reference. It analyses published judgments and does not replace legal advice on a specific case. Some parties’ names are abbreviated as in the published judgments. For detailed advice, please contact the FC Legal legal team.
Prepared by the FC Legal legal team and reviewed by FC Legal’s managing lawyer. Updated 30 September 2026.
