Do IP licence agreements with Romanian partners need to be in writing?

For most industrial property rights in Romania, including patents, designs and trademarks, licences are typically granted in writing as a matter of both practice and legal certainty. Romanian IP legislation and civil law require written form for exclusive licences and assignments, and market practice is to document non-exclusive licences in writing as well. A detailed written contract is strongly recommended for foreign brands to define the scope of use, territory, exclusivity, quality control, royalties and termination rights.

Do IP licences or franchise agreements have to be registered in Romania?

Registration of an IP licence with the Romanian State Office for Inventions and Trademarks (OSIM) is not a condition for contractual validity between the parties, but it is important for enforceability against third parties and for standing in some infringement actions. For patents, utility models, designs and trademarks, Romanian practice requires recordal of the licence for it to be fully opposable to third parties. Franchise agreements themselves are not filed with a state authority, but franchisors can register basic information with the National Franchise Registry for evidence and marketing purposes.

What clauses are essential in a franchise agreement governed by Romanian law?

Key clauses in a Romanian law franchise agreement include a clear description of the franchise concept and IP licensed, territory and exclusivity, initial and ongoing fees, operational standards and manuals, training and support, marketing and brand use, quality control and audit rights, non-compete and confidentiality obligations, reporting and access to records, online and e-commerce rules, term and renewal conditions, and detailed provisions on termination and post-termination obligations such as de-branding, non-solicitation and return of know-how.

Is there a specific franchise law in Romania that foreign brands must follow?

Yes. Franchise relationships in Romania are regulated by Government Ordinance 52/1997 on the legal regime of franchising as approved and amended by Law 79/1998. This framework sets mandatory elements such as the need for the franchisor to have tested the business concept beforehand, to own the relevant intellectual or industrial property rights, to provide initial training and ongoing assistance, and to deliver a written disclosure document to prospective franchisees before signing. The general rules of the Romanian Civil Code and EU competition law, including the EU Vertical Block Exemption Regulation, also apply.

How are breaches of IP licence or franchise agreements enforced in Romania?

Breaches of IP licence or franchise agreements can be pursued both as contractual claims under the Romanian Civil Code and as intellectual property infringement or unfair competition claims under special statutes. Typical remedies include termination of the agreement, orders to cease infringing use of trademarks or know-how, delivery up and destruction of infringing materials, damages based on lost profits or a reasonable royalty, and in urgent cases interim measures before Romanian courts to stop ongoing misuse of the brand or system.

Licensing and Franchising IP in Romania for Brands

Foreign brands looking at Romania as a growth market often arrive with a clear commercial plan but an incomplete legal architecture. They know they will need distributors, licensees or franchisees, and they may have template contracts that work in their home jurisdiction. What is less clear is how these templates interact with the Romanian legal system, how intellectual property (IP) rights should be licensed locally, and what happens if the relationship goes wrong.Romania is an EU Member State with a legal framework that has been gradually aligned with European IP and competition law. Trademark and patent legislation has been modernised and the 2011 Civil Code provides a sophisticated set of rules on contracts, including licensing and franchising. At the same time, Romania maintains its own specific rules, including a dedicated Franchise Law (Government Ordinance 52/1997 as approved by Law 79/1998) and practice around registration of IP licences with the State Office for Inventions and Trademarks (OSIM).

This article is aimed at foreign brands planning to operate in Romania through IP licensing or franchising structures. It focuses on three practical questions:

Which contract clauses matter most under Romanian law when drafting licence or franchise agreements?
When are registrations required or at least strongly recommended for IP licences and franchises?
How are termination, breach and litigation handled in practice before Romanian courts?

While the emphasis is on trademarks and franchise networks, most points also apply to other forms of IP such as designs, patents and copyright.

Key Clauses in Licence/Franchise Agreements under Romanian Law

Legal framework for IP licensing and franchising

IP licensing in Romania is governed by a combination of special IP statutes (for example Law 84/1998 on trademarks and geographical indications and Law 8/1996 on copyright), the Romanian Civil Code for general contract rules, and EU instruments such as the Enforcement Directive (2004/48/EC) and the EU Trade Mark Regulation for EUTMs. Franchising has an additional layer of rules contained in Government Ordinance 52/1997 on the legal regime of franchising, as approved and amended by Law 79/1998, which introduce mandatory concepts such as pilot units, know-how, and pre-contract disclosure.

For foreign brands, the consequence is simple but important: most liberties offered by freedom of contract under the Civil Code are filtered through mandatory IP, franchise and competition law rules. Drafting a licence or franchise agreement for Romania is not just a translation exercise.

Scope of rights licensed and IP definitions

The starting point of any Romanian licence or franchise agreement is a precise description of the IP rights being licensed:

registered trademarks (Romanian national marks, EU trade marks and international registrations designating Romania);
trade names, logos and domain names;
copyright in manuals, marketing materials, software or architectural concepts;
designs and product shapes; and
know-how and trade secrets.

Romanian practice and doctrine emphasise the distinction between ownership of IP and the right to use it. Licences should clearly state that the foreign brand remains IP owner and that the local partner only receives contractual powers to use defined elements under specified conditions.

In franchising, the law expressly requires that the franchisor hold the relevant intellectual and industrial property rights over the products, services or technologies forming the franchise concept and that these rights can be effectively licensed to franchisees.

Territory, exclusivity and channels

Territorial and exclusivity clauses have to be drafted with both Romanian law and EU competition law in mind. The EU Vertical Block Exemption Regulation (VBER) and its Guidelines govern vertical agreements such as distribution and franchising and set boundaries for territorial restrictions and non-compete clauses.

In practice:

exclusive territories (for example Romania as exclusive territory for a master franchisee or licensee) are generally permissible where market shares are below the VBER thresholds and hardcore restrictions are avoided;
restrictions on active sales into another distributor’s exclusive territory may be acceptable; blanket bans on passive sales (responding to unsolicited orders, online sales from a website) are usually problematic;
clauses that partition the EU internal market or prohibit cross-border online sales are particularly sensitive and must be reviewed in light of the new VBER rules.

In a Romanian contract, the territory clause should define not only the geographical area but also the channels covered (brick-and-mortar stores, e-commerce, marketplaces, social media, B2B vs B2C) and how online sales into or from Romania are treated.

Royalties, fees and reporting

Romanian law does not impose a mandatory royalty structure, but it does expect clear financial clauses. For licensing and franchising, typical elements include:

an initial entry fee (in franchising often tied to access to the system and training);
ongoing royalties calculated as a percentage of gross turnover or net sales in Romania;
advertising or marketing contributions to central campaigns; and
technology or system support fees.

The Franchise Law and Romanian practice underline the importance of transparency: pre-contract disclosure has to include information allowing the candidate franchisee to assess future revenue and cost structure, while the contract must describe financial conditions, including how royalties are calculated, paid and audited.

On the operational side, it is standard to include robust reporting and audit clauses, giving the licensor or franchisor access to sales data, accounting records and other metrics, subject to Romanian data protection and confidentiality rules.

Quality control, brand standards and know-how

From a trademark law perspective, the effectiveness of IP licensing in Romania depends heavily on quality control. Uncontrolled licensing may put the distinctiveness or reputation of a mark at risk. As a result, licensing and franchise agreements typically include:

brand manuals and operational standards defining how marks, logos and trade dress are used;
product and service quality specifications;
approval mechanisms for new locations, marketing campaigns and local suppliers; and
inspection and audit rights for the licensor or franchisor.

The Franchise Law explicitly refers to the role of know-how and requires the franchisor to transmit and monitor it, ensuring consistent identity and reputation of the franchise network. The law also endorses confidentiality and non-compete clauses to prevent disclosure or misuse of know-how by franchisees.

Non-compete and confidentiality

Non-compete clauses are common in Romanian licences and especially in franchises. Under the Franchise Law, the franchisor may expressly impose non-compete obligations to protect transferred know-how and the integrity of the network.

At the same time, non-competes must respect EU VBER limits. As a rule of thumb:

during the term, a non-compete limited to the franchise premises or territory and linked to the franchise brand and know-how is usually acceptable if it does not exceed five years, unless the franchised premises are owned or leased by the franchisor;
post-term non-competes must be tightly drafted: they should relate to competing goods or services, be limited to the former franchisee’s operation area and be necessary to protect know-how;
absent careful drafting, overbroad non-compete clauses can be unenforceable or even raise antitrust concerns.

Confidentiality clauses are equally central. Romanian law and the Franchise Law require the franchisee to maintain absolute confidentiality over know-how both during and after the relationship, and similar duties are implied in most IP licence structures.

Online use, social media and domains

Licensing in Romania cannot ignore the digital layer:

use of trademarks in .ro domains and social media handles;
SEO and online advertising using the brand name;
sale of products via marketplaces and cross-border platforms.

Contracts should clarify who owns domain registrations and social media pages, who can register new ones, and what happens on termination. Given the specific Romanian context around .ro domains and the possibility of disputes over domain names, many foreign brands centralise domain ownership and only allow local partners to administer content.

Dispute resolution and governing law

Foreign brands often prefer the agreements to be governed by Romanian law when dealing with local licensees or franchisees, especially when enforcement will take place before Romanian courts. Alternatively, some choose their home law combined with arbitration seated abroad. Under the Rome I Regulation, choice of law is generally respected in civil and commercial contracts, but mandatory Romanian and EU rules on IP ownership, franchise disclosures and competition law will still apply in many cases.

Dispute resolution clauses should consider:

exclusive jurisdiction of Romanian courts for certain IP rights, such as validity of national trademarks and designs registered with OSIM;
the availability of specialised panels within the Bucharest Tribunal and higher courts for IP disputes;
the possibility of arbitration, especially for contractual aspects, with or without parallel court actions for infringement.

Registration Requirements (if any)

IP licences: between contractual freedom and opposability

The central question many foreign brands ask is whether they need to register IP licences in Romania. The answer is nuanced.

According to Romanian IP practice, licences for patents, utility models, plant varieties, designs and trademarks are generally valid between the parties without registration, provided the basic contract law requirements are met. However, recordal with OSIM is required for the licence to be fully enforceable against third parties and can influence standing in infringement actions.

In practice, this means:

if a foreign brand simply wants to authorise a Romanian affiliate to use its mark, registration is not strictly mandatory but still advisable; and
if a foreign brand wants a Romanian licensee or franchisee to be able to take action in its own name against infringers, the licence should be in writing and recorded with OSIM.

For copyright and trade secrets, Romanian law does not impose statutory recordal of licences, although registration with the Romanian Copyright Office (ORDA) can play a role for collective management and certain enforcement scenarios.

Franchise registration and the National Franchise Registry

Romania does not require the franchise agreement itself to be registered with a state authority for validity. Instead, the Franchise Law focuses on substantive requirements (pilot unit, know-how, IP rights, disclosure document) and leaves detailed contract drafting to the parties.

However, there is an online Franchise Registry (Registrul Național de Franciză) administered by the Romanian Franchise Association. Registration is free, made online and based on information from the disclosure document. It serves as a means of evidence and statistics rather than a validity requirement. Foreign franchisors registering in the system are expected to mention their first franchise unit in Romania and year of incorporation, alongside other descriptive data.

From a practical perspective, presence in the Franchise Registry can be useful for:

signalling that the franchise concept is legitimate and structured under Romanian law;
supporting marketing and recruitment of franchisees; and
providing additional evidence about the network in case of disputes.

EU dimension: EUTM and Community designs

Where foreign brands rely on EU trade marks or registered Community designs, licence recordal is made with the EUIPO, not with OSIM. Romanian courts will recognise licences recorded with EUIPO and apply EU rules on standing and enforcement.

In cross-border franchise networks, it is common to:

record headline licences or master franchise agreements at EUIPO level for EUTMs and Community designs; and
record subordinate local sub-licences at OSIM for national rights, where these play a significant role.

Tax and regulatory registrations

Although outside strict IP law, foreign brands should also consider tax and regulatory registrations triggered by licensing or franchising activity, such as:

Romanian permanent establishment or VAT registration where a foreign brand has extensive operations through a local franchise network;
withholding tax and double tax treaty aspects for royalty flows from Romania, which may be reduced under EU directives or bilateral treaties;
sector-specific licences or permits (for example in food services, retail or education) which remain the responsibility of the local franchisee but are often coordinated contractually.

These issues require careful coordination between the legal and tax teams. Public guidance from trade and investment agencies emphasises that IP protection and licensing should be integrated into broader market entry planning.

Termination, Breach and Litigation

Termination mechanics under the Civil Code and Franchise Law

Romanian contract law distinguishes between ordinary termination (for example on notice at the end of a fixed term or during a renewal period if the contract allows it) and termination for cause (resolution for serious breach). Licence and franchise agreements usually combine both mechanisms, tailored to the commercial model.

The Franchise Law requires that franchise contracts clearly describe their duration, renewal, termination and transfer conditions. Pre-contract disclosures should also inform prospective franchisees about these aspects before they commit.

Typical contractual termination grounds in Romanian IP licence and franchise agreements include:

non-payment or late payment of royalties and fees;
serious or repeated breaches of brand standards and quality specifications;
unauthorised use, registration or disclosure of IP or know-how;
breach of non-compete or confidentiality obligations;
change of control or unauthorised transfer of the licensed business; and
insolvency or loss of key licences or permits.

Romanian civil law generally expects the non-breaching party to give notice and a cure period for remediable breaches, unless the contract or the nature of the breach justify immediate termination. Carefully drafted notice and cure provisions are therefore particularly important in master franchise and long-term licensing structures.

Post-termination obligations and de-branding

Once a licence or franchise ends, the foreign brand must ensure a clean de-branding and protection of confidential information. Standard clauses in Romania will require the former licensee or franchisee to:

cease all use of licensed trademarks, trade names and domain names and transfer or cancel relevant registrations;
stop using the system, manuals and software and return or destroy copies;
remove signage and branding, including from premises, vehicles and online channels;
handover customer data in compliance with data protection law, where this is contractually agreed; and
respect ongoing confidentiality and, where applicable, post-term non-compete obligations.

The Franchise Law underlines that the franchise network must protect the identity and reputation of the brand. Courts and commentators consider that this extends to post-term conduct, so clauses addressing behaviour immediately after termination are significant for enforceability.

Infringement, unfair competition and contractual claims

When a Romanian licensee or franchisee misuses IP or refuses to respect post-termination obligations, the foreign brand typically combines:

contractual claims under the Civil Code for breach of the licence or franchise agreement;
IP infringement actions under trademark law, design law or copyright law;
unfair competition claims where conduct misleads consumers, parasitically exploits the brand or creates confusion in the market.

This multi-track approach allows the rights holder to seek both contractual and statutory remedies, including:

injunctions to stop use of signs or systems;
damages based on lost profits, unjust enrichment or reasonable royalties;
destruction or withdrawal of infringing goods, promotional materials or signage;
publication of judgments; and
interim measures to secure evidence and stop ongoing infringements.

Standing to sue: role of exclusive licensees

A recurring question is whether Romanian licensees or franchisees can themselves sue infringers. In general, exclusive licensees have broader enforcement rights than non-exclusive licensees, particularly where the licence is in writing, registered and the owner has been notified and declined to act. Non-exclusive licensees typically need the rights holder’s consent to initiate litigation.

Foreign brands should therefore decide, at the drafting stage, whether they want their Romanian partners to be able to act in their own name and, if so, ensure that both the contract and IP registers reflect this structure.

Litigation fora and timelines

Romanian IP disputes follow the general judicial hierarchy: cases typically start before a tribunal (for major IP matters often the Bucharest Tribunal), with appeals to the Court of Appeal and, in some cases, recourse to the High Court of Cassation and Justice. The Bucharest Tribunal has specialised sections that handle IP matters and has developed significant experience with trademark, patent and copyright cases.

Timelines depend on complexity and workload, but IP litigators commonly estimate one to three years for full proceedings including appeals. This makes the availability of interim measures particularly important when ongoing misuse of a brand or system is causing immediate harm.

Interim measures and evidence preservation

Romanian law, implementing the EU Enforcement Directive, allows rights holders to seek provisional and precautionary measures such as:

orders to stop or limit use of trademarks and other signs;
seizure or detailed description of infringing goods, materials and documents;
freezing and preservation of evidence held by counterparties or third parties; and
temporary prohibitions on operating under a confusingly similar business name or signage.

To obtain such measures, the claimant must typically show prima facie evidence of the right and the infringement, and the risk of irreparable harm or difficulty in recovering damages later. Because many breaches of licence and franchise agreements are visible online (websites, social media, advertising), quick evidence gathering through dated screenshots, bailiff reports and technical data is critical before filing.

Alternative dispute resolution and negotiation

Although litigation remains central, many foreign brands prefer to handle disputes through negotiation or mediation when possible, especially where the Romanian partner’s business is valuable or when reputational risks are high. Arbitration is also used, particularly in larger international franchise or master licence agreements where parties want a neutral forum and confidential proceedings.

In this context, well-drafted escalation clauses (negotiation, mediation, then arbitration or litigation) and detailed termination assistance provisions (phased withdrawal, inventory run-off, transition to a new partner) can greatly reduce friction.

Conclusions: designing robust IP licence and franchise structures in Romania

Romania offers foreign brands a combination of market potential and legal predictability: the IP framework has been harmonised with EU standards, and franchising is supported by a specific, relatively concise Franchise Law. Yet this does not mean that global templates can simply be re-used without adjustment.

Effective licensing and franchising in Romania require contracts that:

accurately reflect the portfolio of IP rights available in Romania (national marks, EU trade marks, designs, copyrights, know-how);
respect mandatory Franchise Law requirements on pilot units, disclosure, training, assistance and network identity;
take into account EU competition law, especially on territorial restrictions, online sales and non-compete clauses;
address registration strategy for licences with OSIM and EUIPO to secure opposability and enforcement options; and
anticipate termination, breach and litigation scenarios, including interim measures and choice of forum.

Foreign brands that invest in this legal architecture early tend to enjoy smoother relationships with Romanian partners, faster reactions to infringements and better long-term control over their brand and systems. In a jurisdiction where IP awareness and judicial expertise continue to grow, a carefully drafted licensing or franchise framework is no longer just a defensive tool. It is a strategic asset for building and protecting a sustainable presence on the Romanian market.