Understanding Tech Transfer in Vietnamese Law

1. What is Technology Transfer?

The Law on Technology Transfer (LTT) of 2017 plays a pivotal role in fostering innovation and economic growth in Vietnam. However, a key question arises: Can technology truly be considered property under Vietnamese law?

The LTT implies ownership of technology, but the Civil Code offers a different perspective.

The LTT operates under the assumption that technology can be transferred as a form of property. This is evident in provisions that allow for the transfer of ownership or use rights of a technology. Article 7 further reinforces this notion by mentioning the assignment of ownership and licensing of use rights.

However, the Civil Code of 2015 defines ownership as applying only to tangible objects, money, valuable papers, and property rights. The definition of technology in the LTT itself (solutions, processes, and know-how) leans towards something intangible. This creates a potential conflict: can something intangible be considered property?

Technology as a Property Right, Not the Property Itself

While technology itself might not be classified as property under the Civil Code, a strong case can be made for technology transfer as a transfer of rights. Article 115 of the Civil Code recognizes property rights as rights that can be valued in money, including those associated with intellectual property (IP) like patents and copyrights.

Solution, process, and know-how can be the subjects of IP rights. Therefore, a right to technology can be an IP right, effectively making it a property right. The LTT likely intended to address the transfer of these associated rights rather than the technology itself.

A Grey Area: Rights Beyond Intellectual Property

The question remains: can technology ownership extend beyond established IP rights? The LTT doesn't explicitly address the existence of other, non-IP related, valuable rights associated with technology. This creates a grey area in the legal landscape.

In Summary

Understanding the interplay between the LTT and the Civil Code is crucial for navigating technology transfer in Vietnam. While the technology itself might not be considered property under the Civil Code, the transfer likely refers to the transfer of associated rights, most commonly intellectual property rights. If you're considering technology transfer in Vietnam, consulting with a lawyer specializing in intellectual property law is highly recommended. They can help navigate the legalities and ensure your transfer adheres to all relevant regulations.

2. Types of Technology Transfer

The Law on Technology Transfer (LTT) recognizes that technology transfer can occur through various pathways, catering to diverse needs and scenarios. Here's a breakdown of the two main categories outlined in the LTT:

1. Independent Technology Transfer Contract:

This is the most common and straightforward form of technology transfer. It involves a standalone agreement between two parties:

• The Transferor: The party possessing the technology and granting rights to use or ownership of it.
• The Transferee: The party receiving the technology and the associated rights.

The transferor and transferee negotiate and formalize the terms of the transfer through a written contract. This contract lays out crucial details like:

• The scope of the technology being transferred
• Payment and royalty structures
• Confidentiality obligations
• Dispute resolution mechanisms

An independent technology transfer contract offers flexibility and allows for tailoring the agreement to the specific needs of the involved parties.

2. Technology Transfer as Part of Other Agreements:

Technology transfer can also be embedded within the framework of other existing agreements. This can be particularly advantageous when technology forms a crucial component of a larger undertaking. Here are some common examples:

• Investment Projects: Foreign or domestic investors might contribute technology as part of their investment in a Vietnamese project.
• Capital Contribution Through Technology: A company might contribute its technology as capital to a joint venture instead of cash.
• Franchise Agreements: Franchising agreements often involve the transfer of technology, know-how, and operational processes to the franchisee.
• Transfer of Intellectual Property Rights (IPRs): This involves the transfer of ownership or licensing rights for patents, copyrights, trademarks, or other forms of IP associated with the technology.
• Purchase or Sale of Machinery and Equipment: In some cases, the technology might be embedded within the machinery or equipment being sold. The sale agreement would then encompass the transfer of the technology as well.

Choosing the Right Path

The type of technology transfer you choose depends on the specific circumstances of your transaction. Independent technology transfer contracts provide flexibility for straightforward technology transfers. Technology transfer as part of other agreements is suitable when the technology is an integral part of a larger project or business arrangement.

Regardless of the chosen path, carefully review and understand the terms of any agreement before entering into a technology transfer process. Consulting with a lawyer specializing in intellectual property law can be invaluable in ensuring a smooth and successful transfer.

3. Methods of Technology Transfer

The Law on Technology Transfer (LTT) recognizes that effectively transferring technology goes beyond simply signing a contract. The LTT outlines various methods for sharing the knowledge and expertise that embodies the essence of technology transfer. Here's a look at some of the most common methods:

1. Transfer of Technology Documentation:

This method involves handing over technical documents, blueprints, manuals, and other materials that detail the transferred technology. This can include:

• Schematics and diagrams: These provide a visual representation of the technology's components and how they interact.
• Operation and maintenance manuals: These detailed instructions ensure the transferee can properly operate and maintain the technology.
• Technical specifications: These documents outline the technical details and requirements for implementing the technology.

Providing comprehensive documentation is crucial for ensuring a successful transfer. It empowers the transferee to understand and utilize the technology effectively.

2. Training the Transferee:

Technology transfer often goes beyond mere documentation. Hands-on training plays a vital role in ensuring the transferee can master the transferred technology. This training can involve:

• Classroom sessions: These sessions provide theoretical knowledge and a foundational understanding of the technology.
• On-the-job training: This practical training allows the transferee to apply the learned knowledge in a real-world setting under the guidance of experienced personnel.
• Technical workshops: These intensive workshops can focus on specific aspects of the technology, providing in-depth understanding and troubleshooting skills.

Effective training fosters knowledge transfer and empowers the transferee to independently operate and maintain the technology.

3. Sending Technical Experts:

In some cases, deploying technical experts from the transferor's side can be invaluable. These experts can provide:

• On-site guidance and support: Experts can assist the transferee with implementing and troubleshooting the technology during the initial stages of operation.
• Problem-solving assistance: They can address any technical challenges that may arise as the transferee gains experience with the technology.
• Quality control oversight: Experts can help ensure the transferee adheres to agreed-upon quality standards for products or services created using the transferred technology.

The presence of technical experts can accelerate the learning curve for the transferee and ensure a smooth transition to independent operation.

4. Transfer of Machinery and Equipment:

Technology is often embedded within machinery or equipment. In such cases, the sale or purchase of this machinery can also constitute a form of technology transfer. The agreement should clearly specify:

• The extent to which the technology is embodied within the equipment.
• Whether any additional technical documentation or training is included.
• The responsibilities of each party regarding maintenance and troubleshooting.

By carefully outlining these aspects, the transfer of machinery and equipment can be an effective method for sharing the knowledge and expertise associated with the technology.

Beyond the Basics

The LTT also allows for other methods of technology transfer as agreed upon by the parties. This flexibility allows for tailoring the transfer process to meet the specific needs of the transaction.

Choosing the Right Method

The most suitable method, or a combination of methods, will depend on the complexity of the technology, the existing knowledge base of the transferee, and the desired level of expertise transfer. Consulting with a lawyer specializing in intellectual property law can help you navigate the legalities and choose the most effective methods for your specific technology transfer needs.

4. Approval Process

The LTT in Vietnam aims to streamline technology transfer while safeguarding national interests. While independent technology transfer contracts are generally straightforward, certain types of technology transfer require an approval process. This section will guide you through the essential aspects of navigating this process.

When is Approval Required?

The LTT doesn't mandate approval for all technology transfer transactions. Approval is typically required for transfers involving:

• Technologies on the Restricted Technology List: The Vietnamese government maintains a list of technologies deemed sensitive or crucial for national security. Transferring such technologies necessitates prior approval.
• Technologies with Potential Environmental Impact: Technologies that could pose environmental risks may require approval to ensure proper safeguards are in place.

The Approval Process:

If your technology transfer falls under one of the categories requiring approval, you'll need to submit an application to the competent authority. This authority is typically the Ministry of Science and Technology (MOST) or a relevant ministry depending on the specific technology involved.

The application should typically include the following documents:

• Proof of legal status for both parties: This demonstrates the legitimacy of the transferor and transferee.
• A detailed description of the technology being transferred: A clear understanding of the technology is crucial for the authorities to assess the transfer.
• Details of the technology transfer agreement: The agreement outlines the terms and conditions of the transfer, ensuring transparency and alignment with regulations.
• Quality standards for products created using the transferred technology (if applicable): Maintaining quality standards is essential, especially for technologies with potential safety or environmental concerns.

Timeline and Considerations

The approval process typically takes around 30 working days from the date the MOST receives a complete application. It's crucial to ensure all necessary documentation is accurate and complete to avoid delays.

Here are some additional points to consider:

• Consulting with a lawyer specializing in intellectual property law is highly recommended. They can guide you through the legalities, ensure your application adheres to all requirements, and increase your chances of a smooth approval process.
• There might be additional fees associated with the application process. Understanding these costs beforehand allows for proper budgeting.

5. The Role of Technology Transfer Agreements (TTAs)

Technology transfer in Vietnam hinges on a crucial document – the Technology Transfer Agreement (TTA). The LTT mandates that TTAs be formalized in writing, serving as a roadmap for the entire transfer process. Let's delve into the key functions and elements of a well-crafted TTA.

The Significance of TTAs

TTAs act as the binding contract between the transferor (technology owner) and the transferee (recipient). They clearly outline the rights and obligations of both parties, ensuring a smooth and transparent transfer process. A well-drafted TTA minimizes the risk of misunderstandings and disputes down the line.

Essential Elements of a TTA

The LTT outlines several key aspects that a TTA should address:

• Scope of the Technology Transfer: This clearly defines the specific technology being transferred. It can encompass technical know-how, blueprints, patents, or a combination thereof.
• Payment and Royalties: The TTA should detail compensation arrangements, including upfront fees, ongoing royalties, or a combination of both.
• Confidentiality Obligations: Protecting sensitive technology is paramount. The TTA should establish clear confidentiality clauses to restrict unauthorized disclosure of the transferred technology.
• Dispute Resolution Mechanisms: The TTA should outline a process for resolving any disagreements that may arise during the transfer process. This can include arbitration or litigation procedures.

Beyond the Basics

While these core elements form the foundation of a TTA, additional provisions can be tailored to address specific needs:

• Training and Technical Assistance: The TTA can specify the extent of training and technical support offered by the transferor to ensure successful technology adoption.
• Quality Control Measures: For technologies impacting product quality, the TTA can outline quality standards and inspection procedures.
• Warranties and Guarantees: The transferor may offer warranties regarding the transferred technology's performance or functionality.

The Importance of Legal Expertise

Considering the complexities involved, consulting with a lawyer specializing in intellectual property law is highly recommended when drafting a TTA. They can ensure the agreement adheres to all legal requirements, protects your interests, and fosters a successful technology transfer process.

6. Conclusion