IP Considerations in Technology Transfer to Vietnam and South-East Asia

On November 14^th and 15^th, 2017, European Chamber of Commerce in Vietnam held a seminar for representatives from businesses and law firms “IP considerations inTechnology Transfer to Vietnam and South-East Asia”.

The seminar provides some sound advice relating to IP Considerations & Practical Tips for Successful Technology Transfer in Vietnam. Further, audience could learn some ways to minimize risk of IP issues associated with Technology Transfer in South-East Asia.

According to Law on Technology Transfer 2017, which shall take effect as of July 01^st, 2018, Vietnam government ensures rights as well as legal interests and facilitates both organizations and individuals in carrying out technology transfer to Vietnam. However, to take advantage of such policy when contemplating transferring technology to Vietnam, you should Evaluate IP Value & Risk of IP infringements through the following tips:

·        Check availability of use or protection status of IP objects

·        Perform IP clearance search and market research

·        Check and maintain validity of IPRs

·        Use local IP agents as watchdogs of your IPRs (advice/strategy)

·        Use NDA (Non-Disclosure Agreement)

·        Check registration of IP objects with cautious consideration in the consistence of all material (contract and records by local authorities- NOIP)

·        Sign Transferring technology contract or Assignment of IPRs/ License of IPRs separately toward each IP objects

Besides, there are some contractual issues to pay attention to such as:

·        What are conditions of use?

·        Structure of fees for License,

·        How to terminate?

·        What happens with the goods/ materials/ equipment after termination?

·        How to avoid risk of technology usage after termination.

Multinational and global companies are always facing with challenges in devising creative solutions to minimize the risks to their IPRs associated with technology transfers. Careful evaluation and due diligence at the first stage of the transferring technology project help companies prevent unwilling suffer and unfair competition.

ANT Lawyers Co., Ltd is a law firm with IP agent certificate issued by National Office of Intellectual Property.  We are also member of legal committee of EuroCham which help contribute legal opinions to promote the development of investment environment in Vietnam.

Tuan Nguyen and Thao Hoang @ ANT Lawyers

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Challenges in Preparing Documents for Representative Office Application

The representative office (RO) is a popular foreign investment vehicle which investors utilize when wishing to enter the Vietnamese market without committing too much investment.  The representative office could help the foreign entity to hire local employee to carry out market research, business promotion.

A foreign company wishes to establish a representative office in Vietnam must submit an application dossier for a license to the Provincial Department of Industry and Trade (DIT).

However, there are cases which the government agencies receiving the application would be different from department of industry and trade depending on the business lines carried out by the foreign entity.

Firstly, the trade service is bound in Vietnam’s Commitment in trade service in WTO but there are no existing specialized legislative documents:

When the trade service which the foreign entity provides does not fall under areas prescribed by specialized legislative documents in Vietnam, the licensing agency shall submit a written request for directions to the relevant ministries for opinions. The foreign entity shall wait for at least 15 working days for receiving a written notice of whether the license for establishment of the representative office is granted or rejected. This process not only extends duration of establishment of representative office but also rises risk of rejection.

Secondly, the trade service is not yet bound in Vietnam’s Commitment:

Where the scope of operation of the representative office is inconsistent with Vietnam’s commitments or the foreign trader is not located in the country or territory being party to treaties to which Vietnam is a signatory, there is an extra process in registration of representative office. The representative office shall be approved by relevant ministers, heads of ministerial agencies for establishment of the representative office.

Thirdly, trade services are supplied in foreign countries, but such does not exist in Vietnam

The foreign entity has to apply codes as following to Vietnam standard industrial classification system or CPC. If the foreign entity can not define a code, it is merely impossible to register the representative office.

In most of the cases, the foreign entity should consult with law firm in Vietnam whom lawyers have expertise in WTO laws, law on investment and experience in working with Vietnam state authorities, to prepare application right at the start and be ready to challenge the authorities when required to protect best interests of the clients.

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Can you copyright your name?

That does not serve a public interest, so no, copyright law does not support that.

Consider: copyrighting names would mean that people that are charged with ethical violations, crimes, or just dirty play could not be discussed in the news. Exxon, for instance, could just copyright their name and then prohibit any news media from discussing them by name.

Copyright only protects “creative works”, such as books, news articles, TV shows, movies, etc. While it does protect invented elements, such as characters, it is not so granular that names are protected. Thus, I could write a book about a dentist from Colorado Springs whose name was Harry Potter or James Bond. Names are not really considered all that unique, after all, I happen to know that there are 22 other Todd Gardiners in the United States (and I have met seven of them).

Even if I was to write an article about JK Rowlings’ Harry Potter, I could certainly do so as non-fiction, making a scholarly or newsworthy report on the character (but not use this character in my own fiction, obviously).

So, because you would be infringing on the rights of people who share your name, infringing unfairly on free speech rights of press and the public, interfering with the public interest to discuss things by their name, and because a name is not a “creative work” under copyright law, you cannot get copyright protections for use of your name.

Similarly, you might register a Trademark for your name. But the rules for trademark registration require use in commerce (such as a brand name), and the restrictions only prohibit competing use in commerce. I can still say “Microsoft” or “Starbucks”, even though they are trademarked. I just can’t name a business with these names unless it is in a different class of business (e.g. Starbuck’s Plumbing would be legal).

The units of language: symbols, letters, numbers, words, common phrases, and the names of objects/people/places are all very hard to restrict because we are using them to communicate with each other.

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Contract Dispute in Vietnam

Disputes in contract performance and solutions

Disputes occur during contract performance are beyond the control of the entity entering contractual relations. In developed countries, lawyers always invited to advise customers to identify potential disputes, and provide solutions, support and provide legal advice and to accompany the enterprises solve disputes in accordance with the provisions of the law, which help businesses to focus on its business activities. The contract should be carefully reviewed by lawyers.  Foreign companies when entering Vietnam mostly follow suit to engage dispute or litigation lawyers in Vietnam at early stage of the transactions.

Contract Dispute

Contractual disputes in Vietnam shall be construed as conflicts, disagreements, conflicts between the parties regarding the implementation or non-implementation of rights and obligations in the contract. Disputes could arise in failure to collect the payment from debtor in sales agreement, construction contract disputes between investor and contractor, labour dispute between employer and employee, insurance disputes between ship owner and insurance company.

Contract disputes must satisfy the following factors:

First, there is a contract between the parties. The contract would be in different for ms therefore, there is a need to clearly define if the contractual relationship has been formed or not.

Second, there is a breach of obligations or duties that are in violation of a party in the contractual relationship.

Third, there is disagreement between the parties about the handling of infringement or the consequences of such violations.

It should be noted, the contract disputes arise from the breach. However, not all breaches of contract also lead to disputes.

How to settle the contract disputes in Vietnam

Contractual disputes can be resolved by the following methods:

• Negotiation is the process or behavior in which the two sides conduct exchanges, agreement on common interests and characteristics of disagreement and come to a unified agreement. The negotiation is without the presence of third parties. However, if the lawyers in Vietnam would be involved during the negotiation process, at the role of representing or advising, counseling, then the negotiations tend to be more effective and parties would reach agreement.
• Mediation is one of the options for disputing parties to end the conflict. Mediation is different from negotiating with the intervention of a third party. Mediator will help parties to achieve agreement and resolve conflict.
• Court or arbitration: The settlement of the dispute in court would take time. The court’s ruling can be appealed. It should be noted that, per Vietnam laws, only Vietnam litigation or dispute law firms could represent the client at court. Commercial arbitration is available only in commercial-business sector. The advantage of this method is fast and efficient. However, compare with disputing at court, this method of handling dispute would take higher costs.

Disputes and dispute resolution matters are natural and inevitable in any countries including Vietnam. It is important that parties involved need to identify, anticipate disputes can occur. Contract or agreement should be reviewed by lawyers.  When there is a dispute, the dispute lawyers will be able to help parties to with advice to reasonable solution to address the disputes effectively.

How ANT Lawyers Could Help Your Business?

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How feasible is it to get a patent without an attorney?

How feasible is it to get a patent without an attorney (it is relatively advanced and there are few attorneys with acceptable knowledge)?

You can read some literature (like Patent It Yourself by Pressman) and have a reasonable shot at preparing a document that, ultimately, will become a patent.

The question you didn’t ask is what the value of that patent is. I hate to sound elitist, but without an attorney steering the ship from the beginning, it’s unlikely that patent will have substantial value.

It’s not that patent attorneys are gods among men, who uniquely possess the high degree of intellectual rigor to prepare a patent application. It’s just that patent law is insanely complex and unintuitive. There are a ton of ways you could go wrong.

And worse yet, by “wrong,” I don’t mean you’ll limit your chances of getting a patent. No, you’ll get a patent. But there will be some odd phrase buried somewhere between the application you prepared and the advocacy you undertook to get the application granted that will drastically limit the scope of the patent. And to the trained eye, those phrases jump off the page.

To put it another way, when I was a young patent attorney, the typical process would be that I’d draft an application and send it to an experienced partner for review. We’d inevitably meet to discuss it.

There often followed a word-by-word cross examination about why I wrote the application the way I did. “Do you need this word? Are we going to get a patent because of this word, and not get a patent without it? What purpose does this word serve?” That kind of thing.

For a long time, I would come away from those meetings with a much better understanding of the invention, and how to write a much better application. I like to think of myself as a reasonably clever guy, but even after law school and internships and all that, I couldn’t write a good patent application for at least a year after practicing. I am not unique in that regard.

As for the technological demands for understanding your invention, I assure you, someone can understand it. The good news is, they have you to help them. These days, it’s not hard to find a patent attorney with a PhD in the discipline your invention is in — at least broadly speaking.

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What is the first patent in America? And the patent number?

First patent issued by U.S.: First U.S. Patent Issued Today in 1790, issued in 1790.

They didn’t start using numbers until 1836, when Patent #1 was issued on July 13, 1836:

Another 108 patents issued in 1836. Patent #1 was issued to Senator John Ruggles, who happened to be chairman of the Senate Committee on Patents. While there, he put through a bill to reorganize the Patent Office, presumably knowing that one part of the bill would be that patents would now be numbered, went and invented something nominal so that, the sleaze he was, he could nab that first number. Here is the patent in full: Patent US1 - Locomotive steam-engine for rail and other roads.

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What Goods Allowed to Be Imported into Vietnam?

What Goods Allowed to Be Imported into Vietnam?

Foreign ownedcompanies in Vietnam wishing to import and distribute physical goods into Vietnam must comply with many regulations. It is imperative that the right to conduct import business of foreign investors and FDI companies differ from the right of Vietnamese traders having no foreign direct investment capital because trading activities are considered conditional investment area.

1.      General Principles of Imported Goods

In principle, as other countries, the importers have to follow the general rules when importing anddistributing physical goods into Vietnam:

-Not to import goods specified under the list of goods banned from import or suspended from import provided, published by Vietnam government;

-Follow the guideline or import regulations and conditions required by ministries and ministerial-level agencies. There are specific conditions for importing certain goods which the importers have to follow i.e. certain medical equipment have to be approved by the Ministry of Health; Food, cosmetics products need to be testedReceiving and transmitting telecom equipment must be inspected by Ministry of Information and Communication; Books, CDs will be checked and scanned for contents to be approved by Ministry of Cultures, Sport and Tourism; Equipment must satisfy energy, environmental regulations to be inspected and labeled by Ministry of Science and Technology…

-  Implement other relevant laws, commitments of the Socialist Republic of Vietnam in treaties which it has signed or acceded to, and the roadmap announced by the Ministry of Industry and Trade.

2.      Goods Prohibited to Be Imported into Vietnam

- For the goods being banned to be imported and distributed in Vietnam, the importers have to follow strictly to avoid penalties:

-Weapons, ammunitions, explosives (excluding industrial explosives), military technical equipment.

-Assorted fireworks, sky lanterns, assorted devices causing interference to vehicle speedometers.

-Used consumer goods: Textiles and garments, footwear, clothes; Electronic appliances; Refrigerating appliances; Home electric appliances; Medical equipment; Interior decoration goods;

-Assorted publications banned from dissemination and circulation in Vietnam

-Assorted cultural publications banned from dissemination and circulation or decided to be suspended from dissemination and circulation in Vietnam.

-Right-hand drive means of transport; assorted automobiles and their spare parts which have their frame or engine numbers erased, modified or tampered with; Assorted motorcycles, special-use motorbikes and motorbikes which have their frame or engine numbers erased, modified or tampered with

-Used supplies and vehicles

- Chemicals in Annex III of the Rotterdam Convention.

-Pesticides banned from use in Vietnam.

-Wastes and scraps, refrigerating equipment using C.F.C.

-Products and materials containing asbestos of the amphibole group

-Schedule-I toxic chemicals; Chemicals on the list of banned chemicals

It is important for foreign trader wishing to establish a trading company in Vietnam to not only study the market demand in Vietnam but also the country’s law on import, export, customs law to ensure their compliance during the operation.  If doubted, the Client is suggested to reach out for help and advisory of law firm in Vietnam by qualified lawyers in the area of import, export and customs.

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Dispute Resolution Through Arbitration

Dispute resolution methods are litigation, negotiation, mediation and arbitration. Handing disputes requires litigation law firm with dispute lawyers in Vietnam having experience and knowledge to provide resolutions to complex cross-border issues, commercial and civil disputes.

In the current business environment, most business agreements could contain a clause stipulating that disputes arisen must be resolved in arbitration.  For a dispute to be referred to arbitration, there must be a valid arbitration agreement in writing, either as an arbitration clause within a contract or a separate agreement.  If the agreement is included within the context of a contract, the arbitration clause is considered independent, and any modification, extension, or termination of the contract does not affect the validity of the arbitration clause. Vietnamese law allows for a written arbitration agreement to take the form in any written form, so long as the writing clearly indicates the parties’ intent to resolve any dispute via arbitration. If a dispute falls within the scope of a valid arbitration agreement, but a party attempts to initiate court proceedings, the residing court does not have jurisdiction over the matter, and must drop the case. Moreover, an arbitration agreement does not have to stipulate specific dispute matters and/or the arbitration organization authorized to resolve disputes without supplemental agreement.  Even if there is a valid arbitration agreement, Vietnamese Arbitration Law stipulates that in order for a dispute to go to arbitration, it must also fit into one of three categories:

(1) disputes arising from “commercial activities”;

(2) disputes where at least one party is engaged in commercial activities;

(3) other disputes where the law stipulates that arbitration is a permissible means of resolution.

In category (1), the term “commercial activity” is defined in Commercial Law No. 36-2005-QH11 (31 December 2005) as “activity for profit-making purposes comprising the purchase and sale of goods, provision of services, investment, commercial enhancement, and other activities for profit-making purposes.”  The types of disputes that often fall into the second category are noncommercial disputes, such as civil disputes, where at least one party to the dispute is engaged in commercial activities. However, this category does not apply in disputes between a good/service provider and a consumer. In this case, the law allows the party to choose between litigation and arbitration. Even the agreement includes a standard arbitration clause in the supply of goods or services contract, the dispute may not be arbitrated without the consumer’s consent. The final category of disputes permissible for arbitration gives legislators discretion to expand or maintain the types of disputes resolved through arbitration.  An example of a category (3) dispute is a dispute arising from investment activities governed by the Law on Investment.

Arbitration has become an extremely popular method of dispute resolution, as many businesses prefer it over the high costs of litigation.

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Effectiveness of a Lawsuit against Infringement of IP in Vietnam

Should IP holders handle with the infringement through litigation?

How to handle effectively with infringement is a big concern of Intellectual Property (IP) holders. Should the IP holder file a lawsuit at Court? Is this way effective in Vietnam?  This article will give you general information about handling of intellectualproperty disputes through legal action at court in Vietnam.

Unlike many countries in the world, in case of infringement, most IP holders proceed with lawsuits in the courts (judicial authorities), while other administrative agencies only perform measures to ensure enforcement of judgments of the court.

Protection of IP rights through the litigation has many advantages over administrative measures because it guarantees the enforcement and compensation from infringers. However, in our opinions, the practice of resolving IP rights disputes in courts is not as effective as administrative measures in Vietnam.

Vietnamese laws have not given separate regulations on procedures for settling IP disputes. Therefore, the procedures for settling disputes shall be governed by the Law on Civil procedure. According to Clause 2 of Article 30 and Clause 1 of Article 34 of this law, disputes over intellectual property rights and technology transfer between individuals and organizations and all purposes of profit are commercial disputes to be trialed at the courts of the province.

According to Article 202 of the IP Law, the court could decide the following civil measures to the infringers upon IP right:

-Compelling termination of the infringement of intellectual property rights;

-Compelling public rectification and apology;

-Compelling the performance of civil obligations;

-Compelling compensation for damages;

-Compelling destruction, or distribution/ use for non-commercial purpose.

In addition, when initiating a lawsuit or during dispute at court, the IP holders may request the court to apply provisional emergency measures in order to prevent damages.

In practice, the IP holder does not proactively protect IP rights by civil measures to file a lawsuit at court. The number of cases resolved by courts is much lower than the number of cases handled by administrative measures. Specifically, the number of cases resolved by court are 177 cases from 2012 to 2015, of which 91 cases were canceled. The number of cases resolved by administrative measure is of 22,914 cases (excluding cases handled by Vietnam Customs Authority)

The reason for the above survey is that, the IP holder is less likely to resolve disputes through courts because time for dispute resolution is lengthy, the process is cumbersome and complicated, but not as effective as administrative measures. Therefore, dealing with disputes in the specialized administrations will give faster effects to the IP holders in Vietnam.

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How hard is it to invalidate a patent?

The common fallacy that may be the impetus of your question is that patents are easy to get. They’re not—I’ve seen inventors spend a decade and hundreds of thousands of dollars getting one. So to invalidate someone’s life’s work will take you more than a casual search on Google. :)

What you see in the other answers is that it’s generally very difficult to invalidate a patent, and often very expensive, precisely because you basically have to re-do everything they spent years and lots of money doing to get the patent (which is very difficult) and then find a critical error or fraud in that process. And odds are, they’re geniuses, which is why they got the patent. They are probably students who have based their theses on them, large companies who are their customers and would lose umpteen millions if it were overturned, famous professors who have co-authored papers with them—not to mention a growing list of lawyers who have spent a decade learning the technologies well enough to help them get the patent.

The public relations arms of the serial infringers will tell you that patents are often sketchy and all you need to do if an inventor asks you to get a license to use his invention is to threaten to ‘turn him in’ for asking, threaten to ‘invalidate his patent.’ No, as others have said, patents are presumed valid because they normally are. All those questions of obviousness and stuff already have a very long paper-trail. And the question the original patent examiner researches isn’t whether it’s obvious to normal people, it’s whether it’s obvious to other geniuses, those ‘skilled in the art’ as it were.

It’s not that it doesn’t happen. It’s that it’s a difficult long expensive uphill battle, and it’s that the media, when they say otherwise, are mostly reporting paid PR pieces from large and beloved corporate defendants.

As with all questions of fact, you academically must kill your darlings to find the truth.

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Please click here to learn more about ANT Lawyers IP Practice or contact our IP lawyers in Vietnam for advice via email ant@antlawyers.vn or call our office at (+84) 24 32 23 27 71

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