New Law on Technology Transfer in Vietnam

A new Law on Technology Transfer will take effect from 1 July 2018. The new Law on Technology Transfer reintroduces the requirement for registration of cross border transfer of technology which was abolished under the existing Law on Technology Transfer in 2006. The registration is the condition for a technology transfer contract to be valid. However, the new law does not impose any specific restriction on a technology contract like maximum contract period or cap on technology transfer royalty. Without these limitations, it is not clear on what basis the licensing authority would register or refuse to register a technology transfer contract.

This post in part is contributed by Nguyen Linh Chi, an intern at Venture North Law Limited.

Is information property under Vietnamese law?

In many circumstance, information (e.g. user data) is more important to a business than its physical assets. This leads to an important question about the legal nature of information under Vietnamese law. Under the Civil Code 2015, a property (tài sản) is object, money, valuable papers and property rights. Except for intellectual property rights (including trade secret and data compilation) which are clearly recognised as a property right, the law is not clear whether other types of confidential information can be regarded as property.

The Civil Code 2015 also recognises and protects “civil rights” (quyền dân sự). Civil rights can be established as the result of the business operation or production operation. Accordingly, in theory, information, which is created (or generated) from business operation or production operation, could arguably be subject to civil right of the relevant entity which creates such information. However, the problem is there may be more than entities which create the information.

New control on cross-border supplies of news in Vietnam

From May 2017, under Circular 38/2016, websites, mobile apps, search engines and social networks (offshore websites), which are located outside of Vietnam but have more than one million visits from Vietnamese users a month or have servers located in Vietnam must:

  • provide necessary contact details to the Ministry Communication and Information (MCI); and
  • at the MCI’s request, remove from the offshore websites information and news which are considered illegal under Vietnamese law by the MCI. If the offshore websites do not cooperate with the MCI, the MCI may apply technical measures to block the illegal information and news from being accessed by Vietnamese users.

Vietnamese telecommunication service providers are required to have the necessary technical equipment to implement MCI’s blocking order within three hours of receipt of the relevant order. Circular 38/2016 will apply to the most popular social networks in Vietnam such as Facebook, Google, and Youtube.