What Should Be Included In A Contract To Protect IP Rights in Vietnam?

The competitive advantage of an entity partially depends on its ability to protect its valuable proprietary information. You may have patentable designs, inventions or trade secrets giving your business a competitive advantage. In cases where you need to employ a freelancer, you may wonder how you can protect IPR from content generated by their work for you, and how you can protect/secure access to your company’s patents, patents, and other proprietary information. Generally, when working with employees or a potential business partner, two following important points should be brought into consideration: (i) always use written contracts whenever possible and ensure that your IP assets are protected by such agreements where applicable, and (ii) customize your IP contracts to match the IPR you are protecting and ensure that you have ample detailed information in the main provisions of the contracts.

IP assets usually appear in the following types of agreements/contracts:

• Non-Disclosure Agreements (NDA) and Confidentiality Agreements;
•  Memorandum of Understanding (MOU);
•  Employment agreements;
•  Agency agreements;
•  Trade mark/patent license and technology transfer;
• Franchise agreements;
•  Distribution agreements;
•  Manufacturing agreements;
•  Joint Venture agreements;
•  IT-related agreements; and
• Selling/assigning your IP.

Using the right provisions and agreements/contracts for your specific IPR is key to protecting them. Since different types of agreements/contracts are used to cover different IPR in Vietnam, the content and focus in each type of contract varies according to the specific IPR to be protected. Normally, the agreements/contracts should include the following principal rules:

(i) Definition of licensed rights;
(ii) Prevention of unauthorized use of the licensed rights;
(iii) Challenges of validity: Ensure validity of your agreement;
(iv) Protection of new IPR generated: Address ownership issues;
(v) Assignments or transfers: Prevent your IPR from being transferred to third parties without your permission;
(vi) Warranties: Guarantee your technology is fit for transfer;
(vii) IPR produced by employees: Avoid future disputes;
(viii) Confidentiality: Protect your confidential information;
(ix) Dispute resolution;
(x) Termination: Specify what happens when the agreement comes to an end.

In a nutshell, it is critical to customize the IP contracts to match the IPR you are protecting, and to make sure that you have included sufficient specific details in the contract provisions. Under Vietnam IP Law, certain IPR protection provisions are unlawful (e.g. Prohibiting a licensee from making improvements to the licensed technology and using the improvements), and may render a contract void if you include them in your agreement, so be careful when drafting these provisions. Special attention should be paid to signing an NDA or ensure that there is adequate protection in your contract addressing confidentiality issues. For manufacturing or sourcing in Vietnam, a non-disclosure/non-use/non-circumvention agreement to prevent your Vietnamese business partner from disclosing your confidential information or competing with you later should be signed. Finally, confidentiality provisions should be included in all employee contracts even if that employee is currently unlikely to have access to confidential information.

Readmore: IPR enforcement in Vietnam