Technology Transfer in Close-up

Background

The Civil Code 2015, Law on Science and Technology 2013, Decree 08/2014/ND-CP dated 27 January 2014 detailing and guiding the implementation of a number of articles of the Law on Science and Technology, Law on Technology Transfer 2017, Decree 76/2018/ND-CP dated 15 May 2018 providing guidelines for certain articles of the Law on technology transfer, the Law on Intellectual Property, etc. form a relatively complete legal framework and are expected to contribute to strongly promote technology transfer activities in Vietnam.

Technology transfer means the transfer of the ownership or the use right of a technology from a transferor to a transferee. Under Article 7 of the Law on Technology Transfer, the owner of a technology may assign its ownership or license its use right of the technology. As implied by the Law on Technology Transfer, to transfer a technology, the transferor must have the ownership of such technology. Meanwhile, the Civil Code stipulates that ownership can only be created upon a property. Thus, the technology under the Law on Technology Transfer should be a property.

In fact, Vietnamese enterprises’ needs in research, innovation and technology transfer to improve productivity, quality and competitiveness of products and goods have gradually been catching up with market trends in the context that Vietnam is more deeply integrating into the world.

Necessity for technology transfer

Up until recently major companies tended to set up their own laboratory and where possible perform the research and development antical for their business in that laboratory without relying on technologies introduced from outside. However, as technological development becomes highly advanced and complex and research and development costs and risks increase, it has become practically impossible for a single company to do all the research and development (R&D) necessary for its business independently.

For medium-to small-sized companies for whom R&D resources are less favorable when compared to large-sized companies bringing in superior technologies from outside is absolutely necessary for efficient research and development.

With an increase in research and development expenditures, companies are put under increasing pressure to recoup the money as soon as possible. Royalties, etc. through technology transfer to other companies as a means of turning the company’s research results promptly into profit is a great enticement to some companies.

The research results from universities and research institutes should be passed on to society. If such research results are transferred to private companies, new products that came out of the technologies eventually pass into the hands of the public to help them in their daily life. Technology transfer is an extremely important means available to universities and research institutes of passing research results on to society. Also, the royalties obtained through technology transfer are passed on to universities to serve as funds for new research and development.

Improving environment for technology transfer

The network of Technology and Innovation Support Centers (TISC) was established on the basis of the TISC project initiated by the World Intellectual Property Organization (WIPO) on a global scale. The WIPO TISC program provides innovators in developing countries with access to locally based, high quality technology information and related services, helping them to exploit their innovative potential and to create, protect, and manage their intellectual property (IP) rights. Since the TISC program was launched in 2009 to the end of 2018, 78 countries, including 24 least developed countries, have signed an agreement with WIPO to develop the national TISC network. According to information provided by the national TISC coordinators, 757 TISC were established during this period. ASEAN countries also participate in this network and have achieved certain effectiveness in supporting technology and innovation, especially focusing on promoting intellectual property and technology transfer.

The Intellectual Property Office of Vietnam (IP Vietnam) – Ministry of Science and Technology plays the central role to connect and coordinate activities of the TISC network. The IP Vietnam is responsible for planning and developing in-depth training programs for network members in order to have sufficient skills to search information, consult procedures for establishing rights, commercializing and technology transfer for inventors in an institution, school, or business organization. This will help institutions strengthen their capacity in IP activities, especially focusing on increasing the number of patent applications of Vietnamese subjects as well as promoting public technology transfer activities, commercialize intellectual property. Through the TISC network of Vietnam and the ASEAN region, the activities of establishing intellectual property rights and technology transfer of Vietnamese subjects, especially of institutes/universities/schools, have been promoted. and contributing to improving the capacity of innovation and national competitiveness under the direction of the Government of Vietnam.

Acquiring patents on research results on technologies or inventions at universities and licensing the technologies to private companies to enable them to be used effectively in society is an excellent means of contributing to the development of new business fields and improving the technological capabilities of industry, and of invigorating research activities at universities. The joint focus of industry, academia, and government on making Vietnam a nation based on intellectual property, including enacting the Law on Intellectual Property in 2005 is gaining momentum. Some companies position intellectual property as a key managerial resource, and actively license it to increase corporate income. Also, universities and research institutes are pushing forward with building a structure to transfer research results to industry to develop new markets and provide products and services with high added value as a management strategy for the future, the utilization of intellectual properties is increasingly important, and this includes the distribution of patents and the effective use of external resources. For this purpose, it is indispensable to develop patent distribution and technology transfer markets. However, these markets in Vietnam are currently much too small, and further expansion is required for them to be effective.

Below is an exemplary outline of a patent distribution promotion program:

– Promoting patent distribution using human resources

Dispatching patent distribution advisors
Holding patent distribution promotion seminars

– Providing and utilizing information on licensable/transferable patents

Developing a patent distribution database
Providing a collection of examples of the use of licensable/transferable patents
Dispatching patent information utilization assistance advisors

– Grooming intellectual property transaction operators

Providing an intellectual property right transaction operator database
Holding international patent distribution seminars
Education and training for grooming intellectual property transaction operators

Registration of technology transfer

As defined, technology means a solution, process, or know-how that may or may not be supported by instruments and facilities to convert resources into products. Technology transfer is the transfer of the rights to own or use (a part or whole) of a technology from a party which has the right to transfer. According to the Law on Technology Transfer and Decree No. 76/2018/ND-CP, technology transfer must be registered in Vietnam since 1 July 2018. Before that, registration was only mandatory for technology transfers which were restricted. The following types of technology transfer need to be registered with the science and technology authority:

Technology transfer from a foreign country to Vietnam;
Technology transfer from Vietnam to a foreign country; and
Domestic technology transfer with use of state fund/ budget, excluding cases where Registration Certificate of Outcomes Implementing Tasks on Science and Technology Tasks has been already granted.

If the transferred technology involves intellectual property rights protection, the transfer will be carried out according to the Law on Intellectual Property. Involved parties need to register for intellectual property rights and technology transfer separately. Within 90 days from the signing date of a technology transfer contract, the party obliged to technology transfer registration shall submit an application for a Technology Transfer Registration Certificate to the science and technology authority. In addition to the technology transfer contract (original or certified copy thereof), the following documents are required:

Notarized or authenticated translated copies of the technology transfer agreement in Vietnamese;
Copies of Investment Registration Certificates of both parties;
Documents confirming the legal status of the representatives of the parties to the agreement; and
Power of Attorney (in case a third party has been authorized to carry out the registration)