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

On November 14th and 15th, 2017, European Chamber of Commerce in Vietnam held a seminar for representatives from businesses and law firms “IP considerations in Technology 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 01st, 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 in Vietnam 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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ANT Lawyers Participating in GMS Rail Expansion Summit in Hanoi

Railway infrastructure project will be a huge opportunity for Vietnam to connect with neighboring countries, promote trade growth. Huge financial sources will be needed. For government’s perspective, support from private sector will be encouraged through policy, and laws on Public Private Partnership which will be drafted to replace Decree 15/2015/ND-CP promulgated since 2015. From private sector’s perspectives, investment into infrastructure will be opportunities, for investor, bank, EPC main contractor, sub-contractor, consultants to participate.

On Nov. 30 – Dec. 1, 2017, in Hanoi, Vietnam, GMS Rail Expansion Summit http://gmsrail.org has been held.  The countries of the Greater Mekong Subregion (GMS) – Cambodia, the People’s Republic of China (PRC), the Lao People’s Democratic Republic (Lao PDR), Myanmar, Thailand, and Vietnam – have expressed their desire, through the GMS Economic Cooperation Program, for better transport connectivity to improve the environment for trade.

The railways in the GMS countries have developed independently over the course of a century and are today, with the exception of a connection between the PRC and Vietnam, a collection of national railway networks that do not interconnect. Each national railway has developed into a unique system with its own standards and procedures. In view of escalating subregional trade, growing concerns over climate change and, more recently, sharply fluctuating fuel costs, the GMS countries have accelerated their plans for upgrading their national railway networks and for interconnecting these by constructing new railway connections.

It appears that, during the different phases of development of rail infrastructure projects, it is important to identify potential areas for issues to be arisen and therefore put in place a mechanism to minimize risks. The risks will need to be allocated to entity which is best positioned to manage such risks, which has to be shown in the form of contracts, agreement, to clearly determine roles of parties.

Mr. Tuan Nguyen and Mr. Thomas Giglione of ANT Lawyers, a law firm in Vietnam acted as chairmen of the conference and shared to the audience being government officials, investors, EPC contractors, consultants about potential risks arisen during different phases of executing rail infrastructure project and offer solutions to manage such.It has been highlighted for stakeholders to consider designing a dispute resolution system that resolve potential disputes in relation to the multi billion-dollar project.

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Foreign investment exceeds US$33 billion in 11 months

HCMC – Vietnam has attracted US$4.85 billion of foreign investment this month, taking the total pledged capital in the year to date to more than US$33 billion, up nearly 83% year-on-year.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, in the year to November 20, over 2,290 new projects had obtained investment certificates with total registered capital of US$19.8 billion, up 52% year-on-year.

Besides, 1,100 foreign-invested projects got approval to inject an additional US$8 billion, up nearly 58% year-on-year. There were more than 4,500 mergers and acquisitions (M&A) deals involving foreign investors with total capital contributions of about US$5.3 billion, up nearly 58%.

As such, the total amount of foreign investment this year to date has amounted to more than US$33 billion. It is estimated that foreign investment into the country would reach US$35 billion by the end of this year, far exceeding the Ministry of Planning and Investment’s expectation of US$28 billion.

The processing and manufacturing sector took the lead in attracting foreign funds in the 11 months, though its proportion tumbled. With nearly US$15 billion of foreign investment in January-October, this sector made up less than 50% of the country’s total, a sharp fall compared to its proportion of about 70% in the past few years.

Meanwhile, the power generation and distribution sector came second with total foreign investment of nearly US$8.4 billion, accounting for a quarter of the country’s total. Attracting US$2.5 billion, the real estate sector came third, making up nearly 8%.

As of November 20, foreign direct investment (FDI) projects had disbursed US$16 billion, up 11.9% over the same period last year.

In January-November, exports of FDI enterprises, including crude oil, reached nearly US$141 billion, up nearly 23% from the year-ago period and accounting for more than 72% of the country’s total export revenue.

Their imports have also risen by more than 23% year-on-year to nearly US$115 billion, making up 60% of the country’s total. This led to the FDI sector’s trade surplus of more than US$26 billion.

According to the Foreign Investment Agency, there have been 112 countries and territories investing in Vietnam this year to date.

Japan has surpassed South Korea to become the biggest investor with nearly US$9 billion, or 27% of the country’s total. South Korea came second with total registered capital of nearly US$8.2 billion and Singapore took the third position with US$4.7 billion.

Source: The Saigon Times

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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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