Intellectual property disputes, including trade secret transfers, are becoming increasingly common both globally and in Vietnam. So, what exactly is a transfer of trade secrets? Is it mandatory to register such a transfer of trade secrets with State authorities? Let’s explore this issue with NPLaw in the article below.
Intellectual property disputes, including trade secret transfers, are becoming increasingly common both globally and in Vietnam. So, what exactly is a transfer of trade secrets? Is it mandatory to register such a transfer of trade secrets with State authorities? Let’s explore this issue with NPLaw in the article below.
I. The need for transferring trade secrets
In a rapidly developing and globalized economy, trade secrets are valuable assets that significantly impact the internal growth of enterprises and their creators. Intellectual property disputes, particularly those related to trade secret transfers, are prevalent worldwide, including in Vietnam. However, current laws on trade secrets do not provide detailed regulations on protective measures or specific actions required to safeguard confidential business information and trade secrets in trade secret transfer agreements.
II. Legal provisions on trade secret transfers
1. What is a trade secret transfer?
Based on Clause 23, Article 4 of the Law on Intellectual Property 2005 (as amended by Clause 2, Article 1 of the amended Law on Intellectual Property 2009), a trade secret is information obtained from financial or intellectual investment activities that has not been disclosed and has the potential to be used in business.
Accordingly, the transfer of trade secrets refers to the transfer of some or all of the undisclosed information obtained from financial or intellectual investment activities, which has the potential to be used in business.
2. Is it mandatory to register the transfer of trade secrets with State authorities?
Trade secret transfers are contractual agreements between parties, there is no requirement to notify or register them with State authorities.
In the event of a dispute following a trade secret transfer, the resolution will be based on the contractual terms agreed upon by the parties. This underscores the importance of careful drafting and clear terms related to confidentiality and dispute resolution in trade secret transfer agreements.
III. Clarification on trade secret transfers
1. What constitutes an infringement in the trade secret transfer?
Pursuant to Clause 1, Article 127 of the Law on Intellectual Property 2005, the following acts are considered infringements of trade secret rights:
- Accessing or collecting trade secret information by breaching security measures implemented by the lawful controller of the trade secret;
- Disclosing or using trade secret information without the permission of the trade secret owner;
- Breaching confidentiality agreements or engaging in fraud, inducement, bribery, coercion, deception, or abuse of trust to access, collect, or disclose trade secrets;
- Accessing or collecting trade secret information submitted in applications for business licenses or product circulation licenses by circumventing security measures of competent authorities;
- Using or disclosing trade secrets despite knowing or having the obligation to know that such trade secrets were obtained through any of the above-mentioned acts;
- Failing to fulfill the confidentiality obligations on data as required by Law.
2. Can a trade secret owner prohibit others from using the trade secret after transfer?
Clause 3, Article 125 of the Law on Intellectual Property 2005 specifies the limitations on the right to prohibit others from using industrial property objects, including trade secrets. Specifically, a trade secret owner does not have the right to prohibit others from:
- Disclosing or using trade secrets obtained that they don’t know and have the obligation to know due to trade secrets were acquired unlawfully by another party;
- Disclosing confidential data for public protection purposes as stipulated in Clause 1, Article 128 of the Law;
- Using confidential data as prescribed in Article 128 of the Law, provided it is not for commercial purposes;
- Disclosing or using independently created trade secrets;
- Disclosing or using trade secrets derived from the analysis or evaluation of legally distributed products, provided that the analyst or evaluator is not bound by a confidentiality agreement with the trade secret owner or the seller.
Accordingly, in some cases, the trade secret owner does not have the right to prohibit others from using the trade secret after its transfer.
3. Can the transferor continue using the trade secret after the transfer?
The transfer of a trade secret means that the trade secret owner grants another organization or individual the right to use the trade secret within the scope of their rights. In this context, what is transferred is the right to use the trade secret, not the ownership of industrial property rights. The transferee is only permitted to use the trade secret within the limits set by the trade secret owner.
Therefore, after transferring the trade secret, the transferor retains ownership of the trade secret.
4. Is a contract required for the transfer of trade secrets?
Currently, the law does not require trade secret transfer agreements to be in written form.
The transfer of a trade secret is a transaction in which the owner transfers the right to use its trade secret to another organization or individual. It is an agreement between the parties, a formal contract is not mandatory for the transfer of trade secrets.
IV. Legal services for trade secret transfers
One of the reputable law firms providing legal services related to trade secret transfers is Ngoc Phu Law Company Limited (NPLaw Firm). By using our services, clients will receive dedicated support from highly qualified and experienced legal professionals and attorneys. Our team will provide expert advice on resolving issues related to trade secret transfers. If you require assistance in trade secret transfers to protect your legal rights and interests, do not hesitate to contact NPLaw for timely support through the following contact information:
