How are trade secrets protected in Vietnam?

Wednesday, March 12, 2014 12:00 AM | UTC+7 Viewed: 923
A trade secret is highly confidential and sensitive information entrusted only to a select group of individuals within a company. A company may suffer significant economic injury if its trade secrets are disclosed or misappropriated.

What constitutes a ‘trade secret’ in Vietnam?

A trade secret is any valuable commercial information not generally known or readily approachable by the public that provides the trade secret owner with a competitive edge.

Such information is protected by the owner by necessary means to prevent form being disclosed and easily approached.

Such information is protected by its owner using necessary measures to prevent infringement and ascertainment.

Trade secret misappropriation in Vietnam

Access or collection of information deemed ‘trade secret’ by circumventing the anti-theft measures implemented by the lawful owner of such secrets;

Disclosure or use of information deemed ‘trade secret’ without the permission of its lawful owner;

Breach of a confidentiality contract, cheat or abuse the trust of a person with an obligation to maintain confidentiality with the intend to access, collect and disclose information deemed “trade secret”;

Access or collection of information deemed ‘trade secret’ from another individual when such individual is conducting business-related procedures as stipulated by law or procedures to distribute products;

Infringe trade secrets by circumventing anti-theft measures taken by State bodies, or by using such information for business purposes or for the purpose of applying for a business-related permit or a permit to distribute products.

Penalties for trade secret misappropriation in Vietnam

Any instances of conduct outlined above are punishable by fine ranging from 5 million to 10 million VND. 

Any persons having engaged in conduct the following acts are assessed a fine ranging from 10 million to 20 million VND:

-          Use of a trade secret in order to produce and distribute goods or to provide services in two or more provinces or cities under central authority;

-          Disclosure or provision of a trade secret to a competitor of the lawful owner of such secret.

In addition to the abovementioned fines, the authorities may confiscate any material evidence or facilities used to commit the theft or misappropriation, and may order the disgorgement of all profits earned from the illegal act. 

What protective strategies are available for trade secret owners in Vietnam? 

To prevent trade secret misappropriation, trade secret owners may take among the following protective measures in Vietnam:

·         Enter into confidentiality or non-disclosure agreements (NDAs) with employees and third-parties;

·         Restrict knowledge of any key information to a few trusted individuals;

·         Require employees to wear identification badges or carry identification cards;

·         Restrict the ability of employees to use tools such as storage devices, cameras, etc., when approaching confidential information.

·         Carefully examine interviewees to prevent spying from competitors;

·         Divide the company into separate departments;

·         Keep all sensitive documents in a safe and undisclosed location;

·         Install visitor control systems.

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