The rights and obligations of the parties in a technology transfer contract depend largely on the agreement of the parties in the contract. The law, specifically the Law on Technology Transfer 2017, only provides basic provisions related to the rights and obligations between the parties in the transfer contract. Whether the transferee can develop technology or not will be the content that the parties can discuss and agree with each other in the contract. However, it should be noted, regarding the licensing of use rights related to industrial property objects, the Law on Intellectual Property currently prohibits the introduction of provisions restricting the rights of the licensee in the contract, for example, the right to make improvements based on the objects to which they are licensed to use (point a, clause 2, Article 144 of the Intellectual Property Law). In this case, the introduction of restrictions would not be consistent with the provisions of intellectual property law.
Dispute of technology transfer contract
The scope of technology transfer is very wide, leading to frequent disputes. Prominent among them is the subject of transfer, because when it comes to technology, it is associated with technological know-how or certain inventions. Whether the invention is legally protected in Vietnam, whether the licensor has established rights to that invention or technological know-how, will lead to the licensor’s right to the transferee. In addition, the story of whether the transferred technology meets the transferee’s requirements on aesthetic and technical criteria… or not is also an easy cause of disputes between the parties in the contract.
According to experts, there are many causes leading to disputes in technology transfer contracts, most of which stem from violations of the transferee. Because assets and technology are transferred at a time when the market needs it, when the market changes, the transferee uses the excuse that the technology has become “outdated” to not fulfill the payment obligation. In addition, the cause of the dispute may be that the transferee has violated its obligations related to the use or security of the transferred technology, even illegally transferring the transferred technology to a third party without the licensor’s consent, or the licensor commits violations of market expansion and dominance, leading to becoming a direct competitor of the licensor.
Besides, it is also not excluded that in many cases, disputes arise from the transferor’s own violations. When transferring, the transferor needs to train, test operation, ensure that products manufactured from that technology must ensure stability and are obliged to monitor and supervise within a certain time. After that time, the products produced do not meet the requirements and do not meet the technological criteria. In this case, did the transferor inadvertently hide any secret? The fact that the technology is not completely transferred causes the product not to meet the criteria that the technology has described or required.
More specifically, for Vietnamese enterprises receiving technology transfer from abroad, foreign parties often provide model contracts for the Vietnamese side. Foreign enterprises, especially companies and large corporations, often have extensive experience in knowledge as well as negotiation skills in technology transfer deals, while this is not the case. a weakness of Vietnamese enterprises. Even, there are many Vietnamese enterprises that are subjective, not careful and thorough in understanding the provisions of the law as well as drafting and reviewing the contents of the contract, leading to the signing of the contract. contract with unfavorable terms, when implemented in practice often arise disputes.
Solutions for enterprises
Currently, the state encourages technology transfer, especially from abroad to Vietnam. However, according to experts, most Vietnamese enterprises are often only interested in the commercialization of technology, but pay little attention to legal issues, and have not been proactive in negotiating and signing contracts. to unnecessary risks and losses.
Therefore, in order to ensure their legitimate interests in the technology transfer contract and avoid unnecessary disputes arising from this contract, the parties need to have a certain goodwill and caution in negotiating, signing and implementing contracts, especially Vietnamese enterprises when receiving technology transfer from abroad.
Firstly, before entering into, preparing to sign contracts related to technology transfer, Vietnamese enterprises should pay attention to the subject such as whether the subject is the owner of the technology, the owner of the diploma. , invention, utility solution or property, thereby determining whether or not they have the right to transfer.
Secondly, enterprises need to carefully consider whether the transferred content or technology violates the content or technology that is restricted or prohibited from transferring, thereby adjusting the contract to suit the provisions of the law. law.
Thirdly, on the issue of information security. The fact that the parties agree on an unreasonable transfer fee can easily lead to the transferee liquidating the contract, secretly transferring to a third party, investing to a third party for the third party to exploit and use the technology without the consent of the transferee. the transferor cannot intervene or prove the violation to force the termination of the act. Therefore, it is extremely necessary and important for the parties to closely agree on terms related to information security.
Finally, when signing contracts with foreign enterprises, it is necessary to pay attention to a number of issues related to civil transactions involving foreign elements. Vietnamese businesses need to pay attention, in the contract, which language will be given priority? The governing law is the law of which country? When choosing a foreign law, Vietnamese enterprises need to carefully study and prevent disadvantages and risks that may arise. Regarding the dispute settlement agency, the settlement of disputes in foreign jurisdictions often causes and leads to great losses and costs for Vietnamese enterprises, sometimes even exceeding the contract value. This is also an important term that Vietnamese businesses should note before signing a contract.
Above is the article about “Dispute of technology transfer contract” by Apra Law Firm. If you have questions or comments about the issues mentioned in the article and need to be answered, please contact the hotline for advice and support.
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