Consulting and Drafting Technology Transfer Contracts

According to the provisions of the Law on Technology Transfer 2017, Technology Transfer is the transfer of technology ownership or the right to use technology from the owner of that technology to the other party.

Technology is defined as the solutions, processes, and ways (with or without tools) to transform resources into products. It could be divided into Advanced Technology, New Technology, Clean Technology, High Technology.

According to regulations, the technology transfer contract must be made in writing or in another form that must be signed and stamped by the parties (Sign and stamp adjacent pages of the contract and the appendix).

Relevant legal documents

1. Law on Technology Transfer 2017
2. Decision 76/2018/ND-CP guiding the Law on Technology Transfer

Content of technology transfer contract

1. Full names of the transferor and transferee, contact information such as address, phone number, fax, email, website, and bank account information.
2. Name of technology which is transferred.
3. Transferred technology objects, products created by technology, product standards and quality, such as: Technical secrets, technological plans and processes, solutions, specifications, drawings, technical diagrams; formulas, computer software, data information, solutions to rationalize production and innovate technology, machinery and equipment accompanying the above objects. It should be noted that if the transferred technology object is protected by intellectual property rights, the transfer of intellectual property rights is carried out in accordance with the provisions of law on intellectual property.
4. Scope of transfer: Transfer of ownership rights or transfer of technology usage rights.
5. Technology transfer methods: including independent technology transfer, transfer in investment projects, capital contribution with technology, commercial franchising, transfer of intellectual property rights, purchase and sale of machinery and equipment (associated with technology).
6. Rights and obligations of the parties.
7. Price, payment method.
8. Term and the valid period of the contract.
9. Concepts and terms used in the contract (if any).
10. Plan, progress of technology transfer, location for technology transfer.
11. Responsibility for warranty of transferred technology.
12. Other general contents such as Penalties for breach of contract, Liability due to breach of contract, Dispute resolution agency…

Note: Vietnam law regulates some technologies that are restricted or prohibited from being transferred. So, it is necessary to carefully check the technology content before signing a contract to avoid receiving the transfer of prohibited or restricted technologies (especially transfer from abroad).

Some technologies which are prohibited from transfer:

1. Failure to meet regulations on workplace health and safety; ensure human health; protect natural resources, environment and biodiversity;
2. Create products that cause negative consequences for social and economic development; adversely affect national defense, security, social order and safety;
3. Technology, machinery and equipment which are no longer commonly used and transferred in developing countries and do not meet national standards;
4. Technology that uses toxic chemicals or generates waste that does not meet national environmental standards;
5. Use radioactive substances or create radioactive substances that do not meet national technical standards.

If you have any questions related to industrial property transfer contracts, feel free to contact An Luat Vietnam for support and advice.