Trade Secret Protection in Vietnam

Trade secrets are the most valuable asset a business can own. It is not only unique production formulas, effective business processes or loyalty lists, but also includes countless other commercially valuable information such as management know-how, unique marketing strategies, research and development results of new products, etc.  Strategic vendor lists, and even insider information on categories like corporate culture. This information, when strictly protected, will help businesses maintain a sustainable competitive advantage in the market. Thanks to business secrets, businesses can create unique products and services that are different from competitors, thereby attracting customers and building loyalty. Moreover, business secrets are also the key for businesses to expand the market, increase revenue and improve their position in the market. The protection of trade secrets not only benefits businesses but also contributes to the overall development of the economy. When businesses are protected by intellectual property rights, they will be motivated to invest in research and development, create new products and services, promote innovation and enhance the competitiveness of the economy. Viet An Law will guide customers to protect business secrets in Vietnam through the article below.

Legal Basis

• Current Intellectual Property Law and Related Guiding Documents

Preliminary about trade secrets in Vietnam

The concept of trade secrets

“Trade secrets are information obtained from financial and intellectual investments, which have not been disclosed and are capable of being used in business.”

The definition of this trade secret can be understood as follows:

Business secrets are a collection of unique and valuable information, created from the financial and intellectual investment process of the enterprise. This information can include forms such as text, data, images, formulas, processes, techniques, and also intangible knowledge and experience. The special thing is that this information has not been widely disclosed, is thoroughly protected by the owner and has the ability to be directly applied to business activities, helping businesses create new products and services, improve production processes and create competitive advantages in the market.

The importance of protecting trade secrets in Vietnam

Conditions for protection of trade secrets in Vietnam

• Not common knowledge and not easy to obtain;
• When used in business, it will give the holder of a trade secret an advantage over the person who does not hold or does not use such trade secret;
• Be secured by the owner by necessary measures so that such business secrets are not disclosed and cannot be easily accessed.

Unprotected subjects in the name of trade secrets

• Identity secrets;
• Secrets of state management;
• Secrets of national defense and security;
• Other confidential information that is not related to business.

Acts of infringing on trade secrets in Vietnam

• Accessing and collecting information belonging to trade secrets by resisting the security measures of the lawful controller of such business secrets;
• Disclosing or using information belonging to trade secrets without the permission of the owner of such trade secret;
• Violating confidentiality contracts or deceiving or inducing, bribing, coercing, enticing, or abusing the trust of persons with confidentiality obligations in order to access, collect or disclose business secrets;
• Accessing and collecting information belonging to the business secret of the applicant according to the procedures for applying for a business license or product circulation by resisting the security measures of the competent authority;
• Using or disclosing a business secret even though it is known or obliged to know that such business secret obtained by another person is related to one of the above acts;
• Failure to fulfill confidentiality obligations

Exceptions

• Disclosing or using a business secret obtained without knowing and not being obliged to know that such business secret was illegally obtained by another person;
• Disclosure of confidential data to protect the public;
• Use confidential data for non-commercial purposes;
• Disclosure and use of independently created trade secrets;
• Disclosure and use of trade secrets created as a result of analysis and evaluation of lawfully distributed products provided that the analysts and evaluators do not have other agreements with the owners of trade secrets or sellers.

Guidance on archiving records of protection of trade secrets in Vietnam

Clearly identify confidential information

Step 1: Set up a working group

• Participants: Including representatives from related departments such as production, research, development, marketing, human resources, IT.
• Team Tasks:
  • Identify the types of information that are valuable to the business.
  • Assess the sensitivity of each type of information.
  • Classify information according to security levels.

Step 2: Identify the types of confidential information of the business, which can be the following information

• Production Formula: Including chemical formulas, processing formulas, unique production processes.
• Product design: Technical drawings, design samples, product production process.
• Client information: Client list, contact information, transaction history, personal data.
• Business plan: Business strategy, financial forecast, marketing plan.
• Software source code: The source code of proprietary software.
• Competitor information: Information about competitors’ products, services, strategies.
• Personnel information: Personnel records, salaries and bonuses, capacity assessments.

Step 3: Decentralize security density

• Public Information: Information that has been widely disclosed, does not have a high security value.
• Internal information: Information is only shared within the business, not disclosed to the outside.
• Confidential information: Information with high business value, if disclosed, will cause great damage to the business.
• Top Confidential Information: Extremely important information, if leaked, can have serious consequences.

Step 4: Make a detailed catalog

• Each type of information: It is necessary to clearly define the content, form of storage, and who has access.
• Regular updates: The catalog needs to be updated regularly to reflect changes in the operations of the business.

Build a security management system

Building an effective security management system is paramount for every business. To achieve this goal, businesses need to develop a clear and detailed security policy, including regulations on accessing, sharing, storing, and destroying information. Besides, the proper decentralization of access, granting only permissions to those who really need it, is also an important factor. In addition, regular training for employees to raise security awareness and equip them with the knowledge they need to prevent threats. The use of security tools such as firewalls, intrusion detection systems, and data encryption also plays an important role in protecting information.

Methods of storing trade secrets

If you need support with the storage of trade secrets in Vietnam, United States, please contact Viet An Law for the earliest support!