The Regulation on Science and Technology Enterprises in Vietnam

The Regulation on Science and Technology Enterprises in Vietnam

The science and technology enterprises (S&T Enterprises) means an enterprise implementing production and business science and technology service to make a goods or product from results of science research and technology development. The S&T Enterprise’s operation is based on the successful application and exploitation of research process in itself or the results of scientific and technological research from the scientists, organizations or research results transferred from abroad that they have the lawful ownership use rights. The Government issued the Decree No. 13/2019/ND-CP dated on February 01^st, 2019 on science and technology enterprises.

The setting up of S&T Enterprises in Vietnam is only acceptable when meeting the following conditions for granting Certificates of science and technology enterprise, which is acting as operation license as well as basis for implementing the incentives and support policy for investment and takes effect nationwide: i) Established and operated under the Law on Enterprises; ii) Being able to create or apply scientific and technological results which are evaluated, appraised and recognized by competent authorities; iii) Obtaining turnover form the production of, and dealing in, products and goods created from scientific and technological results for at least 30% of the total turnover. This condition shall apply in case the enterprises is established to or more 5 years.

Certificate of science and technology enterprise is issued by the Department of Science and Technology or National Agency for Technology Entrepreneurship and Commercialization Development (NATECH) belonging to the Ministry of Science and Technology depending on each specific case.

One of the important provisions related to the S&T Enterprises of Decision No. 844/QD-TTg of the Prime Minister dated on May 18^th, 2016 on approval for “Assistance policies on national innovative startup ecosystem to 2025” stipulates for continuing to implement the Project of Vietnamese Silicon Valley. This Project have been creating the most favourable conditions for development of the S&T Enterprises and encouraging S&T Enterprises to research, improve their goods or product to meet the demands of market.

With the application of scientific research results and technological development into production and business activities, S&T Enterprises not only bring new high quality products which are able to compete with imported goods, but also encourage science and technology research and application into production and business. S&T Enterprises are entitled to enjoy preferential on enterprise income tax exemption and reduction; exemption and reduction of land and water surface rent; credit incentives;… and especially supporting research activities and commercialization of new scientific and technological results supplemented by Decree No. 13/2019/ND-CP.

The promotion of commercialization of science and technology results contributes actively to the development of the science and technology market, facilitates the application of research results to real life. Every year, Vietnam has thousands of research results and inventions from universities, research institutes, research centers, domestic research groups and foreign organizations and individuals registered in Vietnam. But very few research results are applied to production or commercial products on the market. In order to resolve this situation, the Vietnamese Government supports the S&T Enterprises through policies on enjoying import and export tax; use of research equipment in national key laboratories, technology incubators,… of the State; investment preferences of the Scientific and Technological Development Fund and other funds; priority to participate in projects to support the commercialization of the results of science and technology, intellectual property of the State;… as stipulated in Decree No. 13/2019/ND-CP and relevant legal documents.

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When does a business owner not need to worry about registering its intellectual property?

There are not many instances where I would suggest a business owner not worry about protecting their intellectual property. If a product is not a new, innovative product, there is no need to worry about a patent, but trademarking the brand may still be critical to compete and stand out.

If a business owner has a local shop with no plans for interstate expansion, and they do not care if someone in another state has a company with the same name, they may be satisfied with their state’s trademark registry, rather than the federal registry. However, an interstate competitor may have other ideas about expansion and enforcement of its own rights. In those cases, it matters who used the name in commerce first, but it also matters who registered the name first. The outcome can result in a geographic split, but these outcomes are usually the result of expensive litigation that could have prevented with earlier planning.

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When can an owner of copyright or trademark use “notice symbols” on their products, such as ©, ®, or TM?

For copyrightable works, the owner can place the copyright designation – the “C in a circle” © - on her work from the moment the work is created, and include the year and her name. For example: © 2017 Jane Doe. A copyright notice can be used whether or not the work is registered with the U.S. Copyright Office. The notice is not required, but it puts the public on notice of her intent to claim and enforce her copyright.

          

A trademark owner can always use the “TM” mark on its goods and services, to put the public on notice of his intent to claim and enforce his trademark rights. The “R in a circle” – ® - is reserved only for federally registered trademarks. If you register your trademark with your state trademark registry, but not the USPTO, you may only use the “TM” mark.

I always recommend using the appropriate symbols as soon as you put your product to market. Whether you have registered them yet or not, this gives the public notice that you have considered your intellectual property protections and are prepared to enforce them.

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What are the critical steps to take, to protect your business’s intellectual property?

If you are a business owner, be sure your member agreement states that all intellectual property developed by members, shareholders, etc. belongs solely to the company and that members who develop  any intellectual property will execute any and all documents necessary to protect the company’s rights. This is particularly important in smaller businesses where the owners are the ones developing most or all of the creative ideas. Also, be sure that any employees and independent contractors who will work with trade secrets sign strong non-disclosure and non-competition agreements, because there is no registration for trade secrets (such as recipes and non-patentable formulas). Trade Secrets are protected only as long as they remain secret.

For example, our firm has done corporate, regulatory, and intellectual property work for almost 100 start-up breweries. We prepare these types of agreements all the time, to protect their beer recipes and formulas. We also register trademarks for their brewery names and beer brands whenever possible.

Also if possible, register it with the USPTO, U.S. Copyright Office, or in some cases, your state’s trademark registry or international registries. In some cases, a trademark is eligible for an early application before your business even opens, so take advantage of obtaining that earlier filing date. Just be aware there will be subsequent filing requirements after your business opens.

Register your copyrights on written works, including computer codes, screenplays, and artwork, and register them early. Statutory damages and attorney’s fees are usually not recoverable in an infringement action if the copyright was not registered before the infringement occurred or within 3 months of publication.

If you developed an innovative product, speak with a patent attorney about whether the product qualifies for patent protection (only attorneys who have passed a separate patent bar exam are qualified to work with patents). If the product does not qualify for patent protection, find other ways to make your product stand out, including through strong trademark branding and enforcement.

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What are some of the common reasons why business owners don't move forward to protect their intellectual property?

If you've ever developed a new product or formulated a new business idea, you've most likely grappled with the question of whether you should to protect it legally in some way.  It can be a confusing issue, for sure, and many of the small business owners and entrepreneurs I meet don't seem to have a solid grasp of how, why and when to protect their products, or if it's even necessary.

There are a many reasons people hesitate to make intellectual property protection a priority when they are just starting a new business. They include:

1. It is another startup cost, one which is sometimes viewed as “non-essential,” simply because it is not legally required to operate the business.

2. They are unsure whether the business or product will “take off,” so they think they might not even need it.

3. They don’t anticipate anyone attempting to copy them.

4. They do not know what types of protections may be available for their products or brands.

5. They seek to keep costs down by utilizing free or inexpensive online resources.

Protecting intellectual property correctly is not simple, and many times the examining attorneys at the government agencies have questions or raise unexpected issues on the applications. That is why professional help is so important. It can be costly or limiting in the long run to skip these steps.

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How can business owners know when to protect an idea?

If you've ever developed a new product or formulated a new business idea, you've most likely grappled with the question of whether you should to protect it legally in some way.  It can be a confusing issue, for sure, and many of the small business owners and entrepreneurs I meet don't seem to have a solid grasp of how, why and when to protect their products, or if it's even necessary.

As soon as you start taking steps to implement a business or product idea, such as incorporating, obtaining state or federal licenses, or securing production of a product, you should identify which aspects of your business and products are protectable by trademark, copyright, patent, or trade secret. Each of these types of intellectual property requires different procedures to protect them from unfair competition and copycats, which is why it is important to consult a professional. You or your attorney will need to research whether anyone else already has exclusive rights to the brand names or products you want to develop. A conflict search should include a thorough search of the U.S. Patent & Trademark Office’s (“USPTO”) searchable database, or for copyrights, the U.S. Copyright Office’s searchable public catalog.

You should also search your state’s registries, if they have them. For instance, Florida has a searchable online trademark registry, but for California state trademarks, you must call the office of the California Secretary of State and ask them to conduct a search via phone. A thorough search must also include the internet and social media, for potentially competing uses that started before you. Even if they are not registered, they could still have certain rights that supersede yours.

Source: Forber

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Should I trademark nationally or internationally if I will be taking clients worldwide?

Trademarks are intangible assets, and can be bought, sold or licensed, making your company more valuable Trademark establishes a link between enterprise and customer.  A strong trademark will attract customers to use goods or services.

Do you have to buy trademark in all countries? 

What's the best way to register an international trademark?

However, you have to analyze your company to determine the value in seeking trademark protection in foreign countries. An experienced intellectual property (IP) attorney is the best person to speak to regarding this decision. There is a mechanism for obtaining a trademark in other countries: the  Madrid Protocol

 International Trademark Registration Under Madrid Protocol/ Agreement

To sum it up, you should first file for a trademark in your home country. From there, your country will forward it to WIPO. After WIPO examines it, and hopefully approve it, it will send you a certificate of your international registration and notify the IP Offices in all the territories where you seek trademark protection in. The last step is for those territories to make a decision within the time limit (12 or 18 months) in accordance with their own rules. WIPO will record the decisions of the IP Offices in the International Register and notify you when they are made. If a particular Office refuses to grant protection, you can contest a refusal decision directly before it. Conversely, if an IP Office accepts to protect your mark, it will issue a statement of grant of protection.

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What is the difference between trademark and a brand name?

As you maneuver through the world of Intellectual Property, you’ll see that there are certain terms that are discussed frequently. So often, people assume that brand and trademark are the same things. While they are certainly connected, there are factors that distinguish between the two.

 Registertrademark in Vietnam

The easiest way to explain is that a brand is a reputation that is developed over time. The marketplace can easily identify the brand based on the products and services as well as the image that the company creates. When you think of “brand” the terms that you should associate with it are:

Culture

Personality

Vision

Reputation

A brand should answer the question, “What is the company all about?” The brand name is simply how the company chooses to be identified and how the Vị trí

marketplace distinguishes it from its competitors.

In comparison, a trademark is what protects the brand. Namely, the protection is given to specific images that are associated with the brand. This may include:

Packaging

Symbols

Brand name

Color scheme

Essentially, a trademark will offer legal protection so that competitors can’t use the same features that may confuse the consumer

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Incorporation of CPTPP Agreement Relating to Origin Rules into Vietnam Laws

The CPTPP Agreement took effect in Vietnam as of January 14^th, 2019 including 11 founding countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand, Peru and Vietnam. On January 22^nd, 2019, the Vietnam Ministry of Industry and Trade issued Circular No. 03/2019/TT-BCT (Circular 03) regulating rules of origin of goods in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to incorporate and implement the commitments of CPTPP.  These rules are important for investors whom are transitioning their factories and manufacturing sites from neighboring counties to Vietnam and set up company to obtain the certificate of origin from Vietnam.  However, the understanding of regulations of the circular and relating laws requires the consultation of international trade lawyers in Vietnam for application in particular cases.

Certificate of Origin Lawyer in Vietnam

Goods are treated as an originating goods if meeting the following requirements:

-Wholly obtained or produced entirely in the territory of one or more of the Member States;

-Produced entirely from materials originating in the territory of one or more of the Member States; or

-Produced entirely in the territory of one or more of the Member States using non-originating materials provided that the goods satisfy all applicable requirements of Annex I attached to the Circular 03.

Moreover, CPTPP Agreement stipulates the origin rule for the Remanufactured Good and Sets of Goods, regulated in Article 7 and Article 20 of Circular 03 respectively.

-Regarding the Sets of Goods, the set is treated as originating if the value of all the non-originating goods in the set does not exceed 10% of the value of the set.

-Regarding the Remanufactured Good, Remanufactured Good are committed to treat as new goods at the same type. CPTPP also has very flexible rules regarding rules of origin for these Good: a recovered material derived in the territory of one or more of the Member States is treated as originating when it is used in the production of, and incorporated into, a Remanufactured Good.

Both CPTPP Agreement and Circular 03 (Article 14) also provide De Minimis regulations, which means that a goods that contains non-originating materials that do not satisfy the applicable change in tariff classification requirement for the good is nonetheless an originating good if the value of all those materials does not exceed 10% of the value of the goods.

In addition to Build-up Method and Build-down Method for calculating Regional Value Content (RVC) based on the value of originating and non-originating materials respectively, CPTPP also stipules Focused Value Method based on the value of specified non- originating materials and Net Cost Method for automotive goods only.

Relating to C/O granting, Vietnam shall use the mechanism of certification by competent authority for goods exported to other Member States. The time for implement the mechanism of self-certification of goods origin by exporters is carried out from 5 to 10 years under the guidance of the Ministry of Industry and Trade. The mechanism of Vietnamese importers self-certifying their origin is implemented after 5 years from the effective date of CPTPP. The procedures of certification and inspection of goods origin shall comply with the provisions of Decree No. 31/2018/ND-CP dated on March 8^th, 2018 of the Government detailing the Law on Foreign Trade Management on goods origin and other related documents.

Lawyers at International Trade and Taxes practice of ANT Lawyers always follow the changes in law to update client for decision making process in investing and optimizing operations in Vietnam.

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What are the steps to get a patent?

The best way to file a patent application is to be well prepared for your meeting with a patent attorney or agent who will prepare and file the patent application. Here are the steps that a savvy inventor takes prior to meeting with their patent attorney or agent:

 Register patent in Vietnam

1.Pull together a list of names, residence addresses and citizenships for everyone who contributed to the technology being protected. If you are incorporated, or other business entity filing your first application, gather the legal company name, state of incorporation and official address.

2.Pull together a list of any disclosures of the invention made to others. These can include offers to sell, license or commercialize the invention, papers that you and/or your colleagues published, web site or social media postings, and so forth. This will enable your patent attorney or agent to determine a date by which he/she must file your patent application.

3.Prepare a description of your invention, including a breakdown of the device or code module into functional pieces. Describe each piece and how it relates to the whole. This will enable your patent attorney or agent to prepare a specification portion of your patent application. The legal standard provided under the US patent law is that the specification must be complete enough to enable a person skilled in the relevant art, but not familiar with your invention, to build a working unit. So, the more detail you include, the better the final product will be and the quicker the turn around time by your patent attorney or agent, saving them time and you money.

4.Supplement the description above with figures. Flow charts, block diagrams, system diagrams, data flow diagrams, and so forth are all welcome. Hand drawn will work, but drawing files made using a CAD program, Microsoft Visio, Corel Draw or other drawing program usually can be used by the attorney or agent, saving them time of re-drawing the figures with one of these programs, which will save you money.

5.Make a list of at least three features or elements that your invention has or is able to do that are not provided by any known competitors. Also, include an advantage for each feature or element. This will enable your patent attorney or agent to prepare a claim set for your patent application. Good claims include enough detail about features and elements not found elsewhere to pass examination at the patent office.

6.You don’t need to search competitors’ systems, but to the extent you know of them, make a list of these as well. If there are published papers, articles, etc. in the technology area that describe approaches taken prior to your invention, bring these as well. This will enable your patent attorney or agent to prepare an Information Disclosure Statement for your patent application, which will satisfy his and your duty to disclose any known information relevant to patentability to the patent office.

What did you leanr from applying for a patent?

Now you are ready to meet with your patent attorney or agent. Bring items 1 - 6 above with you to the meeting. Schedule at least an hour and perhaps as much as two to go over the details with the patent attorney or agent. At the end of the meeting you and the patent attorney or agent should be able to arrive at an agreed protection strategy, a prototype claim, an estimated budget for the project and an anticipated date for completion.

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