Legal protection for trade secrets

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 Viet Nam?

A trade secret is any valuable commercial information not generally known or readily attainable by the public that provides the trade secret's owner with a competitive edge. Such information is protected by the owner by necessary means to prevent it form being disclosed and easily obtained, and to prevent infringement of the owner's legitimate rights.

Misappropriation

Misappropriation involves:

Access or collection of information deemed ‘trade secret' by circumventing 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, cheating or abuse of trust by a person with an obligation to maintain confidentiality with the intent 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;

Infringement of trade secrets happens when anti-theft measures taken by State bodies are circumvented, or when such information is used for business purposes or for the purpose of applying for a business-related permit or a permit to distribute products.

Penalties for misappropriation

Any instances of conduct outlined above are punishable by fines ranging from VND5 million to VND10 million ($238.1-476.2).

Any person or persons having engaged in the acts described below will face fines ranging from VND10 million to VND20 million ($476.2-952.4):

– 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 above-mentioned 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.

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

– 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 by competitors;

– Divide the company into separate departments;

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