From Europe to Vietnam – safeguarding IP in local partnerships

Vietnam has recently emerged as a thriving economy with significant development potential. According to the Bank for Investment and Development of Vietnam (BIDV), Vietnam’s GDP growth is forecasted to reach 7.5% under normal conditions and even 8% under favourable conditions in 2025.[1] European businesses are showing optimism about Vietnam’s economic prospects, viewing it as a potential investment destination and attempting to increase their presence locally. Many foreign companies are seeking to enlarge their operations in Vietnam via partnerships with local suppliers or service providers.[2]

A partnership often involves changes in business plans and key resource allocation - including financial, human, technological, and data resources - which could, in turn, impact the company’s assets and interests. By assets, we refer to anything of value owned or controlled by a company that contributes to its economic benefits. Among these, intellectual property (IP) assets, also known as intangible assets, are particularly critical, encompassing rights such as trademarks, patents, copyright, industrial designs, trade secrets, and geographical indications, of which protection plays a vital role when entering new commercial partnerships with local partners.

In this article, we will discuss practical solutions to some of the most common IP challenges faced by European businesses, especially European SMEs, startups, and entrepreneurs, when entering a partnership in Vietnam.

1. Preliminary Steps: Assessing the Partnership and the IP Assets

   For a partnership, it is essential to assess all relevant IP assets, including those brought in by each party before the collaboration and those created during it, and the status of assets once the collaboration is finished.

   1. Conduct an IP Audit

      One of the first steps in auditing your IP assets is to identify all those which may be involved in the partnership. These notably include trademarks, patents, industrial designs, trade secrets, and copyright. This process ensures you have an overview of all valuable assets in your business, therefore creating an efficient plan for safeguarding them.

   2. Evaluate the value of your IP assets and the related risks 

      Once identified, these assets should be assessed to define their commercial value to maximise their potential and identify opportunities for IP commercialisation (i.e. licensing, franchising, or technology transfer). Besides, EU SMEs should evaluate potential risks and vulnerabilities associated with these assets, particularly in the context of any new partnership or collaboration.

   3. Understand Vietnam’s legal landscape - Know the local rules

      Vietnam’s IP legal framework, with the adoption of the IP strategy until 2030, is forecasted to see significant development, fostering innovation and creativity, thereby strengthening IP protection, a crucial factor in the socio-economic growth of the developing country.[3] However, IP legislation and practice within Vietnam differ from those in Europe. Here are two key examples:

      - In Vietnam, one cannot rely on non-registered industrial design as design protection requires formal registration (unlike in the EU, where this right can be protected even when not registered).

      - Unlike EU countries, which already have IP specialised courts, Vietnam has not yet established a specialised court for IP disputes (recent progress was made, and IP courts should be operational in the final quarter of 2025[4]).

      To be well prepared to adapt to the local market and avoid future issues, EU SMEs should familiarise themselves with the country’s specificities and legal landscape (e.g. IP Law, Technology Transfer Law, etc.).

2. Involve Local Legal Experts

   Given that (i) businesses without a legal residence or headquarters in Vietnam are required to work with a registered IP lawyer in the country and (ii) all procedures will be conducted in Vietnamese, it is highly recommended that you work with Vietnamese IP law firms to ensure compliance with local IP law, regulations and smooth navigation among practical rules and procedures. By consulting with local legal experts, they will help you tailor an IP strategy that aligns with the business goals and commercial partnership objectives, plus complies with local practice. Please refer to the network of external IP experts covering ASEAN, as some are familiar with Vietnam's local IP practice, and contact them to receive different quotations or options.

    

3. Protection Mechanisms for your IP in Commercial Partnerships

   1. Main IP rights (trademark, industrial design, and patent registration)

      Without securing registration of your IP rights (IPR) in Vietnam, enforcing them in the country will not be possible. Therefore, you should register your IPR as soon as possible with the IP Office to establish exclusive rights. You can consider filing direct applications to the Vietnam IP Office (IP Vietnam) or filing for international protection via the corresponding international systems i.e. the Madrid system for trademark or the PCT for patent, or the Hague system for industrial design. This should also be aligned with marketing/communication and business strategies to ensure cost efficiency, prevent disclosure that could affect patentability, and secure IPR before advertising your brand or publicising your product. 

   2. Non-registered right - trade secret protection, and contractual measures

      Besides registering your IPR, you can also consider trade secrets as a complementary protection measure for certain types of confidential business information. Unlike other IPR, trade secrets do not require registration or official fees but rely on maintaining secrecy. Trade secrets may cover business and commercial information, technical and scientific information, and even financial information. Most legislation requires the company to put confidentiality and secrecy mechanisms in place to prevent valuable information from being publicly disclosed, i.e. implement non-disclosure agreements (NDAs) before disclosing any of your confidential business information and set up internal guidelines to maintain secrecy and prevent unauthorised disclosure within your company.

   3. IP commercialisation-related agreements (technology transfer, franchising or licensing)

      When expanding your business abroad, there are always opportunities for licensing, franchising, or technology transfer with your partners.

      Under Vietnamese law, a technology transfer agreement (TTA) is a legal contract that regulates the transfer of the ownership or the right to use a technology, including a solution, process, or know-how, from one party (transferer) to another (transferee) for application in production, business, or commercialisation. It is important to include specific licensing terms, royalties, and usage restrictions clearly in the transfer agreement. To make sure all the necessary clauses and content are included in a TTA, it is recommended to have a look at the checklist provided by the corresponding law.[5] Besides, you should ensure that any technology transfer is formally documented and registered with the appropriate Vietnamese authorities, i.e. the state management agency in charge of science and technology, for your agreement to be fully effective.[6] In Vietnam, you will usually face some challenges due to lengthy and complex procedures regarding the drafting, registration and enforcement of a TTA. As a result, it is pivotal to require the support of a local lawyer or expert.

      Concerning technology franchising (a type of franchising in which the franchisor grants the franchisee the right to use its technology under conditions specified in a franchise agreement), EU SMEs should also ensure that technology or business processes franchised in Vietnam meet legal requirements, such as (i) the one-year operational requirement abroad[7] and (ii) the need to register the franchise agreement with the Ministry of Industry and Trade.

      While conducting a new partnership in Vietnam, trademark licensing can also be involved. Make sure you have a trademark right in Vietnam before entering any partnership, i.e. obtain a trademark registration in Vietnam for the trademark to be licensed and register licensing agreements with IP Vietnam to ensure its enforceability.[8]

4. Key contractual IP-related provisions in partnership agreements

   Besides the above, it is equally important to safeguard your assets through comprehensive contractual protection. To do so, the following key provisions should be incorporated into your partnership agreements:

   1. NDAs / confidentiality clauses: Protect sensitive information exchanged during the partnership discussions.
   2. IP clauses: Clearly outline the ownership of IP, including rights to improvements or developments made during the partnership.
   3. The contract should clearly mention the scope of use, duration, royalties, and penalties for misuse/ breach of the confidentiality agreement.
   4. Termination clauses: Define exit strategies and the handling of IP upon termination of the partnership.
   5. Non-compete clauses: Prevent local partners from using shared knowledge to develop competing products or technologies.
   6. Dispute resolution mechanisms: Specify clear dispute resolution processes, such as mediation or arbitration, and prefer international mechanisms using English.[9]

5. Partnership Considerations – during and after collaboration

   During the partnership, it is essential to regularly monitor the market to detect any potential infringement or misuse of your IP assets. If any sign of infringement occurs, do not hesitate to take necessary and timely legal action to enforce IPR with the support of your legal counsel. Besides this, reviewing partnership performance is also an indispensable step; this helps to evaluate how effectively the partnership contributes to protecting and enhancing your business assets. For example, when reviewing the partnership regularly, you can ensure that your local distributor/partner follows the IP protection protocols, or if they are actively monitoring and acting against counterfeits. Based on this assessment, European SMEs may revise agreements or protection mechanisms necessary to align with evolving business needs or regulatory changes.

   Ending the partnership does not mark the end of responsibilities, and the above important actions should still be taken to protect your assets and business.

Conclusion

To safely conclude and conduct a partnership, strategic planning and proactive legal measures should always be your priority. By equipping themselves with sufficient knowledge, expert support, and well-drafted agreements, SMEs can better protect their valuable IP assets and avoid unnecessary risks.

The below summary table of critical steps for protecting IP assets in Vietnam should help you to be more confident in the upcoming business journey.

[1] https://en.vietnamplus.vn/vietnams-gdp-growth-could-reach-8-in-2025-amid-challenges-bidv-experts-post308341.vnp

[2] https://en.vietnamplus.vn/european-businesses-confident-in-vietnams-economic-prospects-report-post307969.vnp

[3] https://www.most.gov.vn/en/Pages/Detailnews.aspx?IDNews=753&tieude=viet-nams-

[4] https://insightplus.bakermckenzie.com/bm/intellectual-property/vietnam-launching-of-ip-courts-in-sweeping-judicial-overhaul

[5] See the full list in Article 23. Contents of a TTA of Law on Technology Transfer 2017

[6] Article 24, Law on Technology Transfer 2017

[7] Decree 08/2018/ND-CP on Amendments to Certain Decrees Related to Business Conditions Under State Management of The Ministry of Industry and Trade amended by Decree 17/2020/ND-CP

[8] https://www.lexology.com/library/detail.aspx?g=a5c22793-31be-4458-8877-c890a368ec40&ut

[9] SMEs are recommended to explore the website and services offered by WIPO Arbitration and Mediation Center which has an office in Singapore: LINK