Technology Transfer (TT) is one of the most important channels for circulating technology and technological advancements across the world. TT can also be understood as the “purchase and sale” of technology on the basis of a TT contract, whereby the seller transfers the consolidated knowledge of his or her technology, together with machinery, equipment, technical assistance or training, and the purchaser shall make payment accordingly to the seller.

TT has been growing in Vietnam largely as a consequence of the rapid expansion of demand in the worldwide knowledge economy. Indeed, technology transfers have affected not only the technical aspects but also in commercial realities of the entire economy.

With their far-reaching effect, TT transactions have been addressed in several pieces of legislations since the 1990s, including the Civil Code, and the IP Law, and most recently in the Law on TT.

  • Components of a transferable technology

The components of a transferable technology include:

  • Technical know-how;
  • Technological information and knowledge whether in the form of technological plans, technological processes, technical solutions, formulae, technical specifications, drawings, technical maps, computer programs and information files; and
  • Technological solutions for production optimization and for renovation of technology.

Technology can embody one, two or all of the three components, and there is no requirement on transferring all these typical components at once under a given TT contract.

As an interrelated-matter, intellectual property rights (“IPRs”) often involve a TT contract, with licensing IPRs often forming an integral part of the TT contract.

  • Contractual arrangements for technology transfer

Transfer of a technology can be made via the following contractual forms:

  • A TT contract.
  • Investment-related contractual arrangements where technology transfer forms an integral part.
  • Other types of contracts, of which TT also constitutes an integral part, including: a franchising contract; an IPR licensing contract; and a“purchase and sale” contract for machinery or equipment.