Vietnam IPR Protection for EU SMEs related to Smart City Solutions

Intellectual Property Rights Protection for EU SMEs related to Smart City Solutions

With the rapid development of Vietnam’s cities has come a growing urban integration of information systems. This enhances the city’s efficiency as well as the quality of life of its citizens for many crucial metropolitan features such as mobility, healthcare, waste management, energy, or water-access[1]. Online interconnected systems and a reliance on Information and Communication Technologies (ICT) features play a key role in these advancements[2]. The province of Binh Duong, for instance, has started cooperating with the Vietnam Post and Telecommunications Group to develop the necessary ICT infrastructure with local government agencies.
The importance of intellectual property rights (IPR) protection in such context then becomes apparent. By combining a growing demand for high-tech solutions to tackle urban challenges with a tech-savvy population, Vietnam’s cities provide plenty of opportunities for European SMEs to expand their businesses. Yet European SMEs dealing with smart solutions should be mindful of possible IPR risks at hand. They often provide highly innovative niche solutions, but for many urban problems, a solution can only be made successful through a combination of interdependent technologies. In effect, European SMEs may need to expose their innovations to third parties on a regular basis, thus increasing the risks of IP infringement if proper measures are not taken in advance, says Valentina Salmoiraghi, IP Business Advisor.
Therefore, having a comprehensive IP strategy in place should be at the forefront of any SMEs approach to smart city solutions in Vietnam. At the same time, this brings yet another question to the forefront: the choice of patents filings vs. trade secrets protection for an innovative technology. Both of these will be outlined in this article given that they provide viable options for different reasons and needs.

Patents: a solid choice

Patents are intangible assets which can boost a business’ competitiveness in the global economy. Once the patent has been granted, the right holder, as patent owner, will get the right to prevent others from making, using, importing or selling their invention without explicit consent. Patents can be obtained for any product or process that provides a new technical solution to urban challenges (as well as new production methods), the composition of a new product or technical improvements. The requirement of novelty versus existing or disclosed technology is crucial to affirm patentability.
In relation to avenues to obtain patents in Vietnam, the distinction between invention patents and utility solution patents should be noted. For a new invention or technology to be deemed patentable under an Invention Patent, it needs to meet three requirements. Firstly, it must be novel – meaning that it has not been publicly disclosed inside or outside Vietnam (including Europe) before the date of filing. Secondly, it must involve an inventive step, meaning that the invention or improvement must not be obvious to professionals in the relevant industry. Finally, it must be industrially applicable: if mass production of the product or repeat application of the inventive process are possible through the patented technology.
Utility solution patents are not required to meet the inventive step, as novelty and industrial applicability will suffice for the patent to be granted. However, this comes with an important difference: while invention patent protection lasts for 20 years from the date of filing, utility solution patents only last for 10 years. In both cases, a patent in Vietnam is not renewable. Utility solution patents are often suitable for smart cities solutions due to the quickest time needed to be obtained and the less inventive steps required.
The most important point to take into consideration is that Vietnam follows a ‘first-to-file system’. This means that the first person to file a particular patent in Vietnam will own the right to it once this patent has been granted, regardless of the author of the invention. Therefore, European SMEs should make IP registration a core component of their IP strategy abroad.

How to keep your Trade Secrets

Once a patent is granted, the invention or technology is protected, while it simultaneously becomes publicly available to access as the period of ‘monopoly’ of the patent is granted in exchange of disclosure. This means that competitors could develop a similar invention by using reverse engineering. Keeping the information as a trade secret would help to avoid this.
Trade secrets are defined under Vietnamese law as any “information obtained from financial or intellectual investment activities, which has not been disclosed and is applicable in business”. This means that any innovation dealing with smart city solutions can be protected as a trade secret if 1) it has not been made available to the general public; 2) it provides its owner with a business and economic advantage; and 3) secrecy remains through necessary measures taken by the owner to protect the confidentiality of the information.
Protecting an invention as a trade secret does not require any registration, but instead requires businesses to take reasonable measures to prevent third parties from accessing it. Therefore, in theory, protection can last indefinitely as long as the secret is kept. Trade secrets should be the preferred option if reverse engineering is extremely difficult and if the company has taken steps to maintain secrecy over confidential information, for instance through physical and contractual measures with employees, consultants, partners and third parties.
When a device’s structure, function or operation reveals the technological foundations of how this device operates, patenting should be the preferred option. However, if the technology has a relatively short life-cycle, or does not meet the requirements for patentability, protecting the invention as trade secret shall be considered.  

Do not forget Trade Marks

Trade marks refer to any signs owned by a company through which consumers can identify and differentiate your product and its authenticity. Therefore, protecting trade marks contributes to EU SMEs brand recognition and trust– as well as being an important marketing tool. In order to protect your trade mark in Vietnam, a registration in the country is necessary. Only after an application is approved EU SMEs will become the sole right-owner of the registered trade marks. It is important to take this step as early as when the company is considering to enter the Vietnamese market because the ‘first-to-file’ system applies to trade marks. 

Key Take-Away

While smart city solutions offer plenty of opportunities for innovative European SMEs, IPR protection should be a top priority for any sustainable business expansion in Vietnam. Acquiring patents will play an important role in protecting innovations, as they will give the patent owner the explicit right to use, import, sell or otherwise develop this invention once the patent is granted. For SMEs who do not want to publicly disclose valuable information, trade secrets could prove to be a useful and potentially crucial alternative. Also, do not forget that protecting trade marks is also an important step to strengthen the company’s strategy in Vietnam. For more information on IP rights protection in Vietnam, please see the Guides and the Vietnam IP Factsheet of the South-East Asia IPR SME Helpdesk available on the website.
South East Asia IPR Helpdesk Team
 

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@southeastasia-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.
The South-East Asia IPR SME Helpdesk is co-funded by the European Union.
To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.

[1] Singh, Sarwant, 2014, Smart Cities — A $1.5 Trillion Market Opportunity, Forbes

[2] PWC, 2015, Smart Cities in South-East Asia, p. 7 – 8.