Joint Circular No. 39/2014/TTLT-BKHCN-BTC stipulates the valuation of scientific research results and technological development, intellectual property using state budget funds.

JOINT CIRCULAR

Regulations on Valuation of Scientific Research Results and Intellectual Property Utilizing State Budget development

Pursuant to the Law on Science and Technology No. 29/2013/QH13 dated June 18, 2013;

_____________________

Pursuant to Decree No. 08/2014/NĐ-CP dated January 27, 2014 of the Government guiding certain provisions of the Law on Science and Technology;

Pursuant to the Price Law number 11/2012/QH13 dated June 20, 2012;

The Minister of Science and Technology and the Minister of Finance issue this Joint Circular regulating the valuation of scientific research results and technological development, intellectual property utilizing state budget for the purpose of transferring ownership rights, usage rights, and profit distribution when using, transferring ownership rights, transferring usage rights, contributing capital with scientific research results and technological development, intellectual property utilizing state budget, except where required by law to be auctioned or tendered.

Pursuant to Decree No. 20/2013/NĐ-CP dated February 26, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Science and Technology;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

1. This Circular regulates the valuation of scientific research results and technological development, intellectual property utilizing state budget for the purpose of transferring ownership rights, usage rights, and profit distribution when using, transferring ownership rights, transferring usage rights, contributing capital with scientific research results and technological development, intellectual property utilizing state budget, except where required by law to be auctioned or tendered.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

2. The scientific research results and technological development, intellectual property utilizing state budget within the scope regulated by this Circular include:

a) Scientific research results and technological development utilizing state budget in the form of intangible assets, determined based on contracts for performing science and technology tasks, created from the use of state budget funds provided by competent authorities in the form of partial funding, full funding, or granting the right to use means, facilities - technical equipment under state ownership to perform science and technology tasks;

b) Intellectual property arising during the performance of science and technology tasks or developed from scientific research results and technological development utilizing state budget.

1. Representative of the state owner of scientific research results and technological development utilizing state budget (hereinafter referred to as the representative of the state owner).

Article 2. Applicability

This Circular applies to the following subjects:

2. Organization requesting the transfer of ownership rights, usage rights of scientific research results and technological development, intellectual property utilizing state budget (hereinafter referred to as the organization requesting the transfer of rights).

3. Organization granted ownership rights, usage rights of scientific research results and technological development, intellectual property utilizing state budget (hereinafter referred to as the organization granted rights).

4. Service organization supporting the valuation of scientific research results and technological development, intellectual property utilizing state budget (hereinafter referred to as the service organization supporting valuation) recognized by law.

5. Other organizations and individuals related to the valuation of scientific research results and technological development, intellectual property utilizing state budget.

Scientific research results and technological development utilizing state budget

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. are the outcomes of scientific research and technological development activities determined based on contracts for performing science and technology tasks, created from the use of state budget funds provided by competent authorities in the form of partial funding, full funding, or granting the right to use means, facilities - technical equipment under state ownership to perform science and technology tasks. Intellectual property

2. is an intangible asset, characterized by creativity, definability, controllability, and the ability to generate economic benefits for its owner. Intellectual property includes protected objects and unprotected objects according to the provisions of the Intellectual Property Law such as inventions, trade secrets, semiconductor integrated circuit layout designs, industrial designs, trademarks, trade names, plant varieties, computer programs, scientific works, innovations, animal breeds, technical designs.

Transfer price of scientific research results and technological development, intellectual property

3. is the amount of money that the transferee must pay to acquire ownership of the result or asset. Usage fee of scientific research results and technological development, intellectual property

4. is the amount of money that the transferee must pay to acquire usage rights of the result or asset. Transferor

5. is an organization or individual having ownership rights, transfer rights to perform transfers, transfer usage rights, contribute capital with scientific research results and technological development, intellectual property. is an organization or individual receiving the transfer of ownership rights, receiving the transfer of usage rights, receiving capital contributions with scientific research results and technological development, intellectual property.

6. Transferee Secondary transfer right

7. is the right to re-transfer the usage rights received to another organization or individual. is the right to transfer the assigned usage rights to another organization or individual.

Chapter II

PRICING

Article 4. Valuation Authority and Circumstances for Valuation

1. The representative of the State owner, organizations entrusted with the rights stipulated in Clause 1 and Clause 3, Article 2 of this Circular shall have the authority to value scientific research results and technological development outcomes, intellectual property using state budget funds in accordance with the provisions of the law.

2. The circumstances for valuation include:

a) The representative of the State owner values scientific research results and technological development outcomes, intellectual property when transferring ownership rights or usage rights of scientific research results and technological development outcomes;

b) Organizations entrusted with the right to conduct valuation of scientific research results and technological development outcomes, intellectual property to determine profits generated from the use of such scientific research results and technological development outcomes, intellectual property;

c) Organizations entrusted with ownership rights or usage rights accompanied by secondary transfer rights conduct valuation of scientific research results and technological development outcomes, intellectual property when transferring usage rights, transferring, contributing capital with scientific research results and technological development outcomes, intellectual property within the scope of the rights entrusted.

Article 5. Forms and Costs of Valuation

1. The representative of the State owner conducts valuation for the cases specified in Point a, Clause 2, Article 4 of this Circular according to one of the following forms:

a) Assigning tasks to subordinate units with functions to support valuation of scientific research results and technological development outcomes, intellectual property to propose prices;

b) Using valuation support services of organizations recognized by law for intellectual property valuation support services;

c) Establishing an Advisory Council on Rights Transfer to re-determine prices according to the regulations of the Ministry of Science and Technology on procedures and formalities for transferring ownership rights and usage rights of scientific research results and technological development outcomes using state budget funds in cases where the scientific research results and technological development outcomes, intellectual property to be valued have complex characteristics.

2. Organizations entrusted with the right to conduct valuation for the cases specified in Points b and c, Clause 2, Article 4 of this Circular according to one of the following forms:

a) Assigning tasks to subordinate units with functions to support valuation of scientific research results and technological development outcomes, intellectual property to propose prices;

b) Using services of organizations recognized by law for intellectual property valuation support services in cases where there is no unit specified in Point a of this Clause.

3. The representative of the State owner uses the state budget allocated for science and technology activities to pay for the costs of valuing scientific research results and technological development outcomes, intellectual property according to the forms prescribed in Clause 1 of this Article.

Public organizations entrusted with ownership rights and usage rights of scientific research results and technological development outcomes, intellectual property use operating expenses to pay for the costs of valuing scientific research results and technological development outcomes, intellectual property according to the forms prescribed in Clause 2 of this Article.

For non-public organizations entrusted with ownership rights and usage rights of scientific research results and technological development outcomes, intellectual property, the costs of valuing scientific research results and technological development outcomes, intellectual property are allocated to business expenses in accordance with the regulations of the law on accounting and corporate income tax.

Article 6. Steps for Valuation

The valuation of scientific research and technological development outcomes and intellectual property shall be carried out according to the following steps:

1. Determining the value of scientific research and technological development outcomes and intellectual property to be valued:

a) Identifying the scientific research and technological development outcomes and intellectual property to be valued (legal, economic, technical characteristics and other features);

b) Determining the purpose, object of use, proposed price, time of determining the value, basis of value, process of conducting the valuation work of scientific research and technological development outcomes and intellectual property (in accordance with the provisions of the Vietnam Valuation Standards System);

c) Selecting an approach and method of valuing scientific research and technological development outcomes and intellectual property in accordance with the provisions from Article 10 to Article 12 of this Circular;

d) Conducting investigations, surveys, collecting relevant information and data (for example: information on transactions of asset sales on the market, costs and income generated from applying scientific research and technological development outcomes and intellectual property to be valued or similar assets);

đ) Analyzing and processing information and data;

e) Determining the value of scientific research and technological development outcomes and intellectual property according to the selected method.

2. Preparing a Report proposing the price or a Report on the results of the valuation of scientific research and technological development outcomes and intellectual property in accordance with the provisions of Article 13 of this Circular.

3. Negotiating the price (if applicable) for scientific research and technological development outcomes and intellectual property:

Based on the information stipulated in Articles 7, 8, and 9 of this Circular and based on the proposed price, representatives of state owners negotiate the price with organizations requesting the transfer of rights or organizations authorized to negotiate prices with the transferees.

4. Deciding the price of scientific research and technological development outcomes and intellectual property:

Based on the results of implementing the steps prescribed in Clause 1, Clause 2, and Clause 3 of this Article and the information stipulated in Articles 7, 8, and 9 of this Circular, competent authorities and organizations decide the price of scientific research and technological development outcomes and intellectual property.

Article 7. Basis for Deciding the Price to Transfer Ownership and Usage Rights of Scientific Research and Technological Development Outcomes and Intellectual Property

1. Scope of transferring rights: transferring full ownership, transferring part of ownership, transferring full usage rights, or transferring part of usage rights.

2. Technical characteristics of scientific research and technological development outcomes and intellectual property, for example: utility, purpose of use, function, expected technical effectiveness of scientific research and technological development outcomes and intellectual property.

3. Legal characteristics of scientific research and technological development outcomes and intellectual property, for example: necessity and possibility of registering protection for scientific research and technological development outcomes and intellectual property; status and scope of protection for scientific research and technological development outcomes and intellectual property.

4. Economic characteristics of scientific research and technological development outcomes and intellectual property, for example:

a) Expected profit level generated from using scientific research and technological development outcomes and intellectual property;

b) Scientific research and technological development outcomes and intellectual property capable of substituting on the market;

c) Novelty and usefulness of scientific research and technological development outcomes and intellectual property compared to other scientific research and technological development outcomes and intellectual property with the same function.

5. Market transaction prices of some scientific research and technological development outcomes and intellectual property compared domestically and internationally and values in transactions already conducted for scientific research and technological development outcomes and intellectual property to be valued (if available).

6. State budget investment funds to create scientific research and technological development outcomes and intellectual property.

7. Policies encouraging commercialization of scientific research and technological development outcomes and intellectual property to develop the science and technology market, science and technology enterprises, and other preferential policies recorded in the Law on Science and Technology, the Law on Technology Transfer, the Law on Intellectual Property, and guiding documents.

Article 8. Basis for determining the price for use, transfer of rights to use, transfer, and contribution of capital

In cases where valuation serves the purpose of using, transferring, or transferring rights to use scientific research and technological development results and intellectual property, the valuation should be based on the grounds specified in Article 7 of this Circular and the following grounds:

1. Market advantages that scientific research and technological development results and intellectual property bring to the recipient of the transfer, for example:

a) The suitability and necessity of scientific research and technological development results and intellectual property to the needs of the recipient of the transfer;

b) Investment costs, time to recover capital, and the level of anticipated risks that the recipient of the transfer must bear in research, development, improvement, application, and commercialization of intellectual property;

c) Necessary conditions to exploit and apply scientific research and technological development results and intellectual property effectively;

d) The possibility of disputes, litigation, and anticipated costs to resolve disputes and litigation related to scientific research and technological development results and intellectual property;

2. Relationship between the transferring party and the recipient of the transfer of scientific research and technological development results and intellectual property, for example:

a) Whether the transferring party and the recipient of the transfer are exclusive or non-exclusive;

b) The payment capacity of the recipient of the transfer at the time of valuation;

c) The capability of the recipient of the transfer to use research results and intellectual property, for example: experience, human resource and technical infrastructure capabilities to exploit and commercialize scientific research and technological development results and intellectual property;

d) Transaction history between the transferring party and the recipient of the transfer;

3. Nature and scope of the transfer, for example:

a) Transfer or transfer of rights to use;

b) Exclusive or non-exclusive use of scientific research and technological development results and intellectual property;

c) Right to retransfer or not to retransfer rights to use research results to a third party;

d) Term of use;

đ) Field of use of scientific research and technological development results and intellectual property;

e) Right to improve and receive information about improvements to scientific research and technological development results and intellectual property;

g) Territorial scope for selling products created from transferred scientific research results, intellectual property, and technology;

h) Consulting services, technical support, training, warranty, and accompanying conditions and assets;

i) Contribution of each party to activities in establishing, maintaining, and exploiting scientific research and technological development results and intellectual property, for example: registration activities, maintenance, responsibility for protecting intellectual property rights over scientific research and technological development results and intellectual property; research, development, improvement, experimental production, industrial-scale production; marketing, distribution, commercialization of goods and services resulting from scientific research and technological development results and intellectual property;

k) Payment plan between the transferring party and the recipient of the transfer of scientific research and technological development results and intellectual property to ensure risk sharing.

Article 9. Basis for determining the price for certain objects of scientific research and technological development results, intellectual property

When determining the price of scientific research and technological development results, intellectual property, in addition to the bases prescribed in Articles 7 and 8 of this Circular, it is necessary to pay attention to examining special factors affecting the value of certain types of scientific research and technological development results, intellectual property as follows:

1. For inventions:

a) Protection status; scope of protection; remaining time within the protection period recorded in the protection certificate;

b) Risk factors that may occur during the use of the invention, such as: possibility of being invalidated, infringed; economic and technical difficulties and obstacles in applying, exploiting, commercializing.

2. For trade secrets:

a) Content, form of confidentiality measures; effectiveness of confidentiality measures applied to trade secrets up to the valuation date;

b) Risk of trade secrets being exposed and legally exploited when researched, reverse-engineered, decoded, or independently created by other organizations or individuals.

3. Special factors affecting the value of inventions and trade secrets are also considered and applied when valuing initiatives, integrated circuit layout designs, computer programs, new plant varieties, solutions, new technical processes, other intangible research and development results.

4. For industrial designs: Special factors to be considered are similar to those for inventions. At the same time, aesthetic features, differences in industrial design, and consumer appeal to products with such designs should be taken into account.

5. For trademarks, business names:

a) Time and scope of actual use of trademarks, business names in production and business activities;

b) Risk of trademarks, business names losing their distinguishing ability on the market due to becoming common names for products or services;

c) Potential for expanding the object and scope of use of trademarks, business names or transferring rights to use trademarks, business names, and franchise rights to partners;

d) Risk of trademark, business name rights being infringed.

Article 10. Valuation Method Based on Cost Approach

1. Cost approach methods are implemented according to the Intangible Asset Valuation Standard issued by the Ministry of Finance and specific guidance provided in this Article.

2. The costs of reproduction, replacement of scientific research and technological development results, intellectual property include the following expenses:

a) Costs for creating, identifying, developing scientific research and technological development results, intellectual property including: labor costs, raw materials, energy, equipment, testing, design, data construction, inventory, mapping, listing;

b) Costs for registering and establishing rights over intellectual property including: application fees, publication fees, content examination fees, issuance fees for protection certificates, registration fees, maintenance or extension fees for protection certificates; costs for registering circulation, submitting samples containing scientific research and technological development results, intellectual property;

c) Costs for protecting intellectual property including: costs for implementing confidentiality measures for technical know-how, costs for applying technical measures to counter infringement of intellectual property rights, administrative, civil, criminal procedure costs to resolve disputes and handle infringement of intellectual property rights.

3. Determining the depreciation value of scientific research and technological development results, intellectual property includes:

a) Functional and technological obsolescence depreciation: In cases where functional and technological obsolescence can be remedied, the depreciation value due to functional and technological obsolescence is determined based on the cost to remedy the functional and technological obsolescence of the scientific research and technological development results, intellectual property to be valued, for example: improvement costs for inventions, changes in industrial design costs. In cases where functional and technological obsolescence cannot be remedied, the depreciation value due to functional and technological obsolescence is determined based on the loss in value of the asset due to functional and technological obsolescence;

b) Economic obsolescence depreciation: is determined based on the reduction in the value of intellectual property assets due to direct external environmental impacts and market conditions compared to the time of creation of the intellectual property asset, for example: inflation rates increasing causing the actual value of scientific research and technological development results, intellectual property to decrease; government regulations limiting the use of products containing scientific research and technological development results, intellectual property leading to reduced supply of products resulting in decreased prices for scientific research and technological development results, intellectual property; society's payment capacity declining leading to reduced demand for products containing intellectual property resulting in decreased prices for scientific research and technological development results, intellectual property.

Article 11. Market Approach Valuation Method

1. Market approach valuation methods shall be implemented in accordance with the Asset Valuation Standard for Intangible Assets issued by the Ministry of Finance and the specific guidance provided in this Article.

2. The market price of comparable assets may include the following levels:

a) The transfer price in the contract transferring ownership of scientific research and technological development results and intellectual property assets registered with state management agencies or published on the market;

b) Market offer and bid prices;

c) Listed prices on trading floors;

d) Auction bid prices;

đ) Joint venture, joint stock, mortgage prices;

e) Actual purchase prices on the market;

g) Comparable asset prices in other forms of transactions on the market.

3. In cases where valuation is carried out in accordance with Point a, Clause 2, Article 4 of this Circular, two comparable assets traded on the market may be used.

Article 12. Income Approach Valuation Method

1. Income approach valuation methods shall be implemented in accordance with the Asset Valuation Standard for Intangible Assets issued by the Ministry of Finance and the specific guidance provided in this Article.

2. The user fee method

a) The usage fee for scientific research and technological development results and intellectual property assets is determined based on the actual usage fees recorded in the contract transferring the right to use such results and assets that need to be valued or comparable assets;

b) Usage fees include:

Advance usage fees, periodic usage fees (which can be determined based on the usage rate according to revenue, profit, unit product); taxes arising from the contract transferring the right to use for the recipient of the transfer; advertising, marketing costs, and other costs incurred by the recipient of the transfer;

3. The excess profit method

Excess profits are determined based on the difference in profits between using and not using the scientific research and technological development results and intellectual property assets that need to be valued.

4. The additional income method

Additional income is determined based on the difference in value between the total expected profits of the enterprise and the total profits obtained from using tangible assets, intangible assets, and other financial assets that are not the assets to be valued.

Article 13. Price Proposal Report, Appraisal Result Report

1. Units entrusted with the task of proposing prices as stipulated in Point a, Clause 1 and Point a, Clause 2, Article 5 and Intellectual Property Valuation Support Centers as stipulated in Point b, Clause 2, Article 14 of this Circular shall be responsible for preparing the Price Proposal Report for the competent authority to refer to as a basis for considering the pricing of scientific research and technological development results and intellectual property assets.

2. Appraisal enterprises shall be responsible for providing the Appraisal Result Report in accordance with the Vietnamese Appraisal Standards System for the competent authority to refer to as a basis for considering and deciding on the pricing of scientific research and technological development results and intellectual property assets.

3. The Price Proposal Report must truthfully and objectively reflect the process and results of proposing prices for scientific research and technological development results and intellectual property assets in accordance with Article 6 of this Circular and this Article (Price Proposal Report model attached as an appendix).

Article 14. Valuation Support Services

1. Organizations providing valuation support services for scientific research and technological development results and intellectual property assets funded by the state budget must comply with the provisions of this Circular and relevant laws, and may request customers to provide legal documents and information related to scientific research and technological development results and intellectual property assets.

2. Organizations providing valuation support services for scientific research and technological development results and intellectual property assets funded by the state budget recognized by law include:

a) Appraisal enterprises established and operating in accordance with the law on pricing;

b) Intellectual Property Valuation Support Centers established under Decree No. 08/2014/ND-CP dated January 27, 2014 of the Government detailing and guiding the implementation of certain provisions of the Law on Science and Technology and Decree No. 55/2012/ND-CP dated June 28, 2012 of the Government on the establishment, restructuring, dissolution of public service units and the conditions for establishing and operating intermediary organizations in the science and technology market; and must have at least one person holding a price appraiser license issued by the Ministry of Finance.

Chapter III

IMPLEMENTING PROVISIONS

Article 15. Effective Date

This Circular takes effect from February 4, 2015.

Article 16. Implementation Organization

1. The Department of Market Development and Science and Technology Enterprises - Ministry of Science and Technology and the Department of Price Management - Ministry of Finance are responsible for guiding and supervising the implementation of the joint circular's provisions on valuing scientific research and technological development results and intellectual property assets funded by the state budget.

2. During the implementation, if there are difficulties or obstacles, units and localities are requested to report to the Ministry of Science and Technology and the Ministry of Finance for study and appropriate amendments.

ANNEX

ON THE MODEL OF PRICE PROPOSAL REPORT
(Annexed to Joint Circular No. 39/2014/TTLT-BKHCN-BTC

For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.OF THE GOVERNMENT ON THE FUNCTIONS, TASKS, POWERS, AND ORGANIZATIONAL STRUCTURE OF THE STATE BANK OF VIETNAM; 17 the 12 2014 of the Minister of Science and Technology

and the Minister of Finance)

PRICE PROPOSAL REPORT

Respectfully submitted to: .......................................................¹

To appoint and issue judicial expert certificates to the persons named in the attached list.² at document number...on...regarding the request for valuation support for scientific research and intellectual property assets funded by the state budget.

I. ORGANIZATION OF THE PRICE PROPOSAL REPORT

1. Name of the unit:

……………………………………………………………………………

2. Type of organization:

Unit entrusted with the task of proposing prices

Intellectual Property Valuation Support Center³

3. Address:

……………………………………………………………………………

4. Phone number: ...Fax: ...

5. Email: ...

II. PURPOSE OF PROPOSING THE PRICE

Proposing the price to serve as a basis for valuation purposes …………………………………⁴when ………………………………… ⁵

III. OBJECTS NECESSARY FOR PRICE PROPOSAL

III. OBJECTS TO BE VALUED

……………………………………………………………………………

1. Name of research result/intellectual property asset:

……………………………………………………………………………

2. Legal status:

……………………………………………………………………………

2. Time of determination of value: …

3. Technical condition: …………………………………………………

1. Location of valuation: ………………………………………………

2. Time of valuation:

……………………………………………………………………………

3. Information about comparable assets (if any):

……………………………………………………………………………

……………………………………………………………………………

4. Information about field survey (if any):

5. Approach and method of valuation:

………………………………………………………………………⁶

- The selected approach and method are:

- The steps and contents of determining the price of research results and intellectual property assets are described in the calculation appendix attached to this report.

……………………………………………………………………………

6. Valuation results:

……………………………………………………………………………

7. Limitations and conditions of the proposed price:

……………………………………………………………………………

¹ 8. Conclusion on the proposed price:

² 8. Conclusion on the proposed price:

³ The unit specified in Point b Clause 2 Article 14 of this Joint Circular

⁴ State the research outcomes and intellectual property that need to be appraised

5 Select one of the following purposes: transfer ownership rights; grant usage rights; use; transfer usage rights; transfer ownership rights; contribute capital

⁶ Describe clearly which approach and method will be used to determine the value of the research outcomes/intellectual property and the reasons for choosing such an approach and method