Law on Technology Transfer No. 80/2006/QH11

LAW

Technology Transfer

Based on the Constitution of the Socialist Republic of Vietnam in 1992, amended and supplemented by Resolution No. 51/2001/QH10 dated December 25, 2001 of the Tenth National Assembly, tenth session;

This Law regulates technology transfer activities.

PART I

GENERAL PROVISIONS

Article 1. Scope of application

This Law regulates technology transfer activities within Vietnam, from Vietnam to foreign countries, from foreign countries to Vietnam; rights and obligations of organizations and individuals participating in technology transfer activities; the authority of state management agencies; measures to encourage and promote technology transfer activities.

Article 2. Applicability

This Law applies to Vietnamese organizations and individuals, overseas Vietnamese, foreign organizations and individuals participating in technology transfer activities.

Article 3. Definitions

In this Law, the following terms shall be understood as follows:

1. Technical Secret is information accumulated and discovered during research, production, and business operations of the technology owner that has a decisive impact on the quality and competitiveness of the technology and technological products.

2. Technology A technology is a solution, process, technical secret accompanied or not accompanied by tools, means used to transform resources into products.

3. High-Tech is technology with a high level of scientific research and technological development; creating products and services with high quality and added value; having the ability to form new or modernize existing production and service industries.

4. New Technology are technology created for the first time in Vietnam.

5. Advanced Technology is leading technology with a higher technological level than current similar technology.

6. Technology Incubation Center, Business Incubation Center for Technology Enterprises is a place with favorable conditions regarding infrastructure and provision of necessary services to incubate technology and business incubation for technology enterprises.

7. Technology Market, Technology Fair, Technology Exhibition, Technology Trading Center is a place for displaying, introducing, buying and selling technology, promoting technology transfer, and providing other technology transfer services.

8. Technology Transfer is the transfer of ownership or usage rights of part or all of the technology from the transferring party to the receiving party.

9. Technology Transfer within Vietnam is the transfer of technology between organizations and individuals operating within the territory of Vietnam.

10. Technology Transfer from Foreign Countries to Vietnam is the transfer of technology by organizations and individuals operating in foreign countries to organizations and individuals operating within the territory of Vietnam.

11. Technology Transfer from Vietnam to Foreign Countries is the transfer of technology by organizations and individuals operating within the territory of Vietnam to organizations and individuals operating in foreign countries.

12. Technology Transfer Services are activities supporting the process of searching for, concluding, and implementing technology transfer contracts.

13. Technology Evaluation is the activity of determining the level, value, economic efficiency, and socio-economic and environmental impacts of technology.

14. Technology Valuation is the activity of determining the price of technology.

15. Technology Inspection is the activity of checking and determining the criteria of transferred technology against the criteria specified in the technology transfer contract.

16. Technology Transfer Activities include technology transfer and technology transfer services.

17. Technology Transfer Brokerage is the activity of supporting the technology owner and the technology seeker in finding partners to sign technology transfer contracts.

18. Technology Transfer Consulting is the activity of supporting parties in selecting technology, negotiating, signing, and implementing technology transfer contracts.

19. Technology incubation is the activity of supporting the creation and improvement of prospective practical and commercializable technology from technological ideas or scientific research and technological development results.

20. Technology Enterprise Incubation is the activity of supporting organizations and individuals in perfecting technology, raising investment capital, organizing production and business, marketing, completing legal procedures, and other necessary services to establish a technology enterprise using newly created technology.

21. Promotion of Technology Transfer is the activity of promoting and seeking opportunities for technology transfer; providing advertising, display, introduction of technology services; organizing technology markets, fairs, exhibitions, trading centers.

Article 4. Application of laws

1. Technology transfer activities must comply with the provisions of this Law and other laws; in cases where special technology transfer activities are regulated by other laws, the provisions of those laws shall apply.

2. In cases where international treaties to which the Socialist Republic of Vietnam is a member have different provisions from those of this Law, the provisions of such international treaties shall apply.

3. In cases where technology transfer activities involve foreign elements, the parties may agree in the contract to apply foreign law and international trade customs if such foreign law and international trade customs do not conflict with the fundamental principles of Vietnamese law.

Article 5. State Policy on Technology Transfer Activities

1. Ensuring the rights and legitimate interests, creating favorable conditions for organizations and individuals engaged in technology transfer activities to serve the rapid and sustainable development needs of the country's economy and society.

2. Prioritizing the development of high-tech and advanced technology; developing synchronized human resources for technology with investment in technological innovation.

3. Vigorously developing the technology market; encouraging and promoting technology incubation and technology enterprise incubation activities; intensifying the transfer of research results into production and business.

4. Paying attention to improving the quality and effectiveness of technology transfer activities in rural and mountainous areas; encouraging and creating favorable conditions for technology transfer activities in economically disadvantaged areas and extremely disadvantaged areas.

5. Enhancing the effectiveness of international cooperation and creating favorable conditions for organizations and individuals to cooperate internationally in technology transfer activities.

Article 6. Contents of State Management over Technology Transfer Activities

1. Issuing, implementing, and disseminating and educating the law on technology transfer.

2. Develop and direct the implementation of strategies, plans, programs, measures, mechanisms, and policies to promote technology transfer and technological innovation activities.

3. Uniformly manage technology transfer activities.

4. International cooperation on technology transfer activities.

5. Inspect and supervise compliance with laws on technology transfer; handle complaints and accusations, and address violations of laws on technology transfer.

Article 7. Object of Technology Transfer

1. The object of technology transfer is part or all of the following technologies:

a) Technical secrets;

b) Technical knowledge about transferred technology in the form of technical solutions, production processes, technical procedures, formulas, technical parameters, drawings, technical diagrams, computer programs, data information;

c) Rationalization solutions for production, technological innovation.

2. The object of technology transfer may be attached or not attached to industrial property objects.

Article 8. Right to Transfer Technology

1. The owner of the technology has the right to transfer ownership and usage rights of the technology.

2. Organizations and individuals permitted by the technology owner to transfer usage rights have the right to transfer such usage rights.

3. Organizations and individuals possessing technology that is an object of industrial property but whose protection period has expired or is not protected in Vietnam have the right to transfer usage rights of such technology.

Article 9. Encouraged Technology Transfer

Encouraged technology transfer includes high-tech and advanced technology meeting one of the following requirements:

1. Creating new products with high competitiveness;

2. Creating new industries or services;

3. Saving energy and raw materials;

4. Utilizing new energy and renewable energy;

5. Protecting human health;

6. Preventing and controlling natural disasters and epidemics;

7. Clean production, environmentally friendly production;

8. Developing traditional trades and crafts.

Article 10. Restricted Technology Transfer

Restricting the transfer of certain technologies for the following purposes:

1. Protecting national interests;

2. Protecting human health;

3. Protecting national cultural values;

4. Protecting animals, plants, resources, and the environment;

5. Implementing provisions of international treaties to which the Socialist Republic of Vietnam is a member.

Article 11. Prohibited Technology Transfer

1. Technology that does not comply with labor safety, occupational health, and environmental protection laws.

2. Technology that produces products causing negative impacts on economic and social development and affecting national defense, security, public order, and social safety.

3. Technology prohibited from transfer according to international treaty provisions to which the Socialist Republic of Vietnam is a member.

4. State secrets technology listed in the State Secrets Catalogue, except where otherwise provided by law.

Article 12. Forms of Technology Transfer

Technology transfer is carried out through the following forms:

1. Independent technology transfer contracts;

2. Technology transfer components within projects or contracts including:

a) Investment projects;

b) Trademark licensing agreements;

c) Intellectual property rights transfer contracts;

d) Contracts for the sale of machinery and equipment accompanied by technology transfer;

3. Other forms of technology transfer as prescribed by law.

Article 13. Prohibited Acts in Technology Transfer Activities

1. Exploiting technology transfer activities to harm national defense, security, and the legitimate rights and interests of organizations and individuals.

2. Destroying resources and the environment; causing negative impacts on human health, morality, and national customs and traditions.

3. Transferring prohibited technology; illegally transferring restricted technology; transferring technology specified in technology transfer contracts that are not allowed to be transferred to third parties.

4. Violating the right to transfer technology regarding ownership and usage.

5. Fraud and deception in establishing and implementing technology transfer contracts, service transfer contracts, and statistical reports on technology transfer.

6. Obstructing or refusing to provide information related to technology transfer activities subject to inspection and supervision by competent state management agencies.

7. Misusing authority to harass, cause inconvenience, and fail to promptly fulfill the requirements of organizations and individuals participating in technology transfer activities as stipulated by law.

8. Disclosing confidential technology and obstructing technology transfer activities.

9. Other prohibited acts as prescribed by law on technology transfer.

Chapter II

TECHNOLOGY TRANSFER CONTRACTS

Article 14. Principles of Formation and Implementation of Technology Transfer Contracts

1. The formation of technology transfer contracts shall be conducted through written contracts or other equivalent forms, including telegrams, telexes, faxes, data messages, and other forms as prescribed by law.

2. The language in technology transfer contracts is agreed upon by the parties; if transactions take place in Vietnam, there must be a contract in Vietnamese. Vietnamese and foreign language contracts have equal value.

3. Technology transfer contracts are concluded and implemented in accordance with this Law, the Civil Code, the Commercial Law, and other relevant laws.

Article 15. Contents of Technology Transfer Contracts

Parties involved in forming technology transfer contracts may agree on the following contents:

1. Name of the technology transfer contract, clearly stating the name of the transferred technology;

2. Object of transferred technology, products created by the technology;

3. Transfer of ownership and usage rights of the technology;

4. Method of technology transfer;

5. Rights and obligations of the parties;

6. Price and payment method;

7. Effective date and duration of the contract;

8. Definitions and terms used in the contract (if any);

9. Plan and schedule for technology transfer, location of technology transfer;

10. Warranty responsibility for transferred technology;

11. Contract breach penalties;

12. Liability for breach of contract;

13. Applicable law for dispute resolution;

14. Dispute resolution body.

15. Other agreements not contrary to the provisions of Vietnamese law.

Article 16. Transfer of ownership of technology

1. The transfer of ownership of technology is the act of the owner of the technology transferring all rights of possession, use, and disposition of the technology to another organization or individual as provided for in Article 18 of this Law.

2. In cases where the technology is an object protected by industrial property rights, the transfer of ownership of technology must be carried out together with the transfer of industrial property rights in accordance with the laws on intellectual property.

Article 17. Transfer of right to use technology

1. The transfer of the right to use technology is the act of organizations or individuals specified in Article 8 of this Law allowing other organizations or individuals to use the technology in accordance with Clause 2 of this Article and Article 18 of this Law.

2. The scope of the transfer of the right to use technology is agreed upon by the parties and includes:

a) Exclusive or non-exclusive right to use the technology;

b) Right to sub-license or not to sub-license the right to use the technology to a third party;

c) Field of use of the technology;

d) Right to improve the technology, right to receive information about improvements to the technology;

đ) Exclusive or non-exclusive right to distribute, sell products produced by the transferred technology;

e) Territorial scope for selling products produced by the transferred technology;

g) Other rights related to the transferred technology.

3. In cases where the technology is an object protected by industrial property rights, the transfer of the right to use technology must be carried out together with the transfer of industrial property rights in accordance with the laws on intellectual property.

Article 18. Methods of transferring technology

1. Transfer of documentation on technology.

2. Training for the recipient organization or individual to fully understand and master the technology within the time limit stipulated in the technology transfer contract.

3. Dispatching technical consultants to assist the recipient organization or individual in putting the technology into production with the quality of the technology and products meeting the standards and schedule stipulated in the technology transfer contract.

4. Other methods of transfer agreed upon by the parties.

Article 19. Effective date of the technology transfer contract

1. The effective date of the technology transfer contract is agreed upon by the parties, except in the case provided for in Clause 2 of this Article; if the parties do not agree on the effective date of the contract, the effective date of the contract shall be the date when the last party completes the contract signing procedures.

2. A technology transfer contract included in the List of Restricted Technology Transfers shall only become effective after being granted a Technology Transfer Permit by the competent state agency.

Article 20. Rights and obligations of the technology transferring party

1. The technology transferring party has the following rights:

a) To require the receiving party to fulfill the commitments made in the contract;

b) To request the competent state agency to protect its legitimate rights and interests related to the transferred technology;

c) To be paid in full according to the contract and enjoy other rights and benefits as agreed in the contract; to enjoy preferential treatment as prescribed by this Law and other relevant laws;

d) To require the receiving party to take corrective measures and compensate for damages in cases where the receiving party fails to fulfill its obligations as stipulated in the contract, except where the parties have agreed otherwise;

đ) To lodge complaints and initiate legal proceedings against breaches of the contract in accordance with the law.

2. The technology transferring party has the following obligations:

a) To ensure that the right to transfer technology is lawful and not restricted by the rights of a third party, except where the parties have agreed otherwise;

b) To fulfill the commitments made in the contract; to compensate the receiving party and third parties for damages caused by breach of the contract;

c) To keep confidential information during the negotiation and signing of the technology transfer contract at the request of the negotiating partner;

d) To notify the receiving party and apply appropriate measures when encountering technical difficulties that prevent the results of the technology transfer from meeting the requirements stipulated in the contract; to compensate the receiving party and third parties for damages caused by failure to fulfill the commitments made in the contract;

đ) To handle the application for permission to transfer technology abroad in cases where the technology belongs to the List of Restricted Technology Transfers;

e) Not to agree to terms that restrict competition prohibited by the Competition Law;

g) To fulfill financial obligations and other obligations as prescribed by law.

Article 21. Rights and obligations of the technology receiving party

1. The technology receiving party has the following rights:

a) To require the transferring party to fulfill the commitments made in the contract;

b) To request the competent state agency to protect its legitimate rights and interests related to the transferred technology;

c) To hire domestic organizations or individuals, or foreign organizations or individuals to perform technology transfer services in accordance with the law;

d) To require the transferring party to take corrective measures and compensate for damages in cases where the transferring party fails to fulfill its obligations as stipulated in the contract, except where the parties have agreed otherwise;

đ) To lodge complaints and initiate legal proceedings against breaches of the contract in accordance with the law;

e) To enjoy preferential treatment as prescribed by this Law and other relevant laws.

2. The technology receiving party has the following obligations:

a) To fulfill the commitments made in the contract; to compensate the transferring party and third parties for damages caused by breach of the contract;

b) To keep confidential information about the technology and other information during the negotiation and signing of the technology transfer contract at the request of the negotiating partner;

c) To handle the application for permission to transfer technology in cases where the technology belongs to the List of Restricted Technology Transfers and is transferred from abroad to Vietnam;

d) To fulfill financial obligations and other obligations as prescribed by law.

Article 22. Price and payment method for technology transfer

1. The price for payment in the technology transfer contract is agreed upon by the parties.

2. Payment may be made in one or more of the following ways:

a) Paying once or in installments in cash or in kind;

b) Converting the value of the technology into capital contribution to an investment project or to the capital of a business in accordance with the law.

c) Other payment methods agreed upon by the parties.

Article 23. Procedures for granting permission to transfer technology listed in the Restricted Technology Transfer Catalogue

1. Organizations and individuals desiring to receive or transfer technology listed in the Restricted Technology Transfer Catalogue must submit the documents specified in Clause 1 of Article 24 of this Law to the competent state agency responsible for granting permission to transfer technology.

2. Within thirty days from the date of receiving valid documents, the competent state agency responsible for granting permission to transfer technology shall issue a written approval, if it does not approve, it must provide a written response stating the reasons. 6. During the implementation of the technology transfer contract, if there is a need to change the content recorded in the Technology Transfer Permit, one of the contracting parties must apply for a new permit.

Documents for requesting approval to transfer technology, documents for applying for a Technology Transfer Permit for technology listed in the Restricted Technology Transfer Catalogue

1. Documents for requesting approval to transfer technology listed in the Restricted Technology Transfer Catalogue include:

a) Application form for signing a technology transfer contract;

b) Legal status documentation of the applicant;

Article 24. c) Documentation explaining the technology according to the regulations of the Ministry of Science and Technology.

Documents for applying for a Technology Transfer Permit for technology listed in the Restricted Technology Transfer Catalogue include:

a) Application form for a Technology Transfer Permit;

b) Written approval for transferring technology from the competent state agency;

c) Legal status documentation of the parties in the technology transfer contract;

2. Application documents d) Original or copy of the technology transfer contract;

đ) List of technical documents and technological equipment (if any) attached to the technology transfer contract.

Rights and registration procedures for technology transfer contracts

1. Parties participating in the conclusion of a technology transfer contract have the right to register the technology transfer contract with the competent state management agency on science and technology as a basis for enjoying incentives under this Law and other relevant laws.

2. Documents for registering a technology transfer contract include:

a) Registration application for a technology transfer contract;

Article 25. b) Original or copy of the technology transfer contract.

3. Within fifteen days from the date of receiving valid documents, the competent state management agency on science and technology shall examine and decide to issue a Certificate of Registration for the Technology Transfer Contract.

Obligation to maintain confidentiality in issuing a Technology Transfer Permit and a Certificate of Registration for a Technology Transfer Contract

Agencies and individuals responsible for issuing a Technology Transfer Permit and a Certificate of Registration for a Technology Transfer Contract shall be responsible for keeping confidential the technology and business secrets in the documents for requesting a Technology Transfer Permit and the documents for registering a Technology Transfer Contract.

Handling violations of technology transfer contracts

1. Sanctions applicable to organizations and individuals violating technology transfer contracts include:

Article 26. a) Penalty for violation;

b) Compensation for damages;

Article 27. c) Compulsion to comply with the contract;

d) Suspension of contract performance;

đ) Termination of contract performance;

e) Voiding the contract;

k) Other measures agreed upon by the parties that do not contravene fundamental principles of Vietnamese law, international trade customs, or international treaties to which the Socialist Republic of Vietnam is a party.

2. In cases where the violation is not fundamental, sanctions such as suspension of contract performance, termination of contract performance, or voiding the contract shall not be applied, except where the parties have agreed otherwise.

3. The parties may agree to limit the extent of liability for compensation for damages resulting from the breach of a technology transfer contract, except where the law provides otherwise.

4. The application of sanctions provided for in Clause 1 of this Article shall be implemented in accordance with the provisions of the law.

TECHNOLOGY TRANSFER SERVICES

1. Technology transfer services include:

a) Brokering technology transfer;

b) Consulting on technology transfer;

Chapter III

c) Technology evaluation;

Article 28. Technology Transfer Services

d) Technology valuation;

đ) Technology appraisal;

e) Promoting technology transfer.

2. Organizations and individuals engaged in technology transfer service business must have a Business Registration Certificate for technology transfer services.

Principles of concluding and performing technology transfer service contracts

1. The conclusion of technology transfer service contracts shall be carried out through written contracts or other forms as prescribed by law.

2. Technology transfer service contracts shall be concluded and performed in accordance with this Law, the Civil Code, the Commercial Law, and other relevant legal provisions.

Rights of organizations and individuals engaged in technology transfer service business

Article 29. Organizations and individuals engaged in technology transfer service business have the following rights:

1. To conduct registered technology transfer service activities;

2. To request users of services to provide necessary information and documents for the provision of technology transfer services;

Article 30. 3. To use domestic and foreign collaborators to serve their technology transfer service activities;

4. To enjoy service fees and other benefits from the provision of technology transfer services according to agreements;

5. To request users of services to compensate for damages caused by the fault of the service users.

2. Request service users to provide necessary information and documents for the provision of technology transfer services;

3. Utilize domestic and foreign collaborators to serve its technology transfer service activities;

4. Enjoy payment for the provision of services and other benefits from the provision of technology transfer services according to the agreement;

5. Require service users to compensate for damages caused by the fault of the service users;

6. Cooperate and joint venture with domestic organizations and individuals, foreign organizations and individuals to carry out technology transfer service activities;

7. Participate in industry associations within the country, regionally, and internationally in accordance with the provisions of the law.

Article 31. Obligations of organizations and individuals conducting technology transfer service activities

Organizations and individuals conducting technology transfer service activities shall have the following obligations:

1. Provide technology transfer service activities in accordance with the content registered for business;

2. Strictly comply with technology transfer service contracts that have been concluded;

3. Be responsible before the service user for the results of their technology transfer service activities;

4. Compensate for losses caused by their fault to the technology transfer service user;

5. Maintain confidentiality of information as agreed upon in the technology transfer service contract;

6. Fulfill financial obligations and other obligations as prescribed by law.

Article 32. Technology appraisal services

1. Technology appraisal services are business or non-business activities conducted through technology appraisals to determine the actual status of transferred technology and other related contents concerning technology transfer at the request of one or more parties signing the technology transfer contract or competent state management agencies.

2. Organizations and individuals providing technology appraisal services, and those requesting such appraisals must comply with the provisions of this Law and other relevant laws.

Article 33. Standards for technology appraisers

Technology appraisers must meet the following standards:

1. Hold a bachelor's degree or higher and possess professional expertise suitable for the requirements and field of technology being appraised;

2. Have at least three years of work experience in the field of technology requiring appraisal;

3. Hold a certification in the field of technology requiring appraisal when required by law.

Chapter IV

ANNEXES INCENTIVES AND PROMOTIONS
TECHNOLOGY TRANSFER

Article 34. Development of technology market

1. The State encourages organizations and individuals to participate in developing the technology market through the following forms:

a) Investing in building infrastructure for the technology market, including technology markets, technology fairs, technology exhibitions, technology trading centers, technology incubators, technology enterprise incubators, and other types;

b) Announcing, disseminating, demonstrating, introducing technology, and participating in domestic and international technology markets, fairs, and exhibitions.

2. The Ministry of Science and Technology shall coordinate with ministries, ministerial-level agencies, government agencies, provincial People's Committees, and centrally governed city People's Committees (hereinafter referred to collectively as provincial People's Committees) to take measures to encourage and create favorable conditions for domestic organizations and individuals, foreign organizations and individuals to invest in organizing technology markets, fairs, exhibitions, and other types of technology transfer activities, and attract various economic sectors to participate in developing the technology market.

Article 35. Technologies encouraged for transfer to rural areas, mountainous regions, and areas with difficult socio-economic conditions, extremely difficult socio-economic conditions

1. Technologies in the fields of protecting and developing genetic resources; breeding, improving, and enhancing the economic value of crop and animal breeds.

2. Technologies for farming, preserving, and processing agricultural, forestry, and aquatic products.

3. Technologies for preventing and combating natural disasters, epidemics, and protecting public health.

4. Technologies for preventing and controlling diseases in crop and animal breeds.

5. Technologies for utilizing renewable energy sources.

6. Technologies for providing clean water and environmental protection.

7. Technologies for increasing productivity, quality, and efficiency of traditional village craft products.

Article 36. Responsibilities of organizations and individuals in technology transfer activities in rural areas, mountainous regions, and areas with difficult socio-economic conditions, extremely difficult socio-economic conditions

1. Programs and projects for disseminating crop and animal breeds or technologies for farming, preserving, and processing agricultural, forestry, and aquatic products must include technology transfer components.

2. Organizations and individuals disseminating and transferring technologies for farming, preserving, and processing agricultural, forestry, and aquatic products must report to the local science and technology management agency where they implement the technology transfer activities.

3. Organizations and individuals supplying crop and animal breeds or transferring technologies for farming, preserving, and processing agricultural, forestry, and aquatic products are responsible for guiding farming, preservation, and processing technologies to users and must compensate for damages arising from the supply of crop and animal breeds and technology transfer.

Article 37. Responsibilities of state management agencies in technology transfer activities in rural areas, mountainous regions, and areas with difficult socio-economic conditions, extremely difficult socio-economic conditions

1. Local state management agencies on science and technology shall be responsible for guiding and creating favorable conditions for the dissemination and transfer of crop and animal breeds or technologies for farming, preserving, and processing agricultural, forestry, and aquatic products; promoting technology transfer activities locally, and promptly detecting, preventing, and prohibiting the dissemination and provision of crop and animal breeds or technologies causing damage to users.

2. Annually, the Ministry of Science and Technology shall lead and coordinate with relevant ministries, ministerial-level agencies, and government agencies to evaluate technology transfer activities in rural areas, mountainous regions, and areas with difficult socio-economic conditions, extremely difficult socio-economic conditions.

Article 38. National Technology Innovation Program

1. The National Technology Innovation Program aims to achieve the following objectives:

a) Enhance national technological capacity and the effectiveness of technology transfer activities;

b) Serve the national key economic programs;

c) Create favorable conditions for small and medium-sized enterprises to replace outdated technologies, apply advanced technologies, and master transferred technologies from foreign countries;

d) Strengthen technological resources in rural, mountainous areas, and regions with difficult socio-economic conditions, and particularly difficult socio-economic conditions.

2. Based on the tasks of national socio-economic development during each period, the Ministry of Science and Technology shall take the lead and coordinate with ministries, ministerial-level agencies, and government agencies related to build and submit the National Technology Innovation Program to the Government for approval.

3. Ministries, ministerial-level agencies, government agencies, and provincial People's Committees within their respective functions and authorities shall be responsible for organizing the implementation of the National Technology Innovation Program.

Article 39. National Fund for Scientific and Technological Innovation

1. The National Technology Innovation Fund is established to achieve the following purposes:

a) Support small and medium-sized enterprises in transferring, innovating, and perfecting encouraged technologies as stipulated in Article 9 of this Law;

b) Promote technology transfer to serve the development of agriculture, forestry, and aquaculture in rural, mountainous areas, and regions with difficult socio-economic conditions, and particularly difficult socio-economic conditions;

c) Support the incubation of technology and technology enterprises;

d) Support the training of scientific and technological human resources for technology transfer, innovation, and perfection.

2. The National Technology Innovation Fund supports technology transfer, innovation, and perfection through the following forms:

a) Preferential loans;

b) Interest rate subsidies;

c) Guarantees for borrowing;

d) Capital support.

3. The National Technology Innovation Fund is formed from the following sources:

a) Voluntary contributions from domestic organizations and individuals, and foreign organizations and individuals;

b) Interest from loan capital;

c) Support from the state budget for the development of science and technology;

d) Other sources.

4. The Government shall specify the details regarding the establishment, management, and utilization of the National Technology Innovation Fund.

Article 40. Transfer of research and development results created using state budget

1. The State grants ownership rights over research and development technology results created using the state budget to the organization in charge of conducting such research and development, except where otherwise provided by law.

2. The owner of research and development technology results created using the state budget has the obligation to use and transfer technology in accordance with requirements for socio-economic development, ensuring national defense and security, disease prevention and treatment, or other urgent social needs.

3. In cases where the owner fails to comply with the provisions of Clause 2 of this Article, the competent state management agency for science and technology may transfer the right to use research and development technology results to another organization.

Article 41. Pledging state-owned assets for technology transfer activities

State-owned science and technology enterprises are permitted to pledge state-owned assets that have been assigned to them to borrow funds for implementing technology transfer activities in accordance with the law.

Article 42. Distribution of income from technology transfer activities created using state budget

Income from technology transfer activities created using the state budget is distributed as follows:

1. Inventors of patents, industrial designs, and semiconductor integrated circuit layout designs who have been granted intellectual property protection shall receive remuneration at levels specified by the Intellectual Property Law;

2. In cases where collectives or individuals create technology not covered under Clause 1 of this Article, the organization in charge of research and development that is granted ownership rights over technology created using the state budget must clearly and publicly establish a mechanism and specify the distribution ratio according to the following principles:

a) Collectives or individuals creating technology shall receive a percentage of the sales price of products produced by such technology for up to ten years if the organization in charge of research and development uses the technology for production;

b) Collectives or individuals creating technology shall receive between twenty percent and thirty-five percent of the proceeds from the technology transfer contract;

3. After paying remuneration to the collective or individual creators of technology, the technology owner shall allocate fifty percent of the remaining income for scientific research and technology development investment, and fifty percent for welfare and incentive funds;

4. In cases where technology is created using multiple sources of funding, including state budget funds, the distribution of income from the state portion shall be carried out in accordance with the provisions of Clauses 2 and 3 of this Article.

Article 43. Contributing technology as capital to investment projects

Organizations and individuals with the right to transfer technology as stipulated in Article 8 of this Law have the right to contribute technology as capital to investment projects. The value of the contributed capital is the agreed-upon technology price in the technology transfer contract.

Article 44. Tax Policy to Promote Technology Transfer Activities

1. Exempt income tax for organizations and individuals contributing capital through Patents and technology.

2. Exempt import duties on goods imported for direct use in technological research and development activities, technological innovation, including machinery, equipment, spare parts, materials, transportation means not yet produced domestically, technologies not yet created domestically; scientific books and publications.

3. Machinery, equipment, and transportation means specifically used for implementing technology transfer contracts that are not yet produced domestically shall be exempt from value-added tax.

4. Production and business establishments investing in building new production lines, expanding scale, innovating technology, improving ecological environment, and enhancing production capacity shall be exempt from corporate income tax on additional income over four years and have their tax payable reduced by 50% over the following seven years.

5. Enterprises investing in technological innovation that accept technology listed in the Encouraged Technology Transfer Catalogue shall be exempt from corporate income tax for four years provided that the total value of tax exemption does not exceed 50% of the total investment cost for technological innovation.

6. Enterprises located in areas with difficult socio-economic conditions, extremely difficult socio-economic conditions, when implementing investment projects that accept technology shall enjoy the following incentives:

a) Exempt corporate income tax for four years starting from the year they begin to generate taxable income, and reduce the tax payable by 50% over the next nine years provided that the total value of tax exemption does not exceed the total investment cost for technological innovation;

b) Exempt import duties on goods serving the replacement and innovation of technology and raw materials, materials, spare parts used for production within five years from the start of production under the new technology.

7. Organizations and individuals transferring technology in priority fields to rural areas, mountainous regions, areas with difficult socio-economic conditions, and extremely difficult socio-economic conditions shall be granted a 50% reduction in income tax on income from technology transfer and provision of plant and animal breeding stock.

8. Technology incubation bases and enterprise technology incubation bases shall be exempt from corporate income tax for four years, have their tax payable reduced by 50% over the next nine years, and be exempt from land use tax.

Article 45. Encourage enterprises to apply and innovate technology

Enterprises may allocate a portion of their pre-tax profits annually to establish a science and technology development fund to conduct research and development and technological innovation activities. If the fund is not utilized or used for purposes other than intended within five years, the enterprise must pay to the state budget the corporate income tax on the pre-tax profit retained by the state for the enterprise and the interest generated from such pre-tax profit.

The Government shall submit to the National Assembly for decision on the amount of pre-tax profit deduction stipulated in this Article.

Article 46. Encourage foreigners and overseas Vietnamese to transfer technology to Vietnam

Foreigners and overseas Vietnamese participating in technology transfer activities listed in the Encouraged Technology Transfer Catalogue or transferring technology in areas with difficult socio-economic conditions, extremely difficult socio-economic conditions shall enjoy the following incentives:

1. Incentives prescribed in Article 44 of this Law;

2. Individuals and members of their families shall be granted multiple-entry visas with validity periods appropriate to the duration of the technology transfer contract;

3. Facilitate residence and travel;

4. Other incentives as prescribed by law.

Article 47. Encourage the Development of Technology Transfer Service Organizations

The State encourages and creates favorable conditions for domestic organizations and individuals, foreign organizations and individuals to establish enterprise technology incubation bases, technology trading platforms, technology markets, technology fairs, and other technology transfer service organizations; organize demonstration, introduction, application, and technology transfer activities in rural and mountainous areas to promote technology transfer activities.

Article 48. Responsibilities of Vietnamese diplomatic agencies abroad regarding technology transfer activities

Vietnamese diplomatic agencies abroad have the responsibility to support and promote technology transfer activities, creating favorable conditions for organizations and individuals to carry out technology promotion activities from abroad into Vietnam and from Vietnam to abroad.

The Government shall specify the responsibilities of Vietnamese diplomatic agencies abroad regarding technology transfer activities.

Article 49. Announcing, demonstrating, introducing technology

1. In the process of announcing, demonstrating, and introducing technology, the competent state management agency on science and technology has the following responsibilities:

a) Annually publish the List of technologies created with state budget funds, except where otherwise provided by law;

b) Encourage and support organizations and individuals to announce new technologies they have created.

2. The State shall take measures to support organizations and individuals who have newly created technologies within the country to implement the announcement, demonstration, and introduction of technology and participate in domestic and international technology markets and fairs.

Article 50. Statistics on technology transfer

1. Statistics on technology transfer include statistics on the number of transferred technologies, new technologies, and improved technologies, and are part of the annual statistical report of the state management agency on statistics.

Statistics on technology transfer shall be carried out in accordance with the provisions of the Law on Statistics.

2. Annually, enterprises, scientific research and technological development organizations, universities, colleges, and other training institutions have the responsibility to report statistics on their technology transfer activities to the state management agency on science and technology.

3. The central statistical agency shall take the lead in coordinating with the Ministry of Science and Technology to specify the reporting system for technology transfer statistics.

Chapter V

RESPONSIBILITIES OF THE STATE MANAGEMENT AGENCIES FOR TECHNOLOGY TRANSFER ACTIVITIES
TECHNOLOGY TRANSFER ACTIVITIES

Article 51. Responsibilities of the Government

In implementing state management over technology transfer activities, the Government has the following responsibilities:

1. To uniformly manage state affairs related to technology transfer activities;

2. To direct the formulation, issuance, and implementation of strategies, plans, programs, mechanisms, policies, and measures to promote technology transfer and technological innovation in line with each stage of economic and social development of the country;

3. To inspect and supervise the implementation of laws on technology transfer; to disseminate, popularize, and educate about laws on technology transfer;

4. To assign and delegate functions for state management over technology transfer activities;

5. To issue Lists of encouraged technology transfers, restricted technology transfers, and prohibited technology transfers;

6. To inspect, audit, resolve complaints and denunciations, and handle violations of laws in technology transfer activities.

Article 52. Responsibilities of the Ministry of Science and Technology

In implementing state management over technology transfer activities, the Ministry of Science and Technology has the following responsibilities:

1. To be responsible before the Government for implementing state management over technology transfer activities; to issue regulatory legal documents on technology transfer within its authority;

2. To take the lead and coordinate with ministries, ministerial-level agencies, and government agencies in formulating strategies, plans, measures, mechanisms, and policies to promote technology transfer and technological innovation, and submit them to the Government for issuance;

3. To formulate Lists of encouraged technology transfers, restricted technology transfers, and prohibited technology transfers, submit them to the Government for issuance, and organize their implementation;

4. To issue and revoke Licenses for transferring restricted technologies, and Certificates of registration for technology transfer contracts;

5. To publish Lists of technologies created with state budget funds according to the provisions of the law;

6. To organize the implementation of technology transfer statistics work according to the provisions of the law;

7. To organize inspection, auditing work; to resolve complaints and denunciations, and handle violations of laws on technology transfer;

8. To perform other tasks delegated or assigned by the Government.

Article 53. Responsibilities of ministries and ministerial-level agencies

In implementing state management over technology transfer activities, ministries and ministerial-level agencies have the following responsibilities:

1. To coordinate with the Ministry of Science and Technology in formulating Lists of encouraged technology transfers, restricted technology transfers, and prohibited technology transfers; to formulate strategies, plans, programs, measures, mechanisms, and policies to promote technology transfer and technological innovation;

2. To organize the implementation of the National Technological Innovation Program in the fields under their responsibility;

3. To create favorable conditions for technology transfer activities, especially encouraged technology transfers and technology transfers in regions and areas encouraged for technology transfers;

4. To organize the dissemination, popularization, and education on laws on technology transfer;

5. To perform other tasks delegated or assigned by the Government.

Article 54. Responsibilities of People's Committees at all levels

In implementing state management over technology transfer activities, People's Committees at all levels shall have the following responsibilities:

1. The People's Committee of the province shall implement state management over technology transfer activities in the locality according to the delegation by the Government;

2. People's Committees at all levels within their respective tasks and powers shall be responsible for creating favorable conditions for technology transfer activities in the locality.

Chapter VI

SETTLEMENT OF DISPUTES, COMPLAINTS, REPORTS AND HANDLING OF VIOLATIONS

Article 55.. Settlement of disputes in technology transfer activities

Disputes arising from technology transfer activities shall be settled through the following methods:

1. Negotiation between the parties;

2. Mediation between the parties by an organization or individual agreed upon by the parties to act as mediator;

3. Resolution by arbitration or court in Vietnam or abroad.

Article 56. Principles for dispute resolution

1. Disputes arising from technology transfer activities where both parties are organizations or individuals of Vietnam shall be resolved in accordance with this Law and other relevant laws.

2. Disputes arising from technology transfer activities where one party is an organization or individual of a foreign country, the parties may agree to choose the competent authority to resolve the dispute and the applicable law in accordance with Article 4 of this Law.

3. Disputes arising from technology transfer activities where the parties have not agreed on the applicable law shall be resolved in accordance with Vietnamese law.

Article 57. Complaints and reports

1. Organizations and individuals have the right to complain about acts infringing upon their legitimate rights and interests in technology transfer activities to the competent state management agency or to initiate litigation before the court in accordance with the law.

2. Individuals have the right to report violations of this Law to the competent state management agency.

3. Complaints and reports and the handling thereof in technology transfer activities shall be carried out in accordance with the law on complaints and reports.

4. During the period of complaint, report, or litigation, when an administrative decision of the competent state management agency regarding technology transfer is effective, organizations and individuals must still comply with that decision; once there is a decision resolving the complaint or report of the competent state management agency regarding technology transfer or a judgment of the court, they shall comply with that decision or judgment.

5. Competent state management agencies at all levels regarding technology transfer shall be responsible for resolving complaints and reports of organizations and individuals within their jurisdiction.

Article 58. Handling of violations of laws on technology transfer

1. Depending on the nature, degree of violation, and consequences resulting from technology transfer activities, violators shall be subject to one of the following forms of handling:

a) Administrative penalties in accordance with the law on handling administrative violations in technology transfer activities;

b) Criminal liability pursued in accordance with the law.

2. In cases where violations of the law in technology transfer activities cause damage to the interests of the State, the legitimate rights and interests of organizations and individuals, compensation shall be provided in accordance with the law.

Chapter VII

IMPLEMENTING PROVISIONS

Article 59. Transitional Provisions

1. Technology transfer contracts that have been registered or approved by competent state management agencies prior to this Law coming into effect shall continue to be valid until the end of their contractual term.

2. Applications for registration of technology transfer contracts submitted to competent state management agencies before this Law comes into effect but not yet resolved shall be handled in accordance with this Law.

3. Science and technology service organizations established and operating before this Law comes into effect and meeting the conditions for operation as stipulated in this Law shall not need to re-register their operations; in cases where science and technology service organizations do not meet the conditions for operation as stipulated in this Law, they must re-register their operations within twelve months from the date this Law comes into effect.

Article 60. Effectiveness

This Law takes effect from July 1, 2007.

Article 61. Implementation Guidance

The Government shall provide detailed regulations and guidance on the implementation of this Law./.

This Law was adopted by the National Assembly of the Socialist Republic of Vietnam, the eleventh session, tenth meeting, on November 29, 2006.