To deter and resolve the theft of intellectual property, particularly vulnerable IP assets like trade secrets, in today’s knowledge-driven, constantly connected global economy, a comprehensive legal environment is required.
Trade secrets can provide businesses a competitive advantage, but they’re also targets for misappropriation. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which entered into force in Vietnam on January 14, 2019, laid the groundwork for its nations to impose criminal penalties for trade secret misappropriation. Vietnam must comply with the CPTPP’s standards in order to ensure a strong business environment as it continues its economic integration trajectory.
Trade secret crimes with the CPTPP and Vietnam’s Criminal Code
According to Article 18.78 of the CPTPP, signatories must have criminal processes and sanctions in place for one or more of the following:
- Unauthorised and willful access to a trade secret held in a computer system;
- Unauthorised and willful misappropriation of a trade secret, including by means of a computer system; or
- Fraudulent disclosure, or unauthorised and willful disclosure, of a trade secret, including by means of a computer system.
Trade secret offenses are not specifically included in Vietnam’s Criminal Code 2015 (as amended in 2017). However, the following articles may be relevant to trade secret theft to some extent:
- Article 159. Infringement of secrecy or security of another person’s mail, telephone, telegraph or other form of private information exchange;
- Article 288. Illegal provision or use of information on computer networks or telecommunications networks; and
- Article 289. Illegal infiltration into another person’s computer network or telecommunications network or electronic device.
One may claim that these provisions of the Criminal Code, which mostly deal with obtaining information from a computer network without permission, are sufficient to fulfill the CPTPP’s requirements. However, their scope is limited to information exchange, information on computer networks, and so on, and only covers a small portion of all ‘trade secrets,’ which, according to Vietnam’s IP Law, encompass all types of commercially valuable information related to business, with the exception of personal identification, state management, and national defense and security.
These articles are primarily intended to address computer-based misbehavior involving private personal information (which may or may not be connected to business). There are no criminal penalties for ‘offline’ misappropriation, much alone trade secret theft or economic espionage, according to the law. Many cases of trade secret misappropriation still occur through paper-based, rather than digital, methods. Because a trade secret may be as simple as a scribbled note with “tricks of the trade,” prying eyes can easily take it.
Employees who violate the pledge of confidentiality by divulging a company’s valuable business secrets to third parties are one of the most serious dangers to trade secret preservation. A respected security software business in Vietnam recently discovered that an infringement (suspected to be a former employee) was selling source code from the company’s product (protected as a trade secret) on the internet. Even the most well-secured business is vulnerable to insider threats, which may result in significant financial losses and reputational harm if not adequately protected.
Supplementing the current legal framework with strong criminal provisions on trade secrets, in accordance with the CPTPP, will help Vietnamese businesses, particularly SMEs, thrive and gain a competitive advantage in dealing with piracy risks, as well as help foreign businesses maintain their competitive edge, promising a bright future for Vietnam in attracting both domestic and foreign investment.
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