Legal actions that enterprises in Vietnam can carry out when former employees leak trade secrets illegally

Legal actions when trade secret is leaked

Trade secrets (“TSs”) have become one of the most invaluable properties of enterprises in Vietnam. If an enterprise named A discovers that its former employee who knew many of its TSs has provided such TSs to another enterprise named B, what legal action can enterprise A do in this case?

In this article, BLawyers Vietnam would like to give some recommendations below:

1. Requesting to resolve a violation of the law on intellectual property

TSs as a subject matter of industrial property rights are protected by the law on intellectual property. If a former employee of enterprise A has disclosed TSs of enterprise A without its consent, this would be deemed to constitute an administrative violation in the field of industrial property. In this case, enterprise A can send a request to resolve the administrative violation of its former employee to the state authority body competent to handle administrative violations.

2. Filing a complaint against a competition case

TSs are a type of confidential business information (“CBI”) that helps enterprises that own them gain competitive positions in the business market. Thus, the law on competition protects enterprises owning CBI by prohibiting other enterprises in the market from committing the following unfair competitive actions:

  • Assessing and acquiring CBI by going against security measures of the owner of such information; or
  • Disclosing or using CBI without its owner’s consent.

As mentioned above, there will be a circumstance in which the former employee of enterprise A provided TSs of enterprise A to enterprise B without the consent of enterprise A. Despite being aware of this issue, enterprise B still used the TSs collected from enterprise A. Under this circumstance, enterprise A can eliminate the violation of enterprise B by filing a complaint against a competition case to the National Committee of Competition.

The statute of limitations for filing the complaint shall be 03 years from the performing date of the violation.

3. Claiming to compensate for damage in accordance with civil laws

The labor laws allow enterprise A to demand that the former employee compensate for damage in accordance with regulations of the civil law and other relevant laws when this individual violates his/her responsibility to protect the TSs. The laws on Intellectual property and competition also allow enterprise A to require those who infringe their rights related to their TSs to pay compensation in accordance with regulations of the civil law.

Under the prevailing Civil Code, the subjects above will be responsible for compensating for the damage of enterprise A if this enterprise can prove the following factors:

  1. The acts of violating the regulations of laws on protecting TSs that the subjects have committed;
  2. The actual damage suffered by enterprise A from the acts of violating the subjects; and
  3. The causal relationship between the violations of those subjects and the damage to the enterprise.

In short, grasping regulations of the laws on protecting TSs will enable enterprises to be more proactive in resolving infringements against their rights related to their TSs.

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. BLawyers Vietnam would love to hear from you.

Date: 12 September 2023

Writer: BLawyers Vietnam

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