Technology placed into a joint venture with a Chinese partner, once the know-how has transferred, cannot be recalled at the push of a button. This article lists the licence clauses that must exist from day one for paper clawback to become practical clawback.
The right structure: licence the JV to use, never assign the technology
The most foundational error is contributing technology as capital in a way that makes it the JV entity’s asset while the foreign side loses control. The safe structure under the Technology Transfer Law — consolidated text VBHN 138/2026/VBHN-LQ-VPQH after amending Law 115/2025/QH15 — is that the lawful owner keeps ownership and licenses the JV to use it within a defined scope; registrable technology transfer contracts are registered under Decree 101/2026/ND-CP (replacing Decree 76/2018/ND-CP). Separating the ownership layer from the use layer is the precondition for every protective clause that follows.
Scope clauses that must be locked
The licence must lock four borders: field of use — only the defined products and lines; territory and site — only at the JV plant; user identity — no sublicensing and no transfer to the partner’s affiliates without written consent; and term — tied to the JV term and termination conditions. Add tiered confidentiality for technical documents, source code and process parameters under the IP Law’s trade secret regime, with named-person access lists.
Blocking competitive use and handling improvements
The clause against competing with the licensed technology must state plainly that the partner and its affiliates may not use the received know-how to make competing products outside the JV, including for a reasonable period after the JV ends — balanced against competition-law limits on restrictive agreements. On improvements: state who owns improvements the JV creates on the licensed technology; a common structure lets the JV own local application improvements while granting the technology owner a non-exclusive licence back, so the licensor is not locked out of developing its own technology by its own improvements.
Clawback on termination: clauses plus operations
The clawback clause must list termination duties: immediate cessation of use, certified return or destruction of technical documents, deletion of electronic data, return of moulds and dedicated equipment, and confidentiality surviving termination. But clauses work only when operations support them: issue technical documents through access-controlled mechanisms rather than wholesale handover, and keep core parameters as services or sealed modules where feasible. Effective technology clawback is designed on day one, not drafted on the last day.
Frequently asked questions
What license terms are needed when transferring technology to a joint venture with a Chinese partner?
License the JV to use it within a locked scope while the lawful owner keeps technology ownership under the Technology Transfer Law (consolidated VBHN 138/2026), instead of a capital contribution that assigns ownership to the JV entity.
How can the Chinese partner be prevented from using the technology to compete?
With a clause barring the partner and its affiliates from using received know-how to make competing products outside the JV, including a reasonable period after termination, combined with tiered confidentiality and named-person access control to technical documents.
What are the terms for recovering the technology when the joint venture ends?
It must carry duties of cessation, certified return or destruction of documents, data deletion, return of moulds and equipment, and surviving confidentiality — and, more importantly, access-controlled document issuance from the start of operations so clawback is practically possible.
Should the scope of technology use be limited?
Yes. The contract must state who owns improvements the JV creates on the licensed technology and a licence-back mechanism for the technology owner, so the licensor is not locked out by its own technology’s improvements.
This article has been quality-reviewed by the FLAW AI Legal Council
