Product formulas, customer lists, pricing strategies, manufacturing processes — many businesses hold information that creates competitive advantage but cannot or do not want to register for exclusive rights. Trade secrets are the protection tool for these assets: no filing, no registration fees, unlimited protection period — but only for businesses that genuinely keep secrets.
This article explains the legal framework: protectability conditions, the confidentiality measures to implement, infringing acts, and how to act when your trade secrets are infringed.
Quick summary
| Item | Key information |
|---|---|
| Nature | Valuable business information, undisclosed, kept confidential by the owner through necessary measures |
| Rights establishment procedure | No registration required — rights arise upon lawful acquisition and implementation of confidentiality |
| Protection period | Unlimited — lasts as long as the confidentiality conditions are met |
| Biggest risk | Permanent loss of protection if the information is publicly disclosed or confidentiality ceases |
| Handling infringement | Article 127 of the Law on Intellectual Property; administrative sanctions under Decree 99/2013/ND-CP |
| Key point | Without confidentiality measures, there is no right to protect |
Legal basis
- Law on Intellectual Property No. 50/2005/QH11, as amended and supplemented by Law No. 36/2009/QH12, Law No. 42/2019/QH14 and Law No. 07/2022/QH15 (effective from 01/01/2023).
- Article 4 (Clause 23 — definition), Article 6 (basis for establishing rights), Article 84 (protection conditions), Article 121 (owners), Article 127 (infringing acts) of the Law on Intellectual Property.
- Decree No. 65/2023/ND-CP (as amended by Decree No. 100/2026/ND-CP) detailing the Law on Intellectual Property on industrial property; Decree No. 99/2013/ND-CP on administrative sanctions in the industrial property field.
- The 2019 Labour Code (employees’ confidentiality obligations); the 2018 Law on Competition (unfair competition acts relating to trade secrets).
What is a trade secret — three protection conditions
Article 4(23) of the Law on Intellectual Property defines a trade secret as information obtained from financial or intellectual investment activities, undisclosed, and capable of being used in business. Article 84 provides that information is protected only when it simultaneously satisfies three conditions:
- Not common knowledge and not easily obtainable. Information that everyone in the industry knows or can easily find through ordinary research is not a trade secret.
- When used in business, creates an advantage for its holder over those who do not hold it. This condition ties protection to real economic value.
- Kept confidential by the owner through necessary measures so that the information is not disclosed and not easily accessible. This is the decisive condition and also where many businesses fail: they have valuable information but no confidentiality measures, and when a dispute arises they cannot prove any right.
Typical examples: product formulas, proprietary technological processes, customer lists with transaction histories and discounts, pricing strategies, unpublished business plans. Conversely, general skills and experience accumulated by employees are usually not the employer’s trade secrets — this boundary is a common source of disputes when employees leave.
The law excludes certain categories of information from protection: secrets concerning personal identity; secrets concerning state management; secrets concerning national defence and security; and other confidential information unrelated to business. Information already publicly disclosed — published by the business itself in marketing materials, articles or tender dossiers — no longer satisfies the protection conditions.
No registration needed — rights arise automatically
Unlike patents, industrial designs or trademarks, rights in trade secrets are established on the basis of lawful acquisition and the implementation of confidentiality (Article 6(3)(c)) — no registration procedure, no certificate, no state fees.
Advantages: immediate protection, no time limit, no need to publish technical details as when filing a patent. Disadvantages: rights exist only as long as the information stays secret — once publicly disclosed, protection ends permanently; the law also cannot stop others from independently developing the same information.
Choosing between patent registration and keeping a trade secret is a strategic decision: technology easily reverse-engineered (mechanical, electronic) should generally be patented; processes and formulas hard to detect by analysing the product (food, chemicals) may be more effectively kept secret.
Confidentiality measures businesses must implement
“Necessary measures” has no closed list in the law, but practice shows businesses need at least these layers:
- Non-disclosure agreements (NDAs): signed with employees, partners, suppliers — clearly defining the scope of confidential information, confidentiality obligations during and after termination of the relationship, and penalties for breach;
- Classification and marking of documents: confidentiality levels, “confidential” marking, limiting access on a need-to-know basis;
- Technical controls: system access rights, data encryption, access logs, management of storage devices;
- Personnel procedures: confidentiality awareness training upon hiring; revoking access rights and documents, and reminding of confidentiality obligations in writing when employees leave;
- External controls: signing NDAs before sharing information with partners; confidentiality clauses in manufacturing and product-testing contracts.
In a dispute, the business must prove it applied confidentiality measures — so every measure must be documented: internal policies, training records, access-grant logs.
Acts deemed infringement
Article 127(1) of the Law on Intellectual Property lists acts infringing trade secret rights: accessing or collecting information by acting against the confidentiality measures of the lawful controller; disclosing or using information without the owner’s permission; breaching a confidentiality contract or deceiving, inciting, bribing, coercing, inducing or taking advantage of the trust of a person under a confidentiality obligation; accessing or collecting information of a licence applicant by acting against the confidentiality measures of the competent authority; using or disclosing a trade secret while knowing or being obliged to know the information was obtained through the above acts; failing to perform the obligation to keep test data confidential.
In practice, the most common categories are former employees taking data to competitors and partners breaching NDAs.
Handling trade secret infringement
When infringement is detected, act in this order: collect and preserve evidence first — access logs, emails, contracts, the infringer’s product samples — because digital evidence is easily deleted; send a written demand to cease the acts with a legal warning; while assessing damages and objectives.
As for legal measures: administrative sanctions under Decree 99/2013/ND-CP — fast intervention, with state authorities drawing up records; civil litigation seeking cessation, apology, correction and damages — requiring proof of the three Article 84 conditions, the infringing acts under Article 127, and the causal link to the damage; in urgent cases, the court may be asked to apply provisional urgent measures.
Infringing acts may also be handled under competition law as unfair competition acts. Cases with foreign elements are much more complex in terms of evidence and enforcement — so prevention through tight NDAs from the negotiation stage is best.
Trade secrets in employment relationships
Employees are the most common leakage channel — during employment and especially upon departure. An employee who discloses the employer’s technological or business secrets may face dismissal as a disciplinary measure; employment contracts may agree on the content and duration of confidentiality and liability for post-termination breaches.
Businesses should: include confidentiality clauses in employment contracts or separate NDA appendices; classify confidential information by access level; conduct tight offboarding — revoking accounts, devices and documents, and reminding of confidentiality obligations in writing; for sensitive positions, consider non-compete agreements with commensurate compensation.
Note the boundary: an employee’s general professional skills and experience are not the employer’s trade secrets — overbroad confidentiality clauses with unreasonable prohibitions may be deemed to restrict the right to work and are unlikely to be fully upheld by courts.
Assignment and licensing of trade secrets
Trade secrets may be assigned or licensed like other industrial property subject matter — typically technology transfers and franchises in which the recipient gains access to operational know-how. Because there is no certificate and no registration at IP Vietnam, the entire value of the transaction lies in the contract.
Trade secret transfer contracts must be tightly drafted: description of the transferred information; purpose and scope of use; the recipient’s confidentiality obligations even after the contract ends; prohibition on transfer to third parties; transfer fees; penalties for breach and damages; provisions for when the information ceases to be secret. The negotiation stage is the riskiest moment — sign a separate NDA before disclosing confidential information to a potential partner.
What FLAT LAW FIRM does
FLAT LAW FIRM helps businesses build a trade secret protection system from the inside out: reviewing and classifying information assets; drafting internal confidentiality policies and NDAs for employees, partners and suppliers; confidentiality and non-compete clauses in employment contracts; trade secret assignment and licensing contracts and technology transfers; offboarding procedures for key personnel.
When infringement occurs, we assist with collecting and preserving evidence, sending cease-and-desist demands, working with administrative sanction authorities, and filing civil suits for damages. Please contact us for advice on your business’s specific case.
Frequently asked questions
Do trade secrets need to be registered anywhere?
No. Rights in trade secrets are established automatically on the basis of lawful acquisition and the implementation of confidentiality (Article 6(3)(c) of the Law on Intellectual Property). What the business must do is implement and document confidentiality measures.
How long are trade secrets protected?
Unlimited in time. Rights exist as long as the information satisfies the three Article 84 conditions — in particular, as long as it is kept confidential. Once the information is publicly disclosed, protection ends permanently and cannot be restored.
Is it a violation if a departing employee takes the customer list?
Possibly. If the customer list satisfies the three Article 84 conditions (not common knowledge, creates a business advantage, kept confidential) and the employee accesses, uses or discloses it without authorisation, that is infringement under Article 127. The business needs NDAs, access rights management, and evidence of the confidentiality measures applied.
Should a manufacturing formula be patented or kept as a trade secret?
It depends on how easily it can be reverse-engineered. Formulas and processes hard to detect by analysing the product (food, chemicals) are often effectively kept secret — no fees, unlimited protection period. Technology easily reverse-engineered (mechanical, electronic) should be patented for a 20-year exclusive right. Many businesses combine both for different parts of the same technology.
How to handle a foreign partner breaching an NDA?
First, rely on the contract: the confidentiality scope, governing law, and the agreed dispute resolution mechanism. In parallel, provisional urgent measures may be sought to stop continued use and disclosure. Cases with foreign elements are more complex in evidence collection and enforcement — so prevention through a tight NDA from the negotiation stage, before any disclosure, is best.
