An FDI equipment maker signs nationwide exclusive distribution with a Vietnamese company, handing over tiered wholesale price lists, partner-specific discount policies and a list of 400 industrial customers with transaction history. A year later it discovers the distributor is using those very prices to pitch a competing brand it has just taken on. Management asks: is the handed-over information still a protected secret, and what should be done?
Primary sources to check
Unpublished price lists and customer lists with transaction terms are trade secrets under Article 4(23) and Article 84 of the IP Law (consolidated text 67/VBHN-VPQH 2026) if the owner keeps them under necessary secrecy measures. A distributor using them for a competitor infringes under Article 127, and the same conduct is unfair competition infringing trade secrets under Article 45(3) of the Competition Law 23/2018/QH14, sanctioned under Decree 75/2019/ND-CP. The distribution relationship itself is governed by contract under the Civil Code 2015 and the Commercial Law 36/2005, so confidentiality, exclusivity and breach consequences must be written as concrete clauses. Personal data inside the customer list also falls under the personal data framework of Law 91/2025/QH15 and Decree 356/2025/ND-CP.
What this means for an FDI employer
Exclusivity doubles the risk: the distributor both holds the secrets and is the only route to market, so the contract must lock three layers. Layer one, identification: an annex listing what is handed over — each price-list version, the customer file — marked confidential. Layer two, conduct limits: no use of the secrets outside distributing the maker products, a bar on taking on directly competing brands if two-way exclusivity is wanted, and confidentiality flowing down to the distributor sales staff. Layer three, the exit: on termination, data return and certified deletion, plus a reasonable period ban on pitching with the handed-over information. Without these layers the IP Law route remains, but proving the secrecy condition becomes far heavier.
When a distributor is caught selling to a rival with the very secrets handed over, the practical sequence is: fix the evidence before confronting — screenshots of quotations sent to customers, pitch emails, statements from approached customers; send a breach notice invoking the confidentiality clause and Article 127; and trigger termination rights if the contract provides them. In parallel, prepare a replacement distribution channel, because a dispute with an exclusive distributor usually stalls that territory sales for months. A competition-authority complaint under the Competition Law is supplementary leverage, but the civil court file is where full damages are recovered.
Recommended sequence of actions
- Make the secret-materials inventory an annex to the distribution agreement, updated for each price-list version and customer file.
- Draft a clause barring use of the secrets outside distributing the maker products, with flow-down duties for distributor staff.
- Pre-agree damages and termination rights for use of secrets in favour of a competitor, so nothing is argued from scratch.
- On termination: a data-return record, certified copy deletion, and customer notification of the new channel.
FAQs
How are price secrets and customer lists protected when handed to an exclusive distributor?
Protect by identifying and limiting inside the distribution agreement itself: an annex listing each price-list version and the customer file handed over, marked confidential, stating the distributor may use them only for distributing the maker products and must flow confidentiality down to its sales staff. In law, information meeting Article 84 of the IP Law is protected as a trade secret, so handing it over under a conditional contract does not destroy secrecy — the contract is itself evidence of the necessary secrecy measures.
If they sell for a competitor, can we sue?
Yes, if three things can be proven: the information is a trade secret meeting Article 84, the distributor used that very information for the competitor, and loss resulted. The claim rests on Article 127 of the IP Law on trade-secret infringement, the confidentiality clause of the distribution agreement, and Article 45(3) of the Competition Law 23/2018 on unfair competition. The strongest evidence is the distributor pitch material for the rival containing prices or terms that exist only in the handed-over documents.
When the distribution agreement ends, how are handed-over secrets recovered?
Through the mechanism already written in the contract: the distributor must return all documents and data, delete electronic copies and certify the deletion in writing, and stop using the customer list and prices handed over. If the old contract says nothing, the maker can still demand cessation under Article 127 of the IP Law, but recovering copies is harder to enforce — which is why a return clause, with a concrete deadline such as 15 days from termination, belongs in the contract from the start.
This article has been quality-reviewed by the FLAW AI Legal Council
