Importants Matters to Consider in M&A Contract

Before carrying out merger or acquisition (M&A), enterprises need to research carefully regulations of law to protect their rights and interests. Regulations on each aspect of M&A activities are referred to in various legal documents such as Law on Enterprises, Commercial Law, Competition law, Law on Investment, Civil Code …

When carrying out M&A, enterprises should also pay attention to some basic terms in the contract. The M&A lawyers should be referred to for effective process and minimizing risks of the transaction. Definition, this term is used to define words, phrase used many times or unified understanding between the parties or abbreviations.

Entity, the parties should specify the parties’ information such as: corporate names, address of headquarter, name, position of legal representative, identity card number (or passport number) of legal representative, corporate tax code, … according to enterprise registration certificate or investment registration certificate. When entering into contract, the parties can contact and ask partners to provide copies of enterprise registration certificate or investment registration certificate to ensure correct information and authority to sign.

M&A conditions in M&A contract. Conditions for M&A are conditions agreed by two parties to carry out M&A. M&A is carried out only when these conditions have been met. These conditions include conditions agreed by General Meeting of Shareholders, Board of Directors, the company owner; Conditions of announcing company status, financial obligations, business activities …, announcing to relevant third parties; Conditions of business activities, company activities; Conditions of people, personnel.

Declaration and commitment of both parties on the status of enterprises, contract need to have term of affirmation and commitment of seller about corporate debt. This will limit disputes and risks for the buyer.

Determination of assets and financial obligations in M&A contract. This determination includes time of determination, entity, related costs, methods for disposal of assets.

Transfer of rights and obligations in M&A contract. The time of transfer, the time of enjoying rights and generating obligations, the conditions for transfer, the mode for transfer, the transfer procedures and the papers, documents needed to transfer, includes: transfer of ownership rights, economic rights; transfer of effective contract; Arising benefits enjoyed by merged company; Tax obligations, insurance obligations, wages for employees and debt repayment obligations.

Methods and time of payment, parties need to specify methods for payment and specific duration of payment with amount of each installment payment. In order to ensure safety, the parties should request a competent reputable organization to provide intermediary financial services. This third party will stand out to ensure the parties of the contract to comply correctly and legally with the agreement.

Conditions, time limit, procedure of M&A, the buyer needs to specify attached conditions and specific time in process of M&A to let the seller perform obligations of transfer of asset, stocks, shares under regulations of contract. Procedures include procedures under law and other procedures under company’s charter.

Legal rights and obligations, parties need to detail obligations in previous period, during and after contract performance as well as the specific time of termination.

Time limit of contract performance, parties need to specify the time of taking effect and termination, or arising grounds which result in the termination of the contract.

Term of dispute resolution, dispute may be brought to the competent Court or Commercial Arbitration for settlement.

Term of fines against violations is also necessary to pay attention. This is a type of sanctions made by the parties but this must be suitable for the regulations of law.

Force majeure clause. Force majeure is a legal event arising out of subjective will of the parties. These cases make one or both parties unable to perform or perform improperly their obligations. When breaching the contract due to a force majeure event, the law would not force to take responsibility for the asset.

Besides, merger contract should have term of transfer of stock, term of employee utilization plan after merger and acquisition.

ANT Lawyers is a law firm in Vietnam located in the business centers of Hanoi, Danang, Ho Chi Minh city. We provide convenient access to our clients. Please contact us to book your time in advance to let us provide our best services.

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Transfer of Trademark Application in Vietnam

After filing of the application for a trademark registration, applicants might wish to transfer theirs application to others. There are lots of reasons for this but most of them derives from practical business activities and development needs of market, and society. For instance, two subjects transfer the application to each other for profit purpose; individuals want to set up an enterprise in the future and register a trademark as individuals and then transfer the application to the legal person to get early the priority date; at the moment, individuals are unqualified to be applying in applicants’ s name then individuals have others to do in application, in the appropriate time, and when the individuals are qualified according to statutory, they would implement the procedure of transfer the application.

Trademark in Vietnam

Transfer of application for a mark registration is implemented on voluntary basis between the parties or decision of the competent authority and shall be presented in the form of a written contract. However, owner of application is only allowed to transfer application at the following times: before National Office of Intellectual Property of Vietnam makes a decision on refusing to accept the application, decision on issuing or refusing to issue protection titles. If one of the parties in contract transfers application for transfer registration after the time mentioned above, that application shall not be accepted.

Necessary documents when implementing the procedure of transfer of application for a trademark registration include:

-Transfer contract: Contract must show name and address of transferor and transferee; the number of transfered applications or sufficient information to determine that application;

-        -Declaration for registration of transfer;

-        -Power of attorney (if authorized to industrial property agent i.e. ANT Lawyers).

According to regulations, duration of examining application for transfer registration is 2 months from the date of submission the application. However, this duration can be faster or slower, depending on the workload of National Office of Intellectual Property at the time the application is examined.

If the Client would like to know more about information and to be consulted about matters relating to transfer of application for a mark registration, please contact Intellectual Property department of ANT Lawyers, the trademark attorney in Vietnam.

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Update Developments of Request for Investigation of Anti-dumping PFY Originating From China, India, Indonesia and Malaysia

On Nov 07^th, 2019, Trade Remedies Authority of Vietnam (Investigating Body) received Dossier of request from companies representing the domestic industry (Requesting Party). The Dossier requests for investigation of the application of anti-dumping measures on long-fiberproducts made from polyester (PFY) originating from China, India, Indonesia andMalaysia from companies representing the domestic industry (Requesting Party).

On Nov 22^th, 2019, Investigating Body issued official dispatch No. 1056/PVTM-P1 requiring the Requesting Party to supplement, adjust to clarify some contents of the investigated goods, methods and basis for determining dumping margins and losses of the domestic industry.

On Dec 31^st, 2019, the Requesting Party fully submitted all additional information as requested.

On January 09^th, 2020, the Requesting Party provided additional documents to clarify additional information on the method of calculation, determination dumping margins.

On January 21^th, 2020, Investigating Body confirmed that the dossier is complete, valid in accordance with laws on trade remedies.

According to Law on foreign trade management 2017 and guiding or related documents, next steps of anti-dumping case as follows:

Investigating Body shall examine the Dossier to submit to the Minister of Industry and Trade for consideration whether to conduct or not to conduct an investigation: 45 days from the date of receiving a complete, valid dossier, which means January 21^th, 2020. Contents of Dossier examination include: (i) Determine the legal representative status of the domestic industry of organizations, individuals that submit the Dossier; (ii) Determine evidence on the dumping of imported goods that cause or threaten to cause significant injury to a domestic industry or significantly prevent the formation of a domestic industry.

In order to prepare the examination, as well as to ensure the legitimate rights and interests of the enterprise, the Investigation Body suggests that the domestic enterprises producing/trading in the same goods mentioned above provide the following information: (i) Information about the enterprises; (ii) Design capacity and production of long fiber products made from polyester (PFY) in 2016, 2017, 2018 and 2019; (iii) The company’s opinion on the case (agree, disagree, no opinion); (iv) Any other documents/evidence that the company thinks it is related to the case. The time limit for providing the above information is before 17:00 on February 14^th, 2020 (Hanoi time).

To have more time to review the case file and relevant information, on March 05^th, 2020, Ministry of Industry and Trade has issued Decision no. 752/QD-BCT on extension of 30-day time limit for making a decision to investigate the case. Accordingly, the last time limit for issuing decision relating to this case is extended to April 06th, 2020.

The companies could authorize an international trade law firm in Vietnam that has experience in anti-dumping to assist with the procedures at the state authorities to cooperate.

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Four Steps of Patent Application Processing Procedures

After submitting patent application at National Office of Intellectual Property in Vietnam (NOIP), the applicant will concern on how their application will be processed.

Specifically, patent application will be gone through the following phases: receipt of application; formality examination of application; substantive (ex-officio) examination of application; grant of or refusal to grant protection titles; official registration and publication of decisions on the grant of protection titles.

Vietnam patent

Firstly, receipt of patent application:

When receiving the application in this first phase, the NOIP will check and prepare with the documents listed in the declaration to consider whether to receive the dossiers. In case of sufficient dossiers according to the law, the receiving officer shall receive the dossiers and stamp the submitting date in the dossiers and send back a declaration to the applicant. In case of insufficient dossiers, the NOIP shall decline to receive the dossiers.

Secondly, formality examination of patent application:

The purpose of formality examination is for examination of observance of regulations on formalities applicable to applications, serving as a basis for concluding whether applications are valid or invalid. If the application is valid, it will be proceeded to the next step, otherwise, it will be denied. The formality is considered related to the language in the application, application presentation, word size; the declaration must ensure the compulsory information and be uniformed; regarding the documents required to have the confirmation of competent authority then those documents must have that seal. Besides, the NOIP also check the filing date and priority date (if any). If there are any errors in the dossiers, the NOIP will send a notification to applicant of intention to refuse the valid application and set a period so as the applicant can correct the errors. In case applicant does not reply to the notification, the NOIP will issue the refusal notification of the application; if the application is valid, the NOIP will issue the acceptance notification of the valid application.

Thirdly, publication of valid application:

After being accepted the validity, the NOIP will publish the valid application on Industrial Gazette in the nineteenth month from the date of priority or the filing date in case the application has no date of priority or within two months after it is accepted as a valid application, whichever is later. If the patent application is under the Patent Cooperation Treaty, it shall be published within two months from the date it is accepted as a valid application and entering the national phase. Regarding the application which request for earlier publication, it shall be published within two months from the date the NOIP receives that request or the date it is accepted as a valid application, whichever is later.

Fourthly, substantive examination of patent application;

The purpose of substantive examination is to assess the protect ability of objects stated in those applications under the protection conditions and corresponding protection coverage. Be noted that during the substantive examination process to the application having the priority, the NOIP may use the searching information result and corresponding substantive examination result of the application submitted abroad. However, the applicant could actively provide the following documents for substantive examination: (i) searching information result and corresponding substantive examination result of the application submitted abroad (ii) the copy of protection title on the basis of similar application submitted abroad (iii) the documents related to technical art of the subject mentioned in the application which provided by oversea competent authority and other documents. The content of substantive examination is to assess the corresponding of the subject in the application to each protection claim. After finishing the substantive examination period, the NOIP will issue one of the following notifications:

-The subject in the application does not satisfy the protected conditions or satisfies the protection conditions and remains some errors. Then, the NOIP will issue a notification of intention of refusal to grant protection title and set a period for applicant to have opinion and correct the errors. If the applicant replies to the notification and the NOIP considers to be suitable, then NOIP then issues the intention of granting protection title and set a period for application to submit the granting fee.

-If the subject in the application satisfies the protected conditions, the NOIP then issues the intention of granting protection title and set a period for application to submit the granting fee.

In both the above cases, if the applicant submits the granting fee, publication of granting decision fee; registration protection title fee and first year remaining validity fee, applicant will then be granted the patent registration certificate. Every year, applicant will have to submit the remaining validity fee, otherwise, the protection title will be invalid.  It is suggested that patent attorney in Vietnam will be assigned to follow up with the authority for effective management of IP properties.

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How Important is End-User License Agreement in Vietnam?

End-user license agreement (EULA) is a legal agreement enter between two parties which are software developer or provider and software user. Terms and Conditions could cover a large scope of matters, for example, payment schedule, privacy policy, providing service to third party, solving arisen disputes and even inclusive of EULA. Whilst, EULA almost focuses on agreement of giving the user using software right and includes the regulations related to grant of license, limitations or using period of the software.

Software Compliance Law Firm in Vietnam

Normally, after the user downloads the software and officially install it, an EULA would be shown out for user to understand its rights and obligations and agreed to. EULA may be called by different names which are License Agreement, Software license agreement, etc.

What is the nature of EULA?

This is an commitment which developer or provider create and user must abide by before installing the software. However, this does not mean from the time user agrees to EULA, user will be the owner of the software. The user only has the legal using right to that software. Some important matters to consider would be granting of license, limitation of granting of license, and IP.

Firstly, “Granting of License” is a prerequisite of this agreement when clearly state that user will be granted using software right. Secondly, the term “Limitation” is also a very important term of EULA as after installing, user may utilize the software in lots of purposes which are both legal and illegal and may affect the software developer/provider or any third party. Thus, this term particularly regulates the activities which users are not allow to do while using the software. Thirdly, “Intellectual Property” is a pretty popular term in almost all type of agreements to protect the developer in copyrights. Besides, there are other terms such as “software update, maintenance and technical assistance, ability limitation, regulated law, etc.” and for each particular case and purpose of the owner, the agreement might also cover other appropriate terms.

End User License Agreement is a very important agreement attached to the software to guide the users and protect rights of the software developer or provider. Therefore, this agreement should be anticipating all cases as software owner wish to avoid disputes and even in the case of violation, the agreement will be the starting points to recover the damages to the developer and software owner.

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Condition, Procedures and Period of Patent Registration in Vietnam

Before applying the patent registration, applicant needs to find out the matters related to conditions, procedures and period from the time of submission the application until granting the protection title when registering a patent to avoid the cases that National Office of Intellectual Property in Vietnam (NOIP) may issue the notification on denying examination due to not meeting criterias or non-compatible dossiers.

Register invention in Vietnam

According to Law on Intellectual Property in Vietnam, a patent needs to satisfy 03 following criterias to be protected:

-An invention shall be deemed novel if it has not yet been publicly disclosed by use or by means of a written description or any other form either inside or outside Vietnam before the filing date or the priority date, as applicable, of the invention registration application.

-An invention shall be deemed not yet publicly disclosed if it is known to only a limited number of persons who are obliged to keep it secret.

-An invention shall not be deemed to have lost its novelty if it is published in the following cases, provided that the invention registration application is filed within six (6) months from the date of publication:

1.It is published by another person without permission from the person having the right to register it;

2.It is published in the form of a scientific presentation by the person having the right to register it;

3.It is displayed at a national exhibition of Vietnam or at an official or officially recognized international exhibition by the person having the right to register it.

-An invention shall be deemed to be of an inventive nature if, based on technical solutions already publicly disclosed by use or by means of a written description or any other form either inside or outside Vietnam prior to the filing date or the priority date as applicable of the application for registration of the invention, the invention constitutes inventive progress and cannot be easily created by a person with average knowledge in the art;

-An invention shall be deemed to be susceptible of industrial application if it is possible to realize mass manufacture or production of products or repeated application of the process which is the subject matter of the invention, and to achieve stable results.

For registration procedures, after the application was filing, it will go through 02 phases of examination:

-The application will be examined formality from 1-3 months. If the application meets the formality criteria according to the law, NOIP will issue the decision on accepting the formality of the application. Then, it will be published on Industrial Property Official Gazette within 02 months from the date of issuing the above decision.

-Then, when having the request, the application will go through a substantial examination within 12-16 months. If meeting the protection criteria as mentioned above, NOIP will issue the Patent to applicant.

However, the actual examining period will be shorter or longer than as regulated.

In case of authorizing ANT Lawyers as IP agent in Vietnam, the client needs to provide the following documents:

-Name and address of the applicant;

-Name and address of inventor(s);

-POA to ANT Lawyers;

-Specification, Figures and Claims of the patent;

-Priority documents (if any);

-Other related documents.

ANT Lawyers - A Law firm in Vietnam is supported by a team of experienced patent, trademark, design attorneys with qualification and skills handling full range of legal services relating to intellectual property rights in Vietnam.  We have specialized in the preparation and registration of patents, trademarks and designs for our clients.

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Condition, Procedures and Period of Patent Registration in Vietnam

Before applying the patent registration, applicant needs to find out the matters related to conditions, procedures and period from the time of submission the application until granting the protection title when registering a patent to avoid the cases that National Office of Intellectual Property in Vietnam (NOIP) may issue the notification on denying examination due to not meeting criterias or non compatible dossiers.

Register invention in Vietnam

According to Law on Intellectual Property in Vietnam, a patent needs to satisfy 03 following criterias to be protected:

-An invention shall be deemed novel if it has not yet been publicly disclosed by use or by means of a written description or any other form either inside or outside Vietnam before the filing date or the priority date, as applicable, of the invention registration application.

-An invention shall be deemed not yet publicly disclosed if it is known to only a limited number of persons who are obliged to keep it secret.

-An invention shall not be deemed to have lost its novelty if it is published in the following cases, provided that the invention registration application is filed within six (6) months from the date of publication:

1.It is published by another person without permission from the person having the right to register it;

2.It is published in the form of a scientific presentation by the person having the right to register it;

3.It is displayed at a national exhibition of Vietnam or at an official or officially recognized international exhibition by the person having the right to register it.

-An invention shall be deemed to be of an inventive nature if, based on technical solutions already publicly disclosed by use or by means of a written description or any other form either inside or outside Vietnam prior to the filing date or the priority date as applicable of the application for registration of the invention, the invention constitutes inventive progress and cannot be easily created by a person with average knowledge in the art;

-An invention shall be deemed to be susceptible of industrial application if it is possible to realize mass manufacture or production of products or repeated application of the process which is the subject matter of the invention, and to achieve stable results.

For registration procedurds, after the application was filing, it will go through 02 phases of examination:

-The application will be examined formality from 1-3 months. If the application meets the formality criteria according to the law, NOIP will issue the decision on accepting the formality of the application. Then, it will be published on Industrial Property Official Gazette within 02 months from the date of issuing the above decision.

-Then, when having the request, the application will go through a substantial examination within 12-16 months. If meeting the protection criteria as mentioned above, NOIP will issue the Patent to applicant.

However, the actual examining period will be shorter or longer than as regulated.

In case of authorizing ANT Lawyers as IP agent in Vietnam, the client needs to provide the following documents:

-Name and address of the applicant;

-Name and address of inventor(s);

-POA to ANT Lawyers;

-Specification, Figures and Claims of the patent;

-Priority documents (if any);

-Other related documents.

ANT Lawyers - A Law firm in Vietnam is supported by a team of experienced patent, trademark, design attorneys with qualification and skills handling full range of legal services relating to intellectual property rights in Vietnam.  We have specialized in the preparation and registration of patents, trademarks and designs for our clients.

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