The TRIPS Agreement recognizes the role of technology in social and economic welfare. The treaty provides WTO member countries with flexibilities for approaching different measures within their legal systems and practices, including, but not limited to, granting compulsory licenses and parallel import licenses, in order to promote public interest goals such as health, nutrition and environmental conservation. It also permits the national governments with similar options to tackle the issues regarding abuses of intellectual property rights by right holders for the purposes of restraining competition, provided that certain requirements are satisfied. Nonetheless, how technology transfer occurs in practice depends a great deal upon how developing countries utilize flexibilities defined under the TRIPS Agreement to promote inflows of technology. Developing countries should take advantage of these flexibilities in an appropriate manner to maximize the benefits of domestic competition and minimize the social costs of adopting a strong IP regime required by the TRIPS Agreement.

In this context, Vietnam provides an interesting case study for developing countries for compulsory licensing and parallel import licensing trends in the technology sector. After a long period of self-isolation, late 1980s Vietnam has openly recognized the importance of international economic cooperation. Hence, like most other emerging economies, Vietnam is still a net importer of technology. Therefore, central issues for the government of Vietnam are (i) how to assess or acquire technology (especially IPR-intensive technology) at low cost and (ii) how to intervene in markets with legitimate measures to help the Vietnamese companies develop indigenous innovation based on imported technology.

This paper aims to provide an overview of the development of IP and competition policies in Vietnam in relation to compulsory licensing and parallel importation with a focus on technology transfer. It aims to demonstrate how Vietnamese policy makers deal with the larger issue of links between intellectual property protection, attracting investment, protecting competition and improving social welfare. The position of the paper is that intellectual property protection affects the inventive behavior of firms and technology transfer in varied ways. The effects of such behavior depends upon factors such as national IP strategies, socioeconomic conditions, cooperation of IP holders with the competent state authorities and other stakeholders, coordination between intellectual property law and competition law, and cooperation between competent state authorities.