On February 1, 2001, the Government issued Decree 06/2001/ND-CP ("Decree 06") approving the amendments of and additions to Government Decree 63/CP dated 24 October 1996 ("Decree 63/CP")1, a key legal instrument for industrial property rights in Vietnam. Decree 06 came into effect on February 16, 2001.
Various existing provisions of Decree 63/CP have been amended or added under Decree 06. Those amendments and additions are viewed positive so as to further bring the industrial property system of the country in line with the international level. Particularly, the changes have been made in accordance with the requirements of TRIPs Agreement and also the recently signed Bilateral Trade Agreement between the US and Vietnam2. Substantially, the amendments and additions cover the following areas:
- Appellations of origin of goods
- Appeals/oppositions proceedings
- Assignment and licensing of industrial property rights
- Infringements of industrial property rights
- Rules for IP law firms.
In addition, Decree 06 clarifies some provisions of Decree 63/CP which are vague and inappropriate.
Under the additions to Art 2 of Decree 63/CP, the new concepts for "associated mark" and "well-known mark" are introduced.
"Associated mark" means similar or identical trademarks registered in the name of the same applicant and used for similar or related goods/services or for those of the same types. Accordingly, an associated mark may be construed as a series of marks although applications for a series of marks have not been accepted in Vietnam. Decree 06 is silent about the specific procedures for application for and grant of registrations for associated marks. It is therefore assumed that a trademark certificate must be obtained for each of the associated marks, as normal.
"Well-known mark" means a trademark used unceasingly for prestigious goods/services, thus making such goods/services widely known.
In association with these new concepts, Decree 06 provides for specific provisions for protection of well-known marks, assignment and licensing of well-known marks and associated marks. According to the amendment to Art 8 of Decree 63/CP, it is expressly stated that the rights to a well-known mark shall be established on the basis of Decision of Recognition of Well-known Trademark issued by the National Office of Industrial Property of Vietnam ("NOIP"). Furthermore, the rights accorded under such a decision shall be protected perpetually from the date on which the mark is recognized well-known in that decision.
Regarding the assignment or licensing of the above two types of marks, the amendments to Art 38 of Decree 63/CP on the requirements of assignment and licensing provides that: (i) an associated mark must be assigned or licensed simultaneously with other associated marks; and (ii) the assignment or license of a well-known mark must secure the prestige of the goods or services bearing such a mark.
Given the new regulations on protection of trade secrets, geographical indication, trade names and anti-unfair competition3, Art 6/1(f) of Decree 63/CP, which provides one of the criteria for trademark protection, is also amended. According to this amendment, a trademark, to be eligible for registration, must not be identical with or confusing to a protected tradename of another person, or a protected geographical indication (including appellations of origin of goods). Previously, geographical indications were not covered in this criteria.
Appellations Of Origin Of Goods
Pursuant to the amendment to Art 9.2(e) of Decree 63/CP, the term of protection of appellation of origin of goods is now unlimited from the date of issuance of the Certificate of the Right to Use Appellation of Origin of Goods, instead of 10 year term with the possibility to be renewed unlimitedly as previously stipulated under Decree 63/CP.
The addition to Art 14.3 has broadened the persons entitled to seek registration of appellations of the origin of goods. Under the added Art 14.3(d), all individuals or organizations doing business in the locality associated to an appellation of origin of goods, or administrative agencies in charge of management of such a locality, may file an application for registration of that appellation of the origin of goods.
With the amendments to Art 18 of Decree 63/CP, not only applications for patents, designs and trademarks but also applications for appellations of the origin of goods are published under the IP Gazette as issued by the NOIP, provided that such applications are accepted to be legitimate.
Non-patentable Subject Matter Added
Under the amendment to Art 4.4 of Decree 63/CP, "biology natured processes for the production of plants and animals (except for microorganism processes)" are added to those subject matters excluded from patentability under this Art 4. This amendment also clarifies that the non-patentable subject matter "processes for the prevention, diagnosis and treatment" is restricted to those for human and animals.
Conversion of Applications for Invention Patents into Applications for Utility Solutions and vice versa
Previously Decree 63/CP only provided for the possibility to convert applications for invention patents into applications for utility solution patents. Now, pursuant to the amendment to Art 13 of Decree 63/CP, it is also possible to convert applications for utility solution patents into those for invention patents, i.e. in reverse order. Furthermore, it is specifically added that, at any time before expiry of the substantive examination of the application in question, the applicant may ask for conversion of the application for invention patent into the application for utility solution patent and vice versa. According to the old rule under Decree 63/CP, which remains unchanged, it only provides that during the 3 month period from the date of refusal to grant the invention patent, the applicant may submit a request for conversion of the application for an invention patent into the application for a utility solution patent.
Prior User’s Rights
Art 50 of Decree 63/CP on prior user’s rights is amended to limit and make clear those rights. The amendments to Art 50 of Decree 63/CP now stipulate that a prior user of an invention, utility solution or industrial design shall be entitled to prior user’s rights4, if before the filing date of the application (instead of the date of publication of the application as previously regulated) for the invention, utility solution or design in question, he or she has used the invention, utility solution or design independently of the applicant.
The transfer of the prior user’s rights is a little bit relaxed under the amendments which provide that the prior user’s rights may be transferred, provided however that the rights are transferred in association with the entire business facility where the prior user’s rights are exercised.
Pursuant to amendments to Art 27 and Art 28 of Decree 63/CP, the appeals/oppositions proceedings have been clarified to a great extent, including provisions on those entitled to submit appeals/oppositions, procedures and time limits for lodgment of appeals/oppositions.
The amendments to Art 27 of Decree 63/CP provide that the following persons are entitled to file an appeal against the NOIP in respect of refusal of acceptance of an application or refusal of granting a certificate or patent:
- Applicants for titles of protections;
- Applicants for registration of international marks through the Madrid Agreement;
- Applicants for recognition of well-known marks; and
- Any third party with rights and/or interests directly involving the grant of title of protection, acceptance of international registration of trademarks and recognition of well-known marks.
The appeals/oppositions are classified into the first and the second. The first appeal shall be addressed to the NOIP. In case of disagreement with the NOIP’s response or settlement, the appellant may appeal further to the Minister of Science, Technology and Environment (MOSTE – being a supervising body of the NOIP) or initiate a lawsuit against the NOIP under administrative procedures5.
For the first appeal, the appellant must submit his or her appeal to the NOIP within 90 days from the date of receipt or awareness of the NOIP’s notice of refusal. In respect of international registrations of marks, the time limit is 5 years from the effective date of the international registration in question (i.e. the date on which the international registration is published in WIPO’s gazette). Specially, regarding well-known marks or where applicants obtain IP rights on bad faith, then appeals or oppositions may be lodged at any time during the term of validity of the respective international registration of mark or the title of protection in question.
Within 30 days (or 45 days in complicated cases) of receipt of the appeal/opposition, the NOIP shall be responsible for responding to the appellant in writing.
In case of the second appeal, the appellant must submit the appeal to the MOSTE or initiate the lawsuit within 30 days from expiry of the term for handling the first appeal if it is not yet resolved by the NOIP, or from the date of receipt or awareness by the appellant of the NOIP’s decision or response to the first appeal.
The MOSTE must respond to the appellant within 45 days (or 60 days in complicated cases) from the date of receipt of the second appeal.
Cancellation of Title of Protection
The significant clarification is made under the amendment to Art 28.2(e) of Decree 63/CP, that is related to the applicable laws in case of cancellation of patents or certificates. It is expressly stated now under this amendment that the validity of a title of protection shall be cancelled if it is proved that the title of protection has been issued not in compliance with the laws in force at the time of issuance. In the past, Decree 63/CP is silent on this point, thus making it unclear which laws shall be applicable to determine a title of protection has been lawfully granted.
Assignment And Licensing
Further Liberalization of Assignment and Licensing Rules
Assignment and licensing rules are further liberalized under amendments to Art 41 of Decree 63/CP. Accordingly, the assignment or licensing agreements of IP rights are no longer subject to the MOSTE’s approval as the case in the past, where one of the parties to the agreement is a State owned or has part of its capital contributed by the State. Assignment or licensing agreements are now required to register with the NOIP only to be legally effective and binding.
Another key change is the removal of the provision that the assignment or licensing fee is subject to the minimum or maximum price imposed by the State, where one of the parties to the agreement is State owned or funded. The price and mode of payment for assignment or licensing is to be mutually agreed by the parties. However, it should be noted that, the amendments to Art 41 of Decree 63/CP states that the price and mode of payment must be in compliance with the technology transfer rules 6.
Non-voluntary Licence Rules Relaxed
The rules for non-voluntary licences are substantially changed according to the amendments to Art 51 of Decree 63/CP. The amendments are to relax and clarify the rules for grant of a non-voluntary licence. The owners of IP rights shall be forced to grant non-voluntary licences only in cases provided in Article 802 of the Civil Code, namely:
- Nonuse of the IP object or use thereof but not compatible with the demands for socio-economic development of Vietnam, without justifiable reason;
- The petitioner for the non-voluntary license had tried by every means to negotiate with the IP owner with a reasonable price, but the IP owner rejected to enter into a licence; or
- The non-voluntary licence is required for national defence and security, prevention and treatment of human diseases, or other urgent needs of the society.
The amendments to Art 51 of Decree 63/CP makes it clear that the first case above shall be not applicable during the period before expiry of the 4 year term from the filing date of the application for the title of protection, and before expiry of the 3 year term from the date of issuance of the title of protection.
More importantly, it is required under these amendments that a non-voluntary licence must meet certain conditions, which shall be stated in the Decision of Grant of Non-voluntary Licence as issued by the MOSTE, including:
- Non-voluntary licence shall be non-exclusive;
- Non-voluntary licence must be limited to the scope and term sufficient for the objective of granting such a licence;
- The licensee of a voluntary licence is prohibited from transfer of the licence to another party, except for the case the licence is transferred together with the business establishment utilizing such a licence provided however sub-licence is not allowed; and
- The licensee of a non-voluntary licence must pay a fair amount of fee as if it would have been granted voluntarily.
The Decision of Grant of Non-voluntary Licence shall be published in the IP Gazette within one month from the signing date.
The licensor or licensee of a non-voluntary licence shall be entitled to appeal to the MOSTE. In addition, the licensor may request for cancellation of the non-voluntary licence if the situations which serve as grounds for granting such a licence no longer exist and are unlikely to re-occur, provided that the cancellation does not cause damage to the licensee of the non-voluntary licence.
Infringements Of Industrial Property Rights
Exceptional Cases to Infringement
The amendments and additions to Art 52 of Decree 63/CP have provided for clarifications and guidelines for those exceptional cases that are not considered as infringements as set out under Article 803 of the Civil Code. In particular, those cases under which the use of IP objects without the consent of the IP owner shall not constitute an infringement, include:
- Use of protected IP objects not for commercial purposes;
- Use of the products that are introduced into the market by the IP owner or his/her licensee, the licensee of a non-voluntary licence, prior user, including foreign markets;
- Use of IP objects in vehicles or means of transportation which are in transit or temporary in Vietnam, for the purpose of securing the normal operation of such means.
It is noted that, for the second case above, previously under Decree 63/CP and the Civil Code, it just provides that the use of the products that are introduced into the market by the IP owner, prior user or the licensee shall not be considered as an infringement. But now pursuant to the amendments to Art 52 of Decree 63/CP, the term "market" also includes foreign markets. As such, the parallel import is free from infringement.
Actually, this addition has been made to be in consistent with the provisions under Circular 825/2000/TT-BKHCNMT of the MOSTE dated 3 May 2000, effective as of 18 May 2000 ("Circular 825") on the implementation of Government issued Decree 12/1999/ND-CP on Penalties against Administrative Violations in Industrial Property. Item 8.1, Circular 825 states that, among other cases, the "use of or conducting commercial activities (import, sales, storing for sales, offer for sales, advertisement for sales) in respect of the products that have been put into market by the industrial property owner (including foreign markets)" shall not be considered as an infringement of IP rights. Circular 825 goes on to detail this exceptional case by providing that the following activities shall not constitute infringements:
- Trading products or commodities which have been supplied to the IP owner or his licensee, irrespective of whether the supply is performed in Vietnam or abroad (Exhaustion of Rights); and
- Importing the products or commodities which are not supplied by the IP owner, his licensee, distributors or subsidiaries (Parallel Import).
Infringements Acts Detailed
According to the amendments to Art 53 of Decree 63/CP, the following acts are also considered as infringements of IP rights:
- Use of an industrial design which is not substantially different from the protected design;
- Use of a sign that is identical with the protected trademark under a certificate of trademark registration or under an international registration for similar goods/services or for goods/services related to those claimed under the registration; and/or use of a sign that is similar to the said trademark for goods/services of the same kind, goods/services which are similar or related to the goods/services claimed under the registration of that trademark, provided that the use is likely to cause confusion in terms of origin of goods;
- Use of a sign that is identical with or similar to a well-known mark, or the sign in the form of translation, transliteration, transcription from such a well-known mark, for any goods/services including those which are not of the same kind, nor similar to and neither related to the prestigious goods/services bearing the well-known mark, if the use is likely to cause confusion in terms of origin of goods or to mislead the relationship between the user of the said sign and the owner of the mark which has been recognized well-known.
Rules For IP Law Firms
In the implementation of the Law on Enterprises7 (particularly removal of various business licences), the MOSTE issued on November 16, 2000 Official Letter No. 3433/BKHCNMT-PC, according to which IP law firms (or industrial property service organizations as called in Vietnam) are no longer required to obtain the Certificate of Industrial Property Service Organization in order to practice IP services (as previously required under Decree 63/CP). This Certificate was issued by the NOIP.
Given the above, the rules for IP law firms under Decree 63/CP have been amended pursuant to the amendments to Art 55, Art 58, Art 59 and Art 61 of Decree 63/CP. Though not subject to the Certificate of Industrial Property Service Organization as issued by the NOIP, IP law firms must still meet certain conditions, including:
- Being a Vietnamese legal entity;
- Being a non-foreign invested organization;
- Having the function to conduct industrial property representative services as stated in the Corporate Charter and Business Registration (similar to Certificate of Incorporation);
- Having at least 2 professional members (i.e. IP agents or attorneys) holding Certificate of Industrial Property Agent, of them one is the head of the organization or is authorized by the head of the organization to represent such an organization.
Like in the past, the NOIP is still the competent State authority which authorized to hold examinations and grant Certificate of Industrial Property Agent for patent & trademark agents in Vietnam.
The amendments and additions to Decree 63/CP show continued efforts and determination of the Vietnamese Government to improve its intellectual property system to international standards. In general, the amendments and additions introduced under Decree 06 are positive to create a more effective and transparent legal framework for industrial property rights in the country. Efforts are being made by the Government to issue further legislation, especially for enforcement of intellectual property rights, in order to perform the commitments of Vietnam under international treaties.
1Decree 63/CP provides for detailed provisions on industrial property rights under Part 6, Chapter II of the Civil Code..
2We have reported the major contents of the Agreement in IP Asia, Oct 200, Vol 13, No. 8.
3Government Decree 54/2000/ND-CP dated October 3, 2001, effective on October 18, 2000, on the protection of the industrial property rights related to trade secrets, geographical indications, trade names and anti-unfair competition.
4This is considered to be among exceptional cases to patent rights.
5According to the Ordinance on Procedures for Administrative Cases dated May 21, 1996 of the Standing Committee of the National Assembly, those individuals or organizations are affected by an administrative act or decision may initiate a lawsuit at the administrative court against the State agency who exercised the act or issued the decision.
6Under the current technology transfer rules (i.e. Government Decree 45/1998/ND-CP dated July 1, 1998 on technology transfer and MOSTE’s Circular No. 1254/1999/TT-BKHCNMT dated July 12, 1999), technology transfer is defined to include assignment or licensing of IP objects, and notably the royalty for technology transfer (including assignment or licensing IP objects) shall not exceed 5% of net sales price (or 8% in special cases).
7The Law on Enterprises, No. 13/1999/QH10 dated June 12, 1999 and effective as of January 1, 2000. This is very important law which has greatly affected the business climate for local businesses in Vietnam. The corporate laws in Vietnam are considerably liberalized under this Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.