Vietnam: Overhaul Of Intellectual Property System In Vietnam

Since Vietnam embarked on the economic reforms and opening its door to foreign trade and investment over ten years ago, protection of intellectual property rights (IPR) has been increasing important and drawing more attention of business community and the public in general. Especially in some recent years, along with the process of the globalization and regionalization of Vietnam (joining ASEAN, APEC and applying for WTO), Vietnam has attached much importance to the IPR protection, and actually made considerable progress to bring its intellectual property system in line with the international standards and norms.

Though staring just a decade ago in 1989, marked by the introduction of the Ordinance on Protection of Industrial Property Rights, the intellectual property law is one of the fastest development areas of laws in the country. After the 1989 Ordinance, the Government issued a series of regulations for protection of patents, trademarks, designs and copyrights. However, the most noted development of the IPR regime in Vietnam is the Civil Code passed by the National Assembly in 1995 and took effect from 1July 1996. For the first time, various regulations on IPR have been codified in the Civil Code which governs, among others, major respects regarding IPR from patents, trademarks to copyrights, technology transfer. Under the Civil Code and its implementing regulations, significant changes have been made toward compliance with the international standards, especially the Agreement on Trade Related Aspects of Intellectual Property under WTO ("TRIPs"). For example, the term of protection of an invention has been increased to 20 years from 15 years in the past; a trademark registration shall be cancelled on the basis of any consecutive non-use; procedures for copyright registration have been regulated, etc.

In the context of the infant market economy in Vietnam, it can be said that Vietnam has went comparatively fast in building its intellectual property regime, though a lot of work needs to be done if it wants to fully enter into the world economic arena where certain common rules must be abided by.

As mentioned above, the laws on IPR of Vietnam are comparatively progressive and in line with the minimum international standards in the field. However, this is only one side of the coin when we look into the "paper" laws. It is agreed by all that the IPR protection will make no sense if IPR holders are not secured by an effective and reliable IPR enforcement system. The following points will reveal the shortages and weaknesses of the IPR system in Vietnam against the background of international treaties and agreements and widely accepted norms in the world. The general tendency and the objective of regional as well as international economic groups in respect of IPR in the international trade are to effectively protect IPR on the principles of Normal Trade (NT) and Most Favored Nation status (MFN), accordingly general standards for IPR protection, procedures for IPR establishment and measures for IPR enforcement must be adopted. As a general rule nowadays, TRIPs is quoted as the objective of the IPR protection of international and regional groups and most countries. TRIPs sets minimum required standards for all member countries of WTO so as to secure an affective and full IPR system. Those standards include NT and MFN, standards for specific IP objects such as patents & copyrights, standards for the IPR enforcement system, standards for establishment and maintenance of IPR.

Although the Civil Code and its guiding regulations are a significant step forward of the IP laws, the current laws lack regulations on protection of certain important IP objects as required by TRIPs, namely layout designs of integrated circuits, undisclosed information including trade secrets and repress of unfair competition. This absence makes it unable for IPR holders to solve infringements of their IPRs. Taking La Vie trademark as an example, ten of imitated marks similar to the registered trademark La Vie appear on the market and cause confusion to consumers and detrimental to the owner’s reputation, but the current laws do not provide an sufficient legal basis for the registered owner to stop the imitations. Also a lot more faked products with similar trade dress but unresolved due to lack of sufficient legal framework.

Under the existing regulations, geographical indications are not fully protected as mandated by TRIPs, but only protect appellations of origin in a limited scope. Geographical indications other than appellations of origin such as signs featuring the origin country or locality of goods and those of wines and spirits are not protected.

In terms of trademarks and designs, the scope of protection under Decree 63/CP on industrial property is narrower than that required TRIPs. Vietnam commits to protect well-known trademarks as under Article 6bis of the Paris Convention, unfortunately the current rules are silent on what is qualified as a well-known mark, thus proving a well-known mark is much dependant on the subjective opinions of the National Office of Industrial Property (NOIP).

Microorganisms and microbiological processes are covered by the current patent rules, however in the absence of the specific regulations on application filing, examination and deposition, so those objects are not yet protected.

The protection of plant varieties is insufficient in that the exclusive rights to plant varieties created are not recognized for the time being. Creators of plant varieties are protected by Certificates of Plant Variety Creator for the term of 15 years from the filing date of the application. Apart from moral rights, the creator shall be entitled to remuneration paid by users, nevertheless the exclusive rights belong to the State. This system clearly discourages the creative activities.

In the copyright field, the current laws are also silent on protection of computer programs and data files, term of protection for performers, rights to fixation, reproduction of fixations and rebroadcasting of broadcasts, rental of phonograms, the right to communication to the public of performance of dramatic, dramatic-musical and musical works, as stipulated by TRIPs. Article 776 of the Civil Code restricts the rights of authors of those works already publicized in relation to performance of dramatic, dramatic-musical and musical works and recording of musical works, thus contrary to Article 13 of TRIPs. The stipulation under the Civil Code that the copyrights over anonymous works shall belong to the State is also not in compliance with Article 9.1 of TRIPs.

As far as IPR enforcement is concerned, the prevailing laws lack specific regulations on effective and sufficient civil, administrative and criminal procedures and remedies for IPR enforcement as required by TRIPs. TRIPs places special emphasis on the IPR enforcement by requesting that member countries must make available effective and strong enough procedures for IPR holders to take efficient actions against any of infringements of their IPRs, including expeditious remedies to prevent infringements and deter further infringements. It is shown by practice that so far most IPR infringements (trademark imitations, copyright piracy, etc.) are most resolved by administrative procedures, however the results are not exhaustive. IPR holders nearly can not secure that whether their IPRs are enforced in practice or not. Though the Government issued Decree 12/1999/ND-CP in March 1999, devoted to enforcement of IPR by administrative procedures, the remedies and measures provided thereunder are not strong enough to stop infringements and deter continued infringements. The Decree also lacks provisions on injunctions to prevent imminent or threatened infringements. During the past years, a few IPR infringements and deputes have been brought to the Court. Also, the Criminal Code provides a limited coverage for criminal offences in respect of IPR infringements. In fact, most of criminal cases relate to counterfeit products in terms of quality, but IPR aspects are not taken into account at all.

Another weakness of the current legislation is that the Ordinance on Settlement of Administrative Cases prevents IPR holders or concerned parties to bring a case to the administrative court, when the administrative decision under the case has been settled by the direct supervising body of the State authority who issued the decision. For example, if an IPR holder appeals against a decision by the NOIP, and he appeals further to the Ministry of Science, Technology and Environment and the case is decided in his disfavor, then he shall by no means institute legal proceedings at the administrative court in opposition to that decision, assuming that the decision is unfair. This is also not in conformity with the TRIPs requirement.

In Vietnam, there are quite a few State agencies involved in and vested with the authority to solve IPR infringements. To name some are the People’s Committees, the Police (Economic Police), the Market Management Bureau, the Inspectors of Science, Technology and Environment and Inspectors of Culture and Information. Unfortunately, there is not any State authority with the central authority and strong enough powers to handle IPR infringements. This system is cumbersome and bureaucratic, with the overlapped functions and powers between those agencies, thus making IPRs unable to know which agency to ask for assistance. In practice, most IPR holders are resolved by the administrative procedures, but it takes much time and efforts to go through such a system, and in many cases the settlement is not effective and exhaustive. The current rules also do not provide clearly the powers of each of the agencies in IPR enforcement.

In relation to the judicial system, the courts have not yet played an active role in settlement of IPR infringements and disputes, like in many other countries. This is attributed to insufficient legal framework, little of experience of court judges both in terms of legal and technical aspects, and also psychology of the Vietnamese people not to bring IPR cases to courts. Unlike other countries, Vietnam does not have a specialized court especially devoted to IPR matters, but the court of jurisdiction is under the People’s Court system, i.e. the civil court, administrative court or criminal court as the case may be.

With the socio-economic development during the past years, IPR as part of business have been drawing more and more attention of the public especially the business community. However, the general public awareness of IPR is still limited, which also cause some obstacles for IPR enforcement. In some cases, IPR infringers even do not realize that they are violating the laws for a simply thinking that they do not understand why IPR holders are entitled to exclusive rights to their creative results.

In the context of Vietnam’s international integration in trade and investment where IPR is an important part, Vietnam must accept common rules in a level playing field. The targets for this are to meet the minimum standards on IPR as part of the process of becoming a member of WTO; to commit to improve the IPR system in trade relations with the United States and other countries; and to gradually harmonize the IPR system with the international standards. To this end, laws and regulations on IPR must be further improved, the system for establishment of IPR must be simplified, cost-effective and less time-consuming, and most importantly the IPR enforcement system must be overhauled to make it effective and fair. In addition, actions must be also taken to improve the public awareness of IPR.

Being aware of the importance role in furthering the development of the economy, the Government are reviewing the current legislation and efforts are being made to overhaul the IPR system in order to bring it in line with TRIPs and other international treaties. In the coming two and three years, the following major activities will be conducted to improve the IPR system:

• New regulations on new IP objects as required under TRIPs will be issued. Those regulations will cover the protection of geographical indications, repress of unfair competition, trade secrets, layout designs of integrated circuits, plant varieties. Some Government agencies have been assigned the task to draft those regulations and it is expected that those regulations will be issued soon. Also in connection with this, regulations on protection of trade names are being drafted.
• Further regulations for IPR enforcement in terms of administrative, civil and criminal procedures will be promulgated to provide a sufficient and effective legal framework for settlement of IPR infringements and disputes. Amendments will be also made to some current regulations toward compliance with TRIPs. There will be regulations on border control and measures to effectively resolve IPR infringements regarding international trade.
• The current IPR enforcement system will be improved to the directions that (i) a specialized court for IPR matters will be established to raise the capacity of the judicial system in this field, and (ii) the administrative agencies involved in IPR enforcement will be simplified to two agencies, namely Customs Offices for border control and the Agency for Management of IPR to be newly set up and in charge inland with central power to handle IPR infringements.

In conclusion, though not in the immediate future, IPR holders may expect that there will be a sufficient legal framework and strong enforcement system that permit and help them to effectively and fairly protect and enforce their IPR.

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.