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Vietnam : Amendments of The Intellectual Property System Viewed from The Free Trade Agreements (FTAs)

18

JUN

2020

Vietnam began to open and promote economic integration in the late 1980s. Since then, it has persisted in pursuing this goal and considered trade liberalization as an indispensable trend for the economic development of the country.

The first step in this process is to join the World Trade Organization (WTO), marked by the following important milestones: on January 4, 1995 applied for accession to WTO; in August 1996 submitted "Memorandum on the Foreign Trade Régime" to WTO Working Party and also in this year Vietnam started negotiating Agreement between Vietnam and the United States on Trade Relations (BTA) in which the whole Chapter 2 with 18 Articles are commitments on intellectual property rights (IPRs); in July 2000, the BTA was signed and took effect from December 2001; in October 2004 concluded bilateral negotiations with the EU - Vietnam's largest trading partner; in May 2006 concluded bilateral negotiations with the US - the last of 28 partners requesting bilateral negotiations; In November 2006 Vietnam was admitted to the WTO, ending the 11-year process with a series of bilateral, multilateral negotiations and consultations since its application to join in 1995.

Joining WTO means that Vietnam has committed to implement multilateral trade agreements of the WTO, including the Agreement on Trade Aspects of Intellectual Property Rights (TRIPs). To achieve this goal, Vietnam has made efforts to improve the legal system of intellectual property rights, marked by the promulgation of the IP Law on November 29, 2005 (including 6 parts, 18 chapters and 222 articles), came into effect on July 1, 2006). In addition to the guiding provisions of Chapter II of the Civil Code 1995, the IP Law is the first complete legal document of Vietnam which contains sufficient and detailed provisions on IP rights and basically meets most of the common international standards for IPRs protection stated in the TRIPs and BTA.

As a member of the WTO in 2007, Vietnam was forced to quickly revise and supplement the IP Law to be compatible with the provisions on IP rights in TRIPs and BTA. Therefore, in 2009 Vietnam issued Law No. 36/2009/QH12 amending and supplementing a number of articles of the IP Law (often called the amended IP 2009). Some of the key points that can be listed are:

Regarding copyright and related rights

- Extending the term of protection to 75 years for cinematographic works, photographic works, dramatic works, applied art works, anonymous works instead of 50 years; for cinematographic works, photographic works, applied art works which have not been published within 25 years from the fixation, the term of protection is 100 years;

- Specifying cases where the use of related rights is not required to apply for permission but royalties must be paid;

Regarding the rights to plant varieties

- Supplement some contents on rights of organizations and individuals to plant varieties; distinctness and denomination of the plant variety to conform to the UPOV Convention.

About industrial property rights

- Amend and clarify the principle of first filing to ensure that only one protection title is granted to an object to avoid abuse of the right to apply to obtain multiple protection titles for one object;

- Extend the time limit for examining industrial property registration applications to ensure priority under the International Conventions

Regarding IPRs enforcement

- Amending the temporary suspension of customs procedures to comply with Article 55 of the TRIPs Agreement, Article 15.5 of the Vietnam – US Agreement on Trade Relations (BTA);

- Amending regulations on enforcement of IPRs by administrative measures to improve the enforcement of IP rights.

So far (2020) Vietnam has signed 13 regional and bilateral free trade agreements (FTAs) with more than 60 countries, of which the two most important FTAs with many contents related to IPRs are the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) signed in 2018 with 11 countries and the Free Trade Agreement between Vietnam and the European Union (EVFTA) signed in 2019 with 24 member countries of EU. Vietnam is also in the process of negotiating a comprehensive regional economic partnership agreement between ASEAN and six partners (China, India, Japan, Korea, Australia, New Zealand), referred to as RCEP for short.

It is worth noting that the precursor of CPTPP is the Trans-Pacific Partnership Agreement signed by 12 countries including Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam, USA and Japan. on February 4, 2016 in Auckland, New Zealand (often referred to as TPP, or TPP-12). However, a year later, after being elected, US President Donald Trump officially announced his withdrawal from TPP-12. In the process of negotiating to sign TPP-12 before, which is now CPTPP, the commitment on IPRs protection is always one of the most difficult issues to overcome for achieving consensus because there exists significant differences in both the size and level of economic development among CPTPP member states. Although the United States - one of the major trading partners of Vietnam – no longer participating in the CPTPP, the IPRs commitments between the two countries are clearly specified in Chapter 2 of the BTA already signed in July 2000. Currently, the US also mentioned the possibility of returning to CPTPP at an appropriate time.

The CPTPP, EVFTA, RCEP Agreements are often referred to as “new generation” FTA because of the content of deeper and broader commitments, not only confining to tariffs, trade in goods and services, but also dealing with higher and broader commitments such as institutional reform, especially administrative procedures reform, building up an increasingly transparent and open environment for local and foreign investors, etc. Regarding intellectual property rights, CPTPP and EVFTA have some higher requirements than TRIPs. Therefore, when negotiating to join these agreements, Vietnam has committed to continue to improve the legal system in general and intellectual property in particular with a suitable roadmap.

On June 14, 2019, at the 7th Session of the XIV National Assembly, by the abridged procedure [i.e., ignoring some prescribed steps] the National Assembly passed a number of laws, including Law No. 42/2019/QH14 amending and supplementing a number of articles of the Law on Insurance Business and the IP Law, effective from November 1, 2019, in order to internalize the obligations to be enforced promptly as required by the CPTPP Agreement which came into effect for Vietnam from January 14, 2019.

Specifically, regarding the CPTPP, amendments to the IP Law can be summarized as follows:

(i) Mode of filing industrial property right registration applications: is supplemented under Clause 3, Article 89, according to this applications for registration of industrial property rights can be submitted electronically under the online filing system to the NOIP

(ii) Patents:

Regarding the novelty of invention (Article 60):

Amending Clause 3:

"3. An invention shall not be considered as lacking of novelty if it is directly or indirectly disclosed by the person entitled to registration specified in Article 86 of this Law or by the person who has information about the invention under the condition that the patent application is submitted in Vietnam within 12 months from the date of disclosure. (instead of 6 months as before);

Section 4 is added:

The provisions of Clause 3 of this Article shall also be applied to any invention disclosed in the industrial property application or industrial property protection title published by the state administration of industrial property [NOIP] in case the publication is inconsistent with provisions of laws or the application is submitted by a person ineligible for registration”.

On the Inventive step of inventions (Article 61)

2. Technical solution which is an invention disclosed in accordance with Clause 3 and 4, Article 60 of this Law shall not be used as a basis for evaluating inventive step of such invention."

(iii) Trademarks

- Regarding well-known mark (Article 6.3.a)

Industrial property rights to well-known trademarks shall be granted on the basis of their use instead of registration.

- Regarding trademark use obligations (Article 136): Supplementing the trademark owner's obligations to use the trademark; the use of a trademark by a licensee under a trademark licensing contract is also considered as a trademark owner's use.

(iv) Geographical indications

- Clarify the subject matters not protected as geographical indications (Article 80), namely a name, an indication that has become a common name of the goods on the basis of the perceptions of relevant consumers in Vietnam; that are confusingly identical with or similar to a trademark being protected or have been filed under a trademark application with an earlier filing date or priority date;

- Supplementing Article 120ª on recognition and protection of geographical indications under international treaties to which Vietnam is a member.

(v) Effect of licensing contracts (Article 148):

The licensing contract for use of industrial property subject matters shall be effective under the agreement between the parties and need to be registered with the state administrative authority of industrial property rights to be valid for third parties (except for licensing contract of trademark).

(vi) Intellectual property rights protection

- Regarding the right to self-protection (Article 198): To add two new provisions on:

+ The right of the defendant to request the Court to force the plaintiff to pay attorneys' fees or other expenses in the lawsuit of IPR infringement if the defendant is determined by the Court not to commit acts of infringement;

+ Organizations and individuals that suffer damage due to abuse of procedures to protect the intellectual property rights of others may request the Court to compel the abusing party to compensate for damages including reasonable costs of hiring a lawyer.

+ Regarding the grounds for determining the level of compensation for damage caused by infringement of intellectual property rights (Article 205): adding other grounds in accordance with laws for determining damage by the intellectual property right holder;

- Regarding procedures for applying the suspension of customs procedures (Article 218): Supplementing the provisions of the customs offices' obligations to provide information to intellectual property rights holders within 30 days from the date of issuance of the decision to apply administrative measures to handle trademark counterfeiting and pirated goods.

Standards regarding Intellectual Property Rights of EVFTA

The Vietnam - EU Trade Agreement (EVFTA) is a new generation FTA between Vietnam and 28 EU member countries, approved by the European Parliament on February 12, 2020 and by the National Assembly of Vietnam on August 8/6/2020. EVFTA will take effect from August 1, 2020.

The standards [commitments] regarding IPRs in EVFTA are basically consistent with the current laws of Vietnam. However, in some contents of EVFTA, it requires a higher level, or the IP system of Vietnam (including the system of laws, mechanisms for protection and establishment of rights) has not been mentioned or the regulations are not sufficiently specific and need to be supplemented or modified for compatibility include:

+ Most-Favored-Nation Treatment (MFN): EVFTA commits to giving each other's citizens the level of IP protection not less than the protection for citizens of any third country except for exceptions under Article 4 and 5 TRIPS (for instance, protection under international agreements on judicial assistance, protection of rights of performers, producers of phonograms and broadcasting organizations etc. that are not specified in TRIPS). According to this, if Vietnam has committed to a higher level of IP protection for any partners in the subsequent Agreements, it must give the EU partners the same benefits.

+ Regarding geographical indications:

Vietnam undertakes to protect the 169 geographical indications of the EU and the EU will protect 39 geographical indications of Vietnam. All these geographical indications relate to agricultural products and foodstuffs. This is a condition for some outstanding agricultural products of Vietnam to be able to access and affirm their brand in the EU market;

  1. Accepting some exceptions (with specific provisions) for 04 geographical indications on EU cheese ("Asiago", "Fontina", "Gorgonzola" and "Feta") being used in Vietnam as indications with regard to products in the class of
  2. "cheeses" and 01 geographical indication for EU wines ("Champagne") is being used in Vietnam as indication with regard to products in the class of "wines".

+ Regarding trademarks:

EVFTA requires the termination of a registered trademarks:

  1. if within a continuous period of five years, it has not been put to genuine use[1] by its owner or the owner's licensee in the relevant territory in connection with the goods or services in respect of which it is registered without justifiable reasons;
  2. as a result of acts or inactivity of the owner, the trademark becomes the common name in the trade for a product or service in respect of which it is registered;
  3. The use of the trademark is liable to mislead the public, particularly as to the nature, quality or geographical origin of the goods or services.

+ Regarding industrial designs (Article 12.34 to Article 12.37):

Vietnam needs to meet the following requirements:

  1. Acceding to the Geneva Act (1999) of the Hague Agreement Concerning the International Registration of Industrial Designs within two years from the date of entry into force of the EVFTA (recently, on October 1, 2019 Vietnam has completed this task).
  2. There is provision on requirements of the protection for industrial design which is a component part of a product: it must be visible during normal use of the product and meet the requirements of novelty and originality. This provision has not been specifically mentioned in the IP Law.

+ Regarding Patents (Article 12.38 to Article 12.40)

Commitment to provide an adequate compensation mechanism if the effective patent life of pharmaceutical invention is shortened due to unreasonable delay in the processing of the application for circulation of such pharmaceutical. It is considered to be unreasonably delayed if within 24 months from the date of applying for circulation permit, the pharmaceutical management agency has not responded;

The compensation may take the form of an extension of the invention protection term but not exceeding 2 years.

+ Regarding enforcement measures

Some contents of civil and criminal enforcement measures for IPR infringement are particularly emphasized by the CPTPP and/or EVFTA and require Vietnam to have a proper approach and stricter regulations. including:

  1. Criminal handling of acts of intentionally importing or exporting counterfeit trademark goods or pirated goods on a commercial scale;
  2. Criminal handling without a request of the right holder or a third person;
  3. Criminal handling of acts of filming in cinemas causing damages to rights holders;
  4. Competence or destruction or distribution outside a commercial channel; forced destruction at the request of the right holder;

It is clear that the active participation in a series of significant bilateral and multilateral FTAs in recent years has forced the Vietnamese IP system improved to be compatible with international IP standards that are being applied by almost developed countries. Effective protection and enforcement of IP rights is not only an objective requirement of the global economic integration but also a self- requirement for the national economic development and enhancing competitiveness. Although in CPTPP or EVFTA the application of some provisions are suspended or have a transition period for implementation, usually from 3 to 5 years, it is still a big challenge for Vietnam. Overcoming these challenges will create a new face for the IP system of Vietnam.


[1] Genuine use implies real use for the purpose of trading in the goods or services in question so as to generate goodwill. In general, this implies actual sales and there must have been some sales of the goods or providing of the services during the relevant period of time. Use in advertising may amount to genuine use. However, mere

preparatory steps are not to be regarded as genuine use of a mark. Genuine use is opposed to token or artificial use designed solely to maintain the trade mark on the register.

About the Firm

Pham & Associates
Address No.8 Tran Hung Dao St, Hoan Kiem Dist, Hanoi, Vietnam
Tel 84-24-3824 4852
Fax 84-24-3824 4853
Email hanoi@pham.com.vn
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