by Russin & Vecchi's lawyers

PROTECTION OF INTELLECTUAL PROPERTY

Increasing demand for protection of intellectual property rights ("IPRs") from foreign investors and the requirements of the BTA and WTO have resulted in some positive action in Vietnam towards recognizing and protecting IPRs.

6.1 Current legal framework

The IPRs recognized in Vietnam are as follows:

  1. Copyright of literary, artistic and scientific works; copyright related rights of performances, audio and visual fixation, broadcasts and encrypted program-carrying satellite signals;
  2. Industrial property rights, comprising inventions, industrial designs, layout designs of integrated circuits, trade secrets, trademarks, trade names, and geographical indications;
  3. Plant varieties and plant reproductive materials.

These rights are regulated by the following domestic laws and international agreements:

Domestic laws:

  • Civil Code 2005, effective January 1, 2006;
  • Criminal Law (Articles 156, 157, 158, 170, 171 on sale and manufacture of counterfeit goods in violation of regulations on granting title for protection of industrial property rights and in violation of intellectual property rights).
  • Intellectual Property Law, effective July 1, 2006 ("IP Law").
  • Law on Amendment of the IP Law, effective January 1, 2010;.
  • Decree 56/2006/ND-CP of the Government (June 6, 2006), providing guidance on administrative measures in culture and information sectors.
  • Decree 100/2006/ND-CP of the Government (September 21, 2006), detailing and guiding the implementation of a number of articles of the Civil Code and the IP Law regarding copyright and related rights.
  • Decree 103/2006/ND-CP of the Government (September 22, 2006), guiding implementation of several provisions of the IP Law.
  • Decree 122/2010/ND-CP of the Government (December 31, 2010), amending several provisions of Decree 103/2006/ND-CP.
  • Decree 104/2006/ND-CP of the Government (September 22, 2006), guiding implementation of several provisions of the IP Law in respect of plant varieties.
  • Decree 88/2010/ND-CP of the Government (August 16, 2010), guiding implementation of several provisions of the IP Law and the Law on Amendment of the IP Law, and supplementing several revisions of the IP Law in respect to plant varieties.
  • Decree 105/2006/ND-CP of the Government (September 22, 2006), guiding implementation of several provisions of the IP Law in respect of protection of intellectual property rights and of State management in the field of intellectual property.
  • Decree 119/2010/ND-CP of the Government (December 30, 2010), amending several provisions of Decree 105/2006/ND-CP.
  • Decree 172/2007/ND-CP of the Government (November 28, 2007), revising and supplementing a number of articles of Decree No 57/2005/ND-CP (April 27, 2005) on penalties for administrative violations in the field of plant varieties.
  • Decree 47/2009/ND-CP of the Government dated May 13, 2009, on sanctions against administrative violations in the field of copyrights and related rights.
  • Decree 109/2011/ND-CP of the Government dated December 2, 2011, amending Decree 47/2009/ND-CP on sanctions against administrative violations in the field of copyrights and related rights.
  • Decree 97/2010/ND-CP of the Government dated September 21, 2010, on sanctions against administrative violations in the field of industrial property.
    • Circular 37/2011/TT-BKHCN of the Ministry of Science and Technology dated December 27, 2011, guiding implementation of several provisions of Decree 97/2010/ND-CP September 21, 2010.
    • Circular 01/2007/TT-BKHCN of the Ministry of Science and Technology dated February 14, 2007, guiding implementation of several provisions of Decree 103/2006/ND-CP.
    • Circular 13/2010/TT-BKHCN of the Ministry of Science and Technology dated July 30, 2010, amending several provisions of Circular 01/2007/TT-BKHCN.
    • Circular 12/2007/TT-BVHTT of the Ministry of Culture and Information dated May 29, 2007, guiding implementation of Decree 56/2006/ND-CP on administrative measures in culture and information sectors.
    • Circular 01/2008/TT-BKHCN of the Ministry of Science and Technology dated February 25, 2008, guiding grant and revocation of Industrial Property Examiner License and Industrial Property Examination Business License.
    • Circular 04/2009/TT-BKHCN of the Ministry of Science and Technology dated March 27, 2009, amending several provisions of Circular 01/2008/TT-BKHCN.
    • Circular 18/2011/BKHCN-SHTT of the Ministry of Science and Technology dated July 22, 2011, amending several revisions of Circular 01/2007/TT-BKHCN dated February 14, 2007, which is amended by Circular 13/2010/TT-BKHCN dated July 30, 2010; and amending several revisions of Circular 01/2008/TT-BKHCN dated February 25, 2008, which is amended by Circular 04/2009/TT-BKHCN dated March 27, 2009,
    • Joint Circular 01/2008/TTLT-TANDTC-VKSNDTC-BCA-BTP dated February 29, 2008, guiding examination of penal liability for acts of infringing upon intellectual property rights.
    • Circular 01/2008/TT-BKHCN dated February 25, 2008, guiding grant and revocation of Intellectual Property Examiner License
    • Joint Circular 02/2008/TTLT-TANDTC-VKSNDTC-VVHTT&DL-BKHCN-BTP dated April 3, 2008, guiding settlement of disputes in the field of intellectual property.
      • Decision 11/2008/QD-BTC of the Ministry of Finance dated February 19, 2008, guiding collection and use of fees in the plant variety sector.
  • Decree 154/2005/ND-CP of the Government (December 15, 2005), detailing implementation of a number of Articles of the Customs Law regarding Customs procedures, inspection and supervision of import and export goods.
    • Circular 44/2011/TT-BTC dated April 1, 2011, instructions on enforcement of anti-counterfeit goods and protection of intellectual property in the field of Customs.

International agreements:

  • Paris Convention for the Protection of Industrial Property;
  • Patent Cooperation Treaty (PCT);
  • Madrid Agreement concerning the International Registration of Marks;
  • Madrid Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks;
  • Berne Convention for the Protection of Literary and Artistic Works;
  • Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations;
  • International Union for the Protection of Plant Varieties;
  • Brussels Convention relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite;
  • Phonograms Convention for the Protection of Producers of Phonograms against Unauthorized Duplication of their Programs;
  • Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement);
  • Bilateral Agreement between the Socialist Republic of Vietnam and the United States of America on trade relations;
  • Agreement between the Socialist Republic of Vietnam and the United States of America on cooperation in the field of science and technology; and
  • Agreement between the Socialist Republic of Vietnam and Switzerland on intellectual property and on cooperation in the field of intellectual property.

6.2 The BTA between the Socialist Republic of Vietnam and the United States of America

By entering into the BTA, Vietnam has agreed to treat American IPR holders no less favorably than it treats its own IPR holders with regard to the acquisition, protection, enjoyment, and enforcement of IPR and any benefits derived therefrom.

6.3 The TRIPS Agreement

To become a member of the WTO in 2007, Vietnam agreed that intellectual property matters will be governed in accordance with the TRIPS Agreement. As a matter of interest, we attach an Appendix which summarizes the contents of the TRIPS Agreement.

6.4 Enforcement of IPRs in Vietnam

When a company's IPRs (including patents) are infringed, it can follow either administrative or judicial procedures in order to enforce its rights. Judicial procedures may entail either civil or criminal procedures. Each procedure has its advantages and also its shortcomings, which are discussed below.

In either procedure, the following steps are required:

  • Collect evidence on infringement: place of sale, manufacture, etc.;
  • To the extent possible, identify the infringer;
  • Send warning letter to infringer.

6.4.1 Administrative procedures

The State bodies involved in administrative procedures include:

  • Local inspectors of the Ministry of Science and Technology ("MOST").
  • Market Control ("MC"), an office under the Ministry of Trade. It has the right to seize, confiscate or destroy infringing products. The MC can also impose administrative fines on infringers.
  • Economic Police ("EP"), under the Ministry of Public Security, have the right to apply enforcement measures and to impose administrative fines on infringers.
  • Provincial or cities' customs offices.

When infringement is thought to have occurred, an IPR holder files with any of the above authorities a request to act against the infringement. The request must be accompanied by proof of infringement.

If an intellectual property right is infringed, one of the principal penalties, a warning or a monetary fine of up to VND300,000,000, is imposed. Besides the principal penalty, one or more additional penalties may be imposed, depending on the severity of the infringement: removal of the infringing labels and seizure of the infringing goods or facilities; revocation of the business license or suspension of the infringer's business activities; destruction of infringing articles which are harmful to human health or detrimental to society; etc.

In practice, and in the current environment, the use of administrative procedures is the most efficient way to deal with an infringement. It is more simple and cost-effective than judicial procedures. However, there are several principal shortcomings of administrative procedures:

  • MC, EP, and Customs usually base their actions on a decision on infringement. In the past, decisions on infringement were issued by the National Office of Intellectual Property ("NOIP"). However, after the effective date of the IP Law on July 1, 2006, the NOIP no longer issues such decisions. It may make an exception at the request of an enforcement body, but not for the IPR owner. Without a decision on infringement, an administrative action usually cannot move forward, and no other authority has been authorized to provide a similar decision which is also binding. So far, the question of how to use administrative procedures to enforce intellectual property rights without the NOIP's decisions on infringement is unresolved. Recently a private commercial organization, the Vietnam Intellectual Property Research Institute ("VIPRI"), has been established to consult on issues such as infringement. Others may follow. However, an opinion on infringement from such a body is not legally binding. Nevertheless, the existence of such private bodies will help fill the gap left when NOIP ceased to provide decisions on infringement.
  • To follow administrative procedures, one cannot claim compensation for damages. Damages can only be determined by a court.
  • Administrative sanctions are not strict enough to prevent new violations.

6.4.2 Civil procedures

If the problem cannot be solved through administrative procedures, an IPR holder can bring an infringer to the Civil Court. The rights holder does not have to apply administrative procedures first. It can bring the matter immediately to the Court.

The IPR holder files a complaint against the infringer in a provincial court where the alleged infringer is located. The complaint must be accompanied by documents that prove the ownership of the intellectual property right and the proof of infringement.

Before the hearing, the Court is required to attempt conciliation between the two parties. If the infringement cannot be solved, a hearing usually takes place within six months from the date the Court receives the complaint. During the intervening period, both parties submit their written arguments.

If the parties attend, and there is no postponement, then the matter is usually heard and dealt with at that one hearing.

If one of the two parties does not agree with the Court's judgment, then, within 15 days after the judgment is issued, that party may appeal to the Supreme People's Court whose decision will be final. A Court can order damages. It can also force an infringer to cease its violation, to make a public apology and to pay damages.

Seeking civil procedures takes more time and effort than following administrative procedures; however, in most cases, the outcomes are not necessarily better. This is due, in a large part, to the lack of experience of judges who deal with intellectual property issues. In addition, in the past, judges usually based their judgments on the opinion of the NOIP (in some cases, when a court requests, the NOIP can provide an opinion on whether there is an infringement) which is an administrative body. See our discussion of the current problem above. The initial response from the NOIP will certainly provide a good indication of how the Court will decide. The only noticeable advantage of judicial over administrative procedures is that a court can order the infringer to compensate the IPR holder for damages. However, under Vietnamese law, it is difficult to establish damages.

6.4.3 Criminal procedures

6.4.3.1 Criminal liability for infringement

In serious cases, infringement of other people's IPRs is subject to criminal liability. The Criminal Code deals with infringement of copyrights and other types of IPRs. Depending on the seriousness of the infringement, criminal liability is subject to a fine of VND50-500 million (currently about US$2,400 to US$24,000) or non-detention for up to two years. If the infringement is committed in an organized manner, or committed repeatedly, the infringer can be fined from VND400 million - 1 billion or be imprisoned for a period from six months to three years. In addition to the principal penalties above, the infringer may also be subject to additional penalties: (i) monetary fine from VND20-200 million (about US$950-9,500); and/or (ii) ban from holding certain posts, practicing certain occupations or doing certain jobs for up to five years.

Article 156 of the Criminal Code also provides that counterfeiters or persons trading in counterfeit goods, depending on the seriousness of the infringement, can be imprisoned for a period from six months to 15 years. Article 157 of the Criminal Code provides that capital punishment can be imposed if the counterfeit goods are foods or pharmaceuticals. In addition, the infringer may also be subject to additional penalties (i) monetary fine from VND5-50 million (about US$240-2,400); (ii) confiscation of part or all the property; and/or (iii) ban from holding certain posts, practicing certain occupations or from doing certain jobs for up to five years.

6.4.3.2 Theft

One risk for a company is theft of products of high value. Briefly, persons who commit theft can be imprisoned from 2-7 years if the stolen goods are valued from VND50-200 million; from 7-15 years if the stolen goods are valued from VND200-500 million; and from 20 years to life if the stolen goods are valued from VND500 million and up.

6.4.4 Enforcement of intellectual property rights at the border

An IPR holder can request the Customs Office to suspend normal customs procedures at the border for the import or export of goods it suspects violate its IPRs. The request is filed with the provincial Customs Office through which the suspected goods are being exported or imported. The request must be accompanied by documents that demonstrate ownership of the IPRs and proof of infringement. The IPR holder is also required to deposit an amount equal to 20% of the value of the suspected goods. If the IPRs are found to have been infringed, the deposit will be returned. Customs will suspend its normal clearance procedures relative to the suspected goods for 10 days from the date the provincial Customs Office issues a Decision of Suspension. This period of suspension can be extended for another 10 days.

If an IPR has been infringed, one of two principal penalties can be imposed on the infringer: a warning or monetary fine (up to VND20 million). Besides the principal penalty, depending on the severity of the infringement, the provincial Customs Office can also impose additional penalties, such as seizure of the infringing goods or facilities, revocation of an import-export license, or destruction of infringing articles which are harmful to health or detrimental to society.

Enforcement of IPRs at the border has several shortcomings: inadequate means to determine if goods are counterfeit, lack of detailed procedures, poorly motivated customs officials, corruption, and low penalties.

6.5 Current attitudes and prospects

While Vietnamese law on the registration of IPRs conforms with international norms, the protection of IPRs does not yet satisfy the expectation of manufacturers and IPR holders. In many cases, enforcement needs to be conducted promptly; however, delay is usually due to time-consuming procedures and to the lack of human resources of enforcement bodies. Those elements undermine efforts against counterfeiters, especially against small counterfeiters. Small counterfeiters with a small amount of equipment have mobility and often disappear before enforcement bodies discover them.

Even so, there are signs that Vietnam wants to deal more severely with IP violators. Monetary fines imposed on actions that infringe IPRs in respect of inventions, industrial designs, and layout designs of integrated circuits have been modestly increased. Governmental Decree 97/2010/NDCP (September 21, 2010) has increased the maximum fine from VND300,000,000 to VND500,000,000. Articles 156, 157 of the revised Criminal Law increased penalties for the sale and manufacture of counterfeit goods.

One matter that remains unresolved is the lack of a mechanism to recognize well-known (or famous) marks in Vietnam. The common way that an owner of a well-known trademark tries to have its trademark recognized is to file a complaint with the NOIP, when its application for the mark is rejected based on a prior applied/registered mark or when it wishes to oppose the application of a new mark. The complaint or opposition must be accompanied by several required documents or proof. If the complaint or opposition is successful, the owner's mark will be recognized as well-known. In that case, the application of the prior applied mark will be rejected and the registration of the prior registered mark will be cancelled.

6.6 Domain names

Domain names are protected under the Law on Information Technology, number 09/2006/L-CTN, dated July 12, 2006, and other regulations.

Registration of domain names is based on the basis of "first registered, first protected". Conflicts in the field of domain names are mainly settled by negotiation between parties.

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.