Enforcement of Intellectual Property Rights in Vietnam
The IP Law was passed by the National Assembly of Vietnam on November 19 2005 and came into force on July 1 2006. The new law stipulates copyright, rights neighbouring on copyright, industrial property rights, rights in plant varieties, and the protection and enforcement of those rights. Before the enactment of the new law, basic legislation for IP protection and enforcement was provided in the Civil Code of 1995, and the implementing regulations thereof were scattered in different legal documents in the forms of decrees, circulars, and directives. The new IP Law now gathers up, amends and codifies these regulations in one law, which has a higher legal effect and creates a united, complete and strengthened IP legal framework which is in line with international norms including TRIPS. The new law simultaneously overcomes shortcomings and fills the gaps of the existing IP legal system. It minimizes overlaps and conflicts between different regulations governing IP matters, and makes it easier to implement. It also adds new IP-protected objects, such as integrated circuits, encrypted program-carrying satellite signals and plant variants and makes amendments to relevant provisions. Indeed, the IP Law has taken a leap upward and this can be clearly seen in the following three main aspects:
(i) The provisions on enforcement of IPR in the IP Law are coherently structured and the language used therein is plain and lucid;
- Vital issues related to enforcement of IPR are comprehensively addressed by the IP Law, such as IPR holders' entitlement to fight against infringement, measures against infringement of rights, authorities to deal with infringement of IPR, etc.; and
- The IP Law adopts an explicit approach to each issue. Concrete provisions on administrative and civil remedies applied against infringement of IPRs are explicitly provided, for example provisions on the burden of proof in a civil proceeding, and provisions on evidence related to damages recoverable in a civil proceeding.
With the focus on enforcement, noteworthy points in the new law are discussed below.
For the first time, the new IP Law has underlined measures that IPR holders can take to protect their own rights. IPR holders are now encouraged to use more initiative in safeguarding against infringement. Before reaching any measures, rights holders need to make an assessment of whether infringement of their rights has incurred. (Guidance is provided in Article 201 of the new IP Law.)
Measures that IPR holders may rely on may include:
- technological measures for protecting their rights;
- sending a warning to alleged infringers; or
- taking informal actions, for example organizing a meeting with alleged infringers and asking alleged infringers to voluntarily cease and desist from infringement.
If such measures are effective, IPR owners will be able to save time and money in enforcing their rights; the measures also help competent authorities to save time and resources.
Measures for settlement of IPR infringement
Under the IP Law, IPR holders can rely on the following four measures to enforce their protected rights:
(i) Civil action
A bold emphasis on civil actions is one of the fundamental features of the IP Law. IPR holders are encouraged to protect their rights through civil actions or civil proceedings.
By initiating civil proceedings, an IPR holder can request a competent court to grant civil remedies against organizations and individuals who have committed infringing acts (Article 203 of the IP Law). The remedies will not only enable judiciary authorities to begin judging claims, but also facilitate IPR holders in supervising the enforcement of their rights. Remedies that a competent court is empowered to grant upon IPR holders' request include:
• an order on termination of the act of infringement of IPR(s);
• an order on public rectification and apology;
• an order on performance of civil obligations;
• an order on compensation for damages; and
• an order on destruction or use for non-commercial purposes of goods - infringing goods can only be put in use for non-commercial purpose if infringing elements therein are completely removed.
In a practical sense, a civil action often makes an allusion to a lengthy and expensive proceeding initiated by a court, at the request of IPR holders. Yet, IPR holders may have a more positive view on the IP Law, in terms of enforcement of IPR by virtue of a civil action. The most critical point that can be drawn from the provisions on civil action(s) in the IP Law is that IPR holders will be allowed to proceed with civil actions or remedies in a more effective and timely manner and at a lower cost. We can look at quick preliminary injunction as an example:
The IP Law has made concrete the relevant provisions of the Code on Civil Procedures (Article 102) on provisional measures both to prevent IPR holders from irreparable harms and to secure material evidence. Indeed, more explicit provisions on preliminary injunction(s) allow IPR holders to be in a position to seek a timely remedy for better means of protection of their rights against infringement. Moreover, the procedures under the IP Law seem less cumbersome.
IPR holders are entitled to request a competent court to grant a preliminary injunction at the time of lodging their claim with the court. In this case, the competent court, at its discretion, may immediately come to an order on preliminary injunction without holding any forum or hearing(s) (Article 206.1). Before the enactment of the IP Law, procedures for seeking an injunction order seemed more lengthy because a competent court would not enter into consideration of any request for the order until the relevant case had been formally started in the court records, which normally took a month or more.
The provisional measures (Article 207) that may be ordered by a competent court include seizure, enumeration, sealing and restraints in transfer/disposal of infringing goods (or other relevant evidence). To seek provisional measures (Article 206), IPR holders should prove that in the absence of adequate measure(s),
• there appears a likelihood of irreparable damages sustained by IPR holders, due to alleged infringement; or
• there is a risk that infringing goods or other material evidence pertaining to such alleged infringement is destroyed or cannot be traced.
IPR holders should also guarantee against any damages caused to alleged infringer(s), if their request is eventually groundless; a sum of money equivalent to 20% of the total value of infringing goods or VND20 million (US$1,250), if the total value of such goods cannot be gauged beforehand, should be deposited by IPR holders in such a case.
Under the new IP Law, the proceedings are deemed to be more equitable to both the litigant and defendant: both parties are granted a chance to protect or defend their rights and interests.
By instituting a civil lawsuit, IPR holders can seek damages caused by infringement. The IP Law has adopted a clearer set of bases for calculation of compensatory damages caused by acts which infringe IPR. Apart from this, the IP Law also specifies types of damages (actual damages, mental damages) and a reasonable sum of fees for attorneys that IPR holders can be awarded by a court.
So far no specialized IP court has been established in Vietnam. Disputes in relation to IPR are deemed to be new matters to People's Courts at different levels, especially at the district level. Generally, judges have limited knowledge and experience in handling such disputes. In practice, courts are inclined to consult with IP experts or the governmental agencies responsible for the state management in the IP field (the National Office of Intellectual Property and the Copyright Office of Vietnam) to clarify substantive issues or questions arising from IP-related disputes.
(ii) Administrative action
IP rights are by nature civil rights. Considering this, the government of Vietnam no longer widely enforces IPR by means of administrative measures, as it did in the past. The option of administrative measures against infringement of IPR remains available to rights holders, but, if applied, measures will be subject to stricter conditions.
Under the new law, administrative measures should be applied only in cases involving infringement of IPR causing harm to public- or consumer-interest, recurring infringement of IPR, counterfeits, or infringing labels or packages.
If the ultimate goal of IPR holders is to stop continuing infringement of their rights, an administrative measure is more preferable to their determination or option. Although sometimes administrative actions cannot be initiated as quickly as IPR holders wish due to some of the aforementioned conditions on these actions, they remain the best option in many other cases, for example in the case of counterfeits or infringing goods exerting irreparable harm to consumers or the public.
Agencies which are granted the power to deal with infringement of IPR include the Economic Police, Market Management, customs offices and Industrial Property Inspections. There are other State bodies participating in the fight against counterfeits and infringing goods but not directly involved in any counter-actions against infringement of IPR. These include People's Committees at both provincial and district levels and Ministries including the Ministry of Science and Technology, the Ministry of Trade, the Ministry of Public Security, and the General Department of Customs under the Ministry of Finance.
Pham & Associates takes a lead in IPR enforcement in Vietnam and for many years has had a very close and fruitful cooperation with enforcement forces in almost all provinces of Vietnam in enforcing IPR of clients including Honda Vietnam, Guccio Gucci SPA and Adidas Group. Cases against hundreds of infringing organizations or individuals have been administratively settled, thousands of infringing products or parts of products have been seized, confiscated or destroyed, and fines of many billions of Vietnamese dong have been levied.
(iii) Border controls
Under the new IP Law, IPR holders have the right to request customs offices to monitor and suspend customs clearance of goods, whether imported or exported, across Vietnamese borders. Border controls are deemed to be prompt and intermediate measures that IPR holders can use to bar alleged infringing imports or exports and locate and gather evidence of infringement of their rights. Conversely, IPR holders may be faced with a risk that their allegation is found groundless and that consequently they may be attacked by counter-claims.
Border controls are essentially carried out at IPR holders' request. Customs offices may also exercise border controls against imports or exports on an ex-officio basis, but they exercise this power only on a case-by-case basis when they may be aware of counterfeits.
After the border controls have been carried out at IPR holders' request, the IPR holders will assume the burden of consolidating their allegation before the customs offices, and the offices, in their behalf, will be obliged to determine if the suspected imports or exports infringe the rights concerned. If infringement is determined, the customs offices have authority similar to that of other enforcement forces in handling the infringement.
In performing their task, customs offices should bar the in-flow and/or out-flow of fraudulent goods, but refrain from blocking the flow of goods in international trade. To help customs offices prepare to impose any border controls, concerned IPR holders should gather and submit preliminary evidence of alleged infringement of their rights in relation to suspected imports/exports and even assume liability to pay for any damages due to the IPR holders' fault allegation.
(iv) Criminal measures
Criminal cases are conducted against acts of infringing IPR which have caused serious damages to the public interest. Throughout a criminal proceeding, competent authorities always bear in mind whether an act of infringing IPR would be criminalized. Competent authorities, instead of IPR holders, will have the burden of answering this question.
An IPR holder's request is not a prerequisite for criminal action. Yet, IPR holders may submit a formal complaint to the competent authorities with prima facie evidence establishing the infringement. The competent authorities, including inspectors and prosecutors, will take this as preliminary evidence and will also verify it through their own investigation.
IPR holders retain the right to claim for damages caused by an act of infringing their rights even though such an act has been criminalized. However, if the IPR holders wish to recover their damages in that case, they should submit their claim to a civil court.
Education and training
In the process of enhancing enforcement of IPR, more and more attention is paid to intellectual property education and training provided to enforcement forces. Many enforcement personnel have been sent on relevant domestic and overseas training courses and regular and irregular courses, seminars and conferences for enforcement personnel, enterprises and IPR holders, consumers, or the general public have been organized.
Pham & Associates and Honda Vietnam have organized workshops for enforcement forces and other concerned organizations and individuals in more than ten provinces. Pham Associates is assisting the Business Software Alliance with two workshops on the protection of copyrighted software (the second to be in Ho Chi Minh City on February 29 2008). The target participants are chief judges and judges of civil, administrative, economic and criminal courts at all levels (Supreme Court, provincial and district courts).
About the authors
Dao Anh Tuan is an associate at Pham & Associates. He holds a BA in Economics, a Masters in Development Administration, and Diplomas in Economics of Development and Intellectual Property Law. He is a Registered Copyright Attorney and a Registered Patent & Trademark Attorney.
Pham Vu Khanh Toan is Pham & Associates' managing partner. He holds a BSc in Physics, a BA in Law and a Diploma in Intellectual Property Law. He graduated from the MIIGIK in Russia and Hanoi Law School. From 1985 to 1988, he was an officer of the Vietnam National Office of Industrial Property. He is now a registered patent and trademark attorney and an attorney-at-law.
By Dao Anh Tuan and Pham Vu Khanh Toan of Pham & Associates