Highlights of Vietnam’s Amended IP law 2009

Vietnam’s current IP law was passed by the National Assembly of Vietnam on November 19 2005 and came into force on July 1, 2006. The law stipulates copyrights and related rights, industrial property rights, rights in plant varieties, and the protection and enforcement of those rights which is in line with international norms including TRIPS.

In June 2009, the law was amended for the first time to repair a number of deficiencies which were revealed during the three years of its implementation. The amended IP Law came into effect on January 1 2010.

Copyright

Under the existing IP law, broadcasting organisations can use published works for commercial purposes without obtaining permission from the rights owners, provided that they pay a royalty in accordance with government regulations (Article 26.1). For commercial use of published works, the changes reflect a bigger role for the principle of free and voluntary undertaking and agreement in civil transactions, by stipulating that broadcasting organisations should negotiate with rights owners about royalty rate and method of payment (Article 33). If no agreement can be reached, royalty obligations should be carried out in accordance with the government’s regulations. Alternatively, the rights owner is entitled to bring the case to court.

For non-commercial use of published works by broadcasting organisations, while the existing IP law is silent, the amended IP law stipulates that such use is subject to payment of royalty in accordance with the government’s regulations.

In a similar vein, the use of audio and video recordings is divided into commercial and non-commercial uses. For commercial use, the users should initially negotiate with the rights owner about royalty. If negotiations fail, royalty obligations should be carried out in accordance with government regulations, or the rights owner may initiate a civil action as a legal recourse (Article 33.2). Negotiation is not a requirement for non-commercial use but such use is subject to payment of royalties in accordance with government regulations.

Some changes in the amended IP Law are made to bring the Vietnamese IP regime in line with the Berne Convention and the TRIPs Agreement. The term of copyright protection is amended to extend from 50 years to 75 years from the first publication and is applicable to cinematographic works, photographic works and anonymous works. For those cinematographic works, photographic works and applied art works not published within 25 years from the fixation date, the protection term is extended to 100 years from the fixation date of the work (this amends Article 27.2 of the IP Law). This amendment encourages authors and owners to publish their works earlier.The term of protection of dramatic works shall now coincide with the life of the author - fifty years after his death, instead of fifty years from the date of first publication as presently stipulated in the IP law.

Some technical errors in the IP law have been corrected by the new law, including the addition of Article 41.2 stipulating that organisations and persons managing anonymous works shall have the owner’s copyright until the author’s identity is revealed. An inclusion of the word, architectural, corrects an error in Article 14 of the IP law.

The amended IP law is still silent on some important copyright issues, including the liability of internet intermediaries for the use of online materials, the establishment of a comprehensive licence system for the use of copyrighted works as well as various different types of copyright licences. Surprisingly, liability of internet intermediaries for the use of online materials is not included in copyright law, but in the law on information technology. The relevant provisions in the IT Law addressing this issue introduce a safe harbour for internet intermediaries for the use, transmission and storage of digital content, however, they are incomplete. From a practical approach, there is no precedent from which the competent authorities or court may apply these provisions to a dispute of such nature.

In addition, a recent surge in disputes resulting from the use of published works requires regulation of a comprehensive licence system for different use of copyrighted works, including mechanical licences and synchronised licences.

Patents and trade marks

The lawmakers clearly announced their intent by rewording Article 220.3. This Article now provides that, during a transitional period, revocation or invalidation of a protection title shall only be subject to the provisions of the law “applicable to the grant of this title” instead of “valid at the time of its grant” as provided in the past. From the lawmakers’ perspective, this new wording makes clear that the applications for registration of IP rights that have been filed before the effective date of the new law shall be treated under the old law.

The amended law clarifies in Article 90 that the first-to-file principle shall apply in cases where the same person files several applications for patents for (i) inventions which are identical with or similar to each others; or (ii) for industrial designs which are identical or not significantly different from each other, patent shall only be granted to any invention or industrial design under its legitimate application which has the earliest priority date or the earliest filing date among those which satisfies conditions for granting patent (Article 90.1). If all of those applications satisfy conditions for granting of patent and all have the same earliest priority date or earliest filing date, patent will only be granted to one invention that is agreed by all applicants. If no agreement is reached, all applications shall be refused (Article 90.3).

The notion of secret invention appears in the law for the first time. In the amended Article 7(3), governmental regulations restrict the acquisition and exercise of IP right conferred to inventions defined as secret. The new law also states that governmental agencies have the right to register geographical indications and approve the registration of collective marks and certification marks indicating the geographical origin of products (Article 87). With this request, the lawmakers intend to ensure that the state is entitled to manage the named subjects of geographical indications, even when geographical indications are not registered.

Some sections of the IP Law have been changed to improve the quality of the IP regime in Vietnam and applicants should be aware that a new timetable for substantive examination is now in effect. The time limit for substantive examination of patent applications is extended from 12 months to 18 months. Trade mark, industrial design and geographical indication applications shall be examined as to substance within nine, seven and six months respectively, from the publication date. This is in lieu of six months as now applied (this amends Article 119.2 of the IP Law). This can be considered as a step backward in implementing the government’s requirements of speeding up administrative reforms. However, it may be that lawmakers believe this change will benefit IP owners as examiners will have enough time to examine applications more thoroughly.

The filing date or priority date, when applicable, of a patent or design application now serves as the date from which a prior use right to an invention or industrial design is established instead of the publication date as now applied (this amends Article 134.1 of the IP Law). This amendment is intended to bring the patent law of Vietnam into conformity with Article 4.B of the Paris Convention, by which no action taken by a third party during the period of priority might give rise to any right of that third party.

Where administrative remedies are in order for the infringement of IP rights, the amended law removes the limitation that such remedies may only be requested by the IP rights owner after 1) they serve a written warning notice to the alleged infringer and 2) the infringer continues the alleged infringing act (this amends Article 211.1 of the IP Law). But until the Amended IP Law comes into force on January 1 2010, alleged infringers remain enabled to violate IP rights where they are granted enough time to remove evidence of infringement, causing difficulty to the rights owners.

In the amended IP Law, administrative remedies now extend to cover acts of infringement of IP rights that cause losses to authors and IP rights owners, in addition to acts of infringement causing losses to consumers or to society as now provided for in the IP Law. At first glance, this amendment sounds like a new development, but IP rights owners may face increased difficulty in the enforcement of their rights. To be entitled to request application of administrative measures, IP owners must now prove that such infringement has caused them losses in addition to the burden of proving that there is an act of infringement, which was sufficient for applying for appropriate administrative measures before the amendment.

Under the administrative remedies, the monetary fine imposed on an infringer committing IP rights infringement was at least equal to, or even up to five times the value of the discovered infringing goods. At one point, the provision was considered a step in the right direction in preventing IP infringement in Vietnam. The amended IP Law removes this provision. Monetary fines now will be in accordance with the applicable laws on settlement of administrative infringements (Article 214.4 of the IP Law), which allows a maximum fine of D500 million ($26,400). Though the amendment overcomes inconsistencies between the IP Law and the domestic laws on settlement of administrative infringements, it establishes a less effective IP regime from the perspective of rights owners.

To protect the interests of Vietnamese enterprises, the Amended IP Law prohibits foreign law firms and agencies practising in Vietnam from providing IP representation services (this amends Article 154.1 of the IP Law). The National Assembly believes that this amendment conforms to international practice and is within Vietnam’s international responsibilities on IP as stated in National Assembly Resolution no 71/2006/QH11, ratifying Vietnam’s accession to the World Trade Organisation (WTO). But the IP law is now inconsistent with the applicable domestic law on lawyers and the law on investment.

Plant variety rights

Article 3.3 clarifies that besides propagating materials, the notion of plant varieties also includes harvested materials, while Article 4 further adds the definition of such materials to the law. As a matter of fact, the amended IP Law now explicitly extends the rights of the owner of the protection title to a plant variety to the harvested materials derived from the unlawful use of propagating materials of the protected plant variety (Article 186.2). This expansion of rights to the protection title holder brings the Vietnamese IP Law into harmony with Article 14.2 of the Convention of the Union for the Protection of New Varieties of Plants (UPOV), to which Vietnam is a party, and is only limited where the holder was given a reasonable opportunity to exercise his or her rights. Moreover, pursuant to Article 4 of the 1991 UPOV Convention, the Amended IP Law in Article 157 further vests the right to register a new plant variety in entities/individuals of a foreign country not entering into an agreement on plant variety protection with Vietnam. Such entities, however, must have a permanent address of residence or a business or production establishment of plant varieties in a foreign country that has entered into an agreement on plant variety protection with Vietnam.

Amendments to the criminal code

Vietnam’s current Criminal Code was introduced in 1999. The Code was amended in 2009 and came into effect on January 1 2010. Under the amended Criminal Code, with regard to copyright violation (Article 170) and offences of IPR infringement (Article 171), anyone who copies or distributes copyright protected works to the public on a commercial scale without the permission of the copyright owner, or infringes the rights over trade marks and geographical indications on a commercial scale will be subject to a fine of between VND50 million ($2,640) and VND500 million ($26,400) or non-custodial reform for up to two years. Fines will be higher, up to VND1,000 million ($52,800) and/or from 6 months to 3 years imprisonment for organised and or repeated offences. Convicted offenders may also be banned from holding certain posts, practicing certain occupations or doing certain jobs for one to five years.

The amended IP Law 2009 is more in line with treaties and international norms. But the overarching goal that Vietnam should aspire to, that of an IP system that is responsive and workable for the users and holders of IP, is a long way off. The amendments to the IP Law are predictably insufficient in addressing its existing deficiencies because the first and most salient challenge to improving upon the Vietnamese IP regime lies in the country’s ubiquitous law of intellectual property. When the lawmakers attempted to group into a single law the protection of patents, copyrights, trade marks and plant varieties, when they share nothing except the common name of IP, they embarked on a unique experiment. With the recent amendments, Vietnam has made a step toward harmonisation with the IP regimes of developed jurisdictions and created necessary conditions for ensuring its obligations under the TRIPs Agreement.