Vietnam rises up the IP rankings

 

The U.S. Chamber of Commerce released its Global Innovation Policy Center (GIPC) annual report. Vietnam jumped among Asian country's score for IP protection. The report uses a variety of indicators to measure 53 countries. Although ranked relatively low, Vietnam jumped the most, up to 42nd position below Singapore, Philippines and Malaysia but above Thailand and Indonesia. 

A variety of improvement factors were cited: legislation that increased IP damages awards, participation in many international IP treaties (e.g. the CPTPP), stronger penalties for commercial scale IP infringement, growing integration with international IP platforms like the E.U.-Vietnam Free Trade Agreement, long-standing efforts to coordinate IP enforcement, using a comprehensive strategic approach to national IP policy, increasing IP registration volumes. Weaknesses remain in protection of life science patents with a challenging enforcement environment, gaps in copyright protection, including for online infringements, high physical counterfeiting rates and rampant online infringement, alongside generally poor enforcement with penalties insufficient in practice as well as administrative inaction.

Vietnam's National Assembly will ratify the Vietnam-EU free trade agreement at next meeting meeting, announced the Minister of Industry and Trade Tran Tuan Anh this week. It contains an extensive IP chapter. 

There is no doubt of the political will to improve IP in Vietnam; the main challenges appear to be practical and local implementation.

The Vietnam-EU FTA

2019 should see the Vietnam Europe Free Trade Agreement come into effect. The final text was agreed and the EC Commission approved then it was sent to the EU council for signature (during which time each Member State reviews it) and finally it will be submitted to the European Parliament for adoption probably by mid 2019.  The EU Singapore FTA is slightly more advanced and due to adoption in early 2019 too.

The Agreement contains a so called TRIPs+ IP chapter. That means the provisions go beyond the WTO TRIPS agreements. Whilst this is sometimes criticized as being to much for developing countries to bear (e.g. in enforcement), in many cases it provides more useful detail on existing TRIPS obligations.

Key provisions include the following:

a. A large number of provisions mirror TRIPS, restating obligations sometimes with a little more detail. In other cases, it covers areas where TRIPS is silent (such as freedom to choose parallel import regimes)
b. Performers, phonogram/sound recording and broadcast copyright is strengthened. Vietnam's own music industry will welcome this.
c. Anti circumvention and rights management provisions are included. This is intended to prevent music and film piracy.
d. Artists' resale rights are provided.
e. Trademark non-use is extended to 5 years 
f. Extensive GI provisions are set out. Vietnam is a relatively active proponent of GI protection and registers many GIs. A large scale reciprocal registration system will occur under the FTA. there are transitional provisions for certain contentious GIs like Feta and Champagne.
g. Designs provisions require Vietnam to join the Hague Agreement (generally felt to be helpful in SEA by reducing cost) and allows dual copyright protection for designs.
h. Patent term extensions where marketing delays occur are permitted (a provision that access to medicines advocates dislike).
j. Regulatory test data protection is required (again disapproved by access to medicines advocates), to protect innovator test data submitted in the marketing approval process. (Technically TRIPS intended to cover this but its provisions never worked.)
k. Extensive provisions to improve civil IP litigation are included. these are likely to be helpful in an emerging IP system such as Vietnam's where court system weakness is often cited as a problem. Important additional remedies include right to information, proper damages, legal costs and published decisions.
l. Clearer internet ISP liability, injunction and safe harbour provisions should improve online enforcement - often cited as a concern.
m. Border enforcement improvements are mandated. In fact Vietnam has a functioning IP border protection system, its problems are more a scale problem due to proximity to China (especially the problematic northern land border).

Whilst criminal provisions are not covered (as criminal provisions are not harmonized in the EU), the parties are required to follow TRIPS.  there are also an array of cooperation and technical assistance mechanisms which will likely lead to the EU spending a great deal of time and resources working with Vietnam to improve its IP system from 2020 on.

Vietnam's new competition law

In June 2018, a new Competition Law was passed to replace the 2004 law. It takes effect in July 2019. Antic competitive practices by local and foreign entities, including public bodies are covered including offshore practices that harm competition in Vietnam. the law will be regulated by a new National Competition Committee (NCC) and  Competition Investigation Agency (CIA) both under the Ministry of Industry and Trade. Anti-comparative contracts and economic concentration and market abuse are the main thrust of the law.  IP contracts, and control of IP will likely be areas that could affect IP holders.

VIetnam's IP law amendments

 

The fourth amendment to the IP laws of Vietnam came into force on 15th January this week. To do this Circular No. 16/2016 was issued in June 2016 by the Ministry of Science and Technology (MOST) amending Circular No. 01/2007. This is the typical way that laws are amended in Vietnam by amendments to amendments.

 

Most of the changes relate to IP registration procedures at the National Office of Intellectual Property (NOIP). They inclide in relation to office actions, appeals, refusals, deadline compliance, PCT national phase entry, trademark disclaimers, Madrid based trademark procedures, definition of and specification for industrial designs.  

 

The new definition for designs is "A product being understood as an object, device, equipment, means, or part thereof for assembly or integration into a product, manufactured by any industrial or handicraft method, having a clear structure and function, circulated independently."

Social media advertising in Vietnam

In countries without fully operating democracies, the conflict between freedom of speech and IP rights sometimes comes to the fore. 

In Vietnam, Decree 72 on social media bans information that it deems anti-government, damaging to national security or which destroys national unity.  A battle has been brewing for some time due to fast growing social media use. In Vietnam citizens are wary of criticizing the government but the first social media protest did erupt 2 years ago over protection of trees in the capital Hanoi. Two years on, after the decree, what would be considered illegal content is becoming more widespread.

So the government is seeking to prohibit businesses from supporting these sites through their advertising. They are specifically targeting YouTube, Facebook and other social media whom they say publish "toxic" anti-government information. First state-owned dairy Vinamilk and Vietnam Airlines withdrew adverts. Then the information and communication minister spoke with a number of foreign companies including the Unilever, Ford and Yamaha to request them to halt YouTube advertising. He alleged there are over 8,000 anti-government videos on YouTube, of which only 42 had been partially blocked by the site owner Google.

Computerized ad placement systems target ads to specific audiences so advertisers rarely know or control what content is shown with their ads. Google says it does review blocking requests from governments carefully. Industry groups like the Asia Internet Coalition have started that the open nature of the internet is where its value lies. Vietnam, without the vast resources China has, has been unable to build a firewall, to block content it doesn't like. Finally now social media's free speech basis is running into conflict with a government that seeks to control how its citizens and others convey their thoughts about the country and its government.

EU Vietnam FTA signed

On 4 August 2015, after three years and several rounds of negotiation, the European Union – Vietnam Free Trade Agreement (“EVFTA”) officially established principles for the basic content of the Agreement.

 

The EVFTA is a comprehensive and advanced Agreement, balancing rights and benefits for both parties whilst simultaneously complying with WTO regulations. The main content of the Agreement includes Trade of Goods, Principles of Origin, Customs, sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT), Trade of Services, Investment, Trade Defence, Competition, State Owned Corporation, Government Procurement, Sustainable Development, Capacity Build and Cooperation, Legal Matters, and Intellectual Property.

 

The major elements of the agreement are Tariff Reductions and Facilitation of Trade in Services and Investment. The Intellectual Property section commits Vietnam to a high level of protection beyond the standards of the TRIPS agreement. The IP sector of this Agreement includes copyrights, patents and other commitments related to pharmaceuticals and Geographical Indications (GI).  When the EVFTA takes effect, 169 of the EU’s GIs will be protected in Vietnam and 39 of Vietnam’s GIs will be protected in the EU, all of which are for agricultural products and foodstuffs. This aspect facilitates some types of Vietnamese agricultural product branding activities in the EU. This Agreement also allows new GIs to be added in the future. In the pharmaceutical sector, data protection will be improved and there will possibly be a patent extension of up to two years available in the event of delays in obtaining marketing authorization.

 

The intention is also that EU innovations, artworks and brands will be better protected against infringement through stronger enforcement provisions in Vietnam.

 

Although at present only principles have been agreed, so we are still awaiting the final legal texts, the EVFTA is being heralded as a ‘win-win agreement’ to boost trade activities and strengthen relations between the EU and Vietnam.

Impersonating the IP office in Vietnam

Vietnam's National Office of IP (NOIP) has issued a Notice saying that there are people impersonating NOIP officers, sending emails and making phone calls to businesses about IP. They are coercing them into registering IP, asserting that there are pending applications similar to their IP which may be registered unless the IP holder files a new application. This is a typical scam in Asia most usually seen by Chinese domain name registrars. The NOIP has officially published their contact details so people can directly contact the NOIP. 

 

The Trans-Pacific Partnership and IP

The controversial Trans-Pacific Partnership (TPP) is still off and on. TPP negotiations in Washington this week on various free trade matters including IPRs broke down again.  The TPP is an initiative from the United States which aims to grow trade and investment in Asia-Pacific. The partners are Australia, Canada, Chile, Japan, Mexico, New Zealand, Peru and from SE Asia, Singapore, Brunei, Vietnam and Malaysia.

Controversially the TPP includes stronger standards for IPR protection and a number of emerging 21st century IP issues. However its application to emerging economies is worrying many people.

The TPP agreement previously made the news for the wrong reasons. Secretive, unbalanced, leaked by Wikileaks, contentious and so on. It includes a number of emerging markets including like Vietnam which have IP systems far less developed than the others and perhaps not able to cope with sophisticated issues.

Areas of international public concern relate to medicines, publishers, ISPs, criminal offences and biological patents. They include:

restrictions on the making of ‘temporary copies’ of copyright works in electronic form

• allowing the patentability of surgical methods
• placing limitations on access to affordable medicines
• making ISPs responsible for policing copyright infringement
• lengthening the term of copyright protection.

Criticism from the online community has been directed towards the so-called hard line approach being taken by the US. The access to medicines lobby complain that these provisions will harm public health. So far the draft chapter seen from the WikiLeaks release is complex and convoluted. The negations are broken but not over yet.

 

Vietnam seeks to hire foreign R&D talent

A new Vietnamese Government decree is coming into force which will enable overseas Vietnamese and foreign experts to be hired as leaders of science and technology organisztions and projects in Vietnam.  In a bid to help prioritize research and development, the Vietnamese government is seeking to attract expertise from abroad. They will simplify visa, work and family procedures in a bid to attract talent.

The key conditions for such overseas Vietnamese and foreign experts include that that they own patents or plant varieties in relation to key technologies that Vietnam wishes to encourage, or that they have held relevant R&D management positions.

Vietnam has been building a catalogue of policies to encourage R&D, having seen how weak it's technology position is in SE Asia - see here for more details.

Weak R&D in Vietnam

A report by Vietnam's Ministry of Science and Technology (MST) helps to show why innovation levels are so low - as IP Komodo has reported by the paucity of Vietnamese patent filings globally - see here.
 
MST says that about 2,000 organizations in Vietnam have R&D activities; in 2011 Vietnam had 134,780 R&D workers. Many are support staff with only 105,230 doing scientific research; half at universities where most are also lecturers. As such the real numbers on full time research are much lower at 67,223 - that is a ratio of 0.0007 per million people; a fraction of the 4,650 in the US (in 2007), 936 in China (2011), 5,451 in South Korea (2010), Singapore 6,307 (2010) and Malaysia 1,643 (2011).

Vietnam also spends less on R&D. Vietnam’s GERD (Gross domestic expenditure on research and development) was USD $0.25 billion - a ratio of expenditure on GDP of 0.21 percent. Again a fraction of the US - 2.77 percent in 2011 and China - 1.84 percent in 2011.

Patent filings do indeed appear to reflect reality.