The
current laws on the protection of intellectual property rights ("IPR") consist
of the following:
(i)
Constitution of the Socialist Republic of Vietnam of 1992 ("Constitution").
(ii)
Criminal Code 1999 ("Criminal Code").
(iii)
Paris Convention on the Protection of Industrial Property, the Madrid Agreement
for the International Registration of Trade Marks and the Patent Co-operation
Treaty.
(iv)
Agreement between The United States Of America and the Socialist Republic Of
Vietnam on Trade Relations (effective as of December 2001)
(v)
Civil Code effective as of 1 July 1996 ("Civil Code").
(vi)
Governmental Decree No. 63/CP of October 24, 1996 detailing the regulations on
industrial property as amended by Decree No. 06/2001/ND-CP dated I February
2001 ("Decree 63").
(vii)
Governmental Decree No. 12/1999/ND-CP of 06 March 1999 providing for treatment
of administrative violations relating to industrial property ("Decree 12") with
reference to Ordinance on the Handling of Violations of Administrative
regulations (1995).
(viii)
Governmental Decree No. 54/2000/ND-CP dated 3 October 2000 on the Protection of
Intellectual property rights upon Business Secrets, Geographical Indications,
Trade Names and Protection of Rights against Unfair Competition Relating to
Industrial Property ("Decree 54").
(ix)
Government Decree 01/CP dated 3 January 1996 on sanctions against violations of
administrative regulations in the field of trade
(x)
Circular No. 3055/TT-SHCN dated 31 December 1996 issued by the Ministry of
Science, Technology and Environment providing procedures for industrial
property ("Circular 3055").
(xi)
Circular No. 30/2003 dated 05 November 2003 issued by the Ministry of Science,
Technology providing procedures for establishing IP rights of invention &
utility solutions ("Circular 30").
(xii)
Circular No. 30/2003 dated 05 November 2003 issued by the Ministry of Science,
Technology providing procedures for establishing IP rights of design ("Circular
30").
(xiii)
Circular No. 825/2000/TT-BKHCNMT dated 3 May 2000 providing for sanctions
against administrative violations in the field of industrial property
("Circular 825") as amended by Circular No. 49/2001/TT-BKHCNMT dated 14
September 2001.
II.
Objects protected under industrial property laws
II.1
Registered objects
Under
Vietnamese laws, the following Industrial Property ("IP") objects may be
protected by registration:
(i)
Inventions (for both products and process) are protected by patent and are
valid for 20 years from the filing date.
(ii)
Utility solutions (for both products and process) are protected by patent and
are valid for 10 years from the filing date.
(iii)
Industrial designs are protected by patent for 5 years from the filing date,
and are renewable twice for a period of five years each.
(iv)
Trademarks are protected by a certificate of registration valid for 10 years
from the filing date. They are renewable for unlimited periods of 10 years
each.
Certain
trademarks may be officially recognised as "well known" trademarks if they are
used continuously for prestigious products or services, and as a result of
which they have widespread recognition. Well known trademarks enjoy-better
protection in Vietnam in terms of duration and infringement.
After
successful completion of the procedures for official recognition, well-known
trademarks are protected indefinitely without any need for renewal. Any
confusing imitation of a well-known trademark, even in other languages and/or
for other goods, may be deemed an infringement of that well-known trademark.
(v)
Appellations of origin protected by a certificate of registration are valid
forever.
The
above objects are only protected after registration with, or recognition by the
National Office of Industrial Property ("NOIP") under the Ministry of Science,
Technology and Environment.
II.2
Unregistered objects
II.2.1
Automatic Protection
Automatic
protection is provided in Decree 54 for the following objects:
(i)
Business secrets;
(ii)
Geographical indications;
(iii)
Trade names; and
(iv)
Rights against unfair competition relating to IP.
II.2.2
Criteria to maintain protection
These
objects are protected if they satisfy certain criteria, and are protected for
so long as certain criteria are maintained.
For
business secrets: (i) it has to be uncommon business information; (ii) it has
to be capable to create some advantage for its holder; and (iii) must be kept
under secret.
For
geographical indications: (i) there has to be information on the geographical
origin of goods; and (ii) the quality, reputation or other characteristics of
the goods are mainly due to the geographical origin.
For
trade names: (i) there is a business title in the form of words with or without
numbers; and (ii) it has to be capable of distinguishing this business from
others operating in the same field.
Rights
against unfair competition relating to IP prevent the illegal use of
"commercial indications" of other parties or the appropriation/use of
"investment achievements" of other parties. Under Decree 54:
"commercial
indications" means the signs and information to provide commercial guidance to
commodities and services, including trademarks, commercial names, business
logos, business slogans, geographical indications, goods packaging designs,
goods labels ...; and
"investment
achievements" means the knowledge and information in the form of technologies,
inventions, utility solutions, industrial designs, technical knowledge,
business secrets ... obtained from financial or intellectual activities")
These
objects can be protected against third parties only if the holders can prove
that they satisfy all the relevant criteria.
III.
IPR and infringement
III.1
Rights of IP owners
Article
796 of the Civil Code provides that owners of IP objects, excluding
appellations of origin, have the-following rights:
(i)
an exclusive right to the use of the IP objects, (b) a right to transfer the IP
objects to another person for that ,person's use; and (c) a right to demand
that the competent State authority compel any person who has infringed another
person's property rights to cease such acts of infringement and compensate the
holder of the IP for damages.
III.2
Infringement of IPR
Acts
of infringement are defined in Article 805 of the Civil Code to include the
following, if committed without the authorisation of the IPR owners:
III.2.1.
Inventions/utility solutions:
(i)
Making products under inventions/utility solutions that are protected in
Vietnam;
(ii)
Using, importing, advertising and circulating products which are manufactured
under inventions/utility solutions that are protected in Vietnam; or
(iii)
Applying methods which are protected in Vietnam as inventions/utility
solutions.
III.2.2.
Industrial designs:
(i)
Making products under industrial designs that are protected in Vietnam; or (ii)
Importing, selling, advertising or using products manufactured under industrial
designs that are protected in Vietnam for commercial purposes.
III.2.3.
Trademarks:
(i)
Affixing a trademark, that is protected in Vietnam and owned by another person,
or a similar trademark on the package of another person's product; or (ii)
Importing, selling or offering a product affixed with a trademark, that is
protected in Vietnam, on the Vietnamese market.
III.2.4.
Business secrets:
(i)
Illegal access to, or collection of, business secrets owned by the IPR holders,
(ii)
Disclosing or using business secrets without the permission of the IPR holders;
(iii)
Contravening contracts on confidentiality in order to access or collect
business secrets; or
(iv)
Illegally accessing or collecting business secrets from administrative bodies.
III.2.5.
Geographical indications:
(i)
Using any commercial indications that can be confused with protected
geographical indications;
(ii)
Using any commercial indications identical or similar to protected geographical
indications for identical or similar or associated goods, even if accompanied
with justifying words such as "method", "type", "kind", "adapted from" or
similar words; or
(iii)
Use of geographical indications for wine or hard liquor not originating from
the indicated territories, even if accompanied with justifying words such as
"type", "kind", "form", "adapted from" or similar words.
III.2.6.
Trade names:
Use
of commercial indications that are identical with or similar to protected trade
names for identical or similar products/services causing confusion- about
business entities, business establishments and/or business activities under
those trade names.
III.2.7.
Unfair competition:
(i)
Using commercial indications to mislead people about business entities,
business establishments, business activities, or goods and services; or
(ii)
Misappropriating and using the investment achievements of other people without
their permission.
III.3
Restrictions
IPR
cannot be enforced against:
(i)
prior users;
(ii)
non-commercial users;
(iii)
users within a means of transport while in transit, e.g. ship or plane .etc.
(iv)
the circulation and/or use of products having been put in the market (including
foreign markets) by the IPR holder, prior user or licensee.
IV.
Legal action in the event of infringement
The
owner-of the IP rights, a representative who is present in Vietnam,
or an authorised IP agent may exercise the owner's rights. Where the owner
wishes to enforce its rights, the appointment of an IP agent at the outset will
enhance chances of success.
In
cases of infringement, the following steps should be taken:
(i)
obtaining the official conclusion of Vietnam Office of Intellectual property on
the infringement of the owner’s trademark rights, patent rights, etc., is
always the first step which should be done; (ii) Collect evidence (e.g, at
selling places, in factories), since the onus of proof lies entirely with the
owner of the IP rights; and (iii) Identify the infringer(s).
When
samples of the infringing products have been collected and the infringer(s)
identified, there are two possible approaches for further action: (a)
Administrative action; or
(b)
Court process.
IV.1
Administrative action
Administrative
action aims at stopping the infringement, confiscating counterfeit goods and
imposing other administrative sanctions against the infringer(s).
The
owner cannot enforce IP rights himself, but may request the competent authority
of the State to enforce the protected rights. For these reasons, the owner of
IP rights must report in writing the case of infringement to the following
bodies:
(i).
National Office of Intellectual Property ("NOIP") under the Ministry of
Science, Technology for "conclusion of infringement". This is not provided by
law as necessary for the enforcement of IPR, but since NOIP is in charge of
formulating IPR (from receiving applications to examination and granting of
protection titles), its conclusion that there has been an infringement is
decisively important for the elimination of infringement. In cases of
uncertainty, the enforcing bodies often base their actions on the conclusion of
NOIP.
(ii).
Local inspectorate of science; technology and environment.
(iii).
Local Market Management Office ("MMO"). MMO is established in each province to
keep order in the markets. It is empowered to apply enforcing measures, such as
listing, seizing, confiscating and destroying counterfeits or infringing
products. MMO can also impose administrative fines upon infringers.
MMO
is the most helpful body to which the owners of IP rights often resort to for
enforcement of their rights, when they have collected evidence and identified
the infringers.
(iv).
Local Economic Police ("LEP"). Like MMO, LEP exists in each province to prevent
economic crimes. If the owners cannot collect evidence and identify infringers,
they can resort to LEP for investigation and collection of evidence. Like MMO,
LEP may apply measures and impose fines upon infringers. LEP is involved in
rather large and complicated cases, and the cost of involving the LEP is much
higher than MMO. For this reason, IP owners often prefer to use MMO for
enforcement of their IP rights.
(v).
Ministry or local people's committee supervising the infringing enterprise.
(vi).
Customs offices in provinces or cities in case of imported/exported goods.
(vii).
Infringer(s).
In
cases of clear infringement (i.e. the infringing object is identical
and the infringer has been identified):
Upon
receiving a written report from the owner with sufficient evidence, NOIP will
issue a notification to the infringer confirming the ownership of the object
and requiring the cessation of infringing activities. The Inspectorate, MMO,
LEP or people's committees may confiscate counterfeit goods and impose other
administrative sanctions against the counterfeiters.
With
improved awareness of the public on IPR, nowadays the owners in large cities
like Hanoi and Ho Chi Minh City may directly contact the infringer and local
authority in charge of IP, to demand that the infringements cease.
In
cases of doubtful infringement (where the infringing object is only
similar to the protected object):
In
this case it is necessary to examine the extent of similarity. If the
infringing object is officially recognised as distinctive from the protected
one, then there is no ground for further action. The official conclusion of
NOIP in this regard is decisively important. If NOIP concludes that the
infringing object is confusingly similar to the protected one, the owner of the
infringed object will have a legal basis for requesting MMO or other enforcing
authorities to take appropriate measures and impose appropriate fines.
If
the infringing object is identical to the protected object but the infringer(s)
cannot be identified, then sanctions may still be imposed on the sellers of
infringing goods.
These
administrative actions can stop the infringement and may result in confiscation
or destruction of the infringing products, and the imposition of fines upon the
infringers. However, such actions do not resolve the issue of compensation for
damage, which only the court can determine.
IV.2
Court process
Legal
proceeding may be commenced, in addition to the administrative sanctions, to
seek compensation for damage caused by infringement.
A
foreign holder of IP rights in Vietnam may commence court proceedings in either
the People's Court of Hanoi or Ho Chi Minh City. It is advisable to choose the
People's Court of Ho Chi Minh City if the infringer is located in Ho Chi Minh
City or the southern provinces, and the People's Court of Hanoi if the
infringer is located in Hanoi or the northern provinces.
Although
the laws provide for administrative and court actions to be pursued
independently, it is advisable to pursue administrative action before
commencing legal proceedings. Given that IP cases are relatively new to the
Vietnamese judiciary, the observations, comments or conclusions of specialised
agencies (such as NOIP) are considered persuasive.
To
date there has been only a small number of IP infringement cases brought to
court in Vietnam. The majority of cases have been settled through
administrative action, because the administrative procedures take much less
time and effort. The competent administrative authorities are better educated
in IP matters, so they settle cases faster and in a more satisfactory manner.
Courts generally take more time, and the judges depend upon the comments of
administrative bodies before making a judgement. The single advantage of the
courts is that they can settle the issue of compensation, although the courts
often fail to decide upon the calculation of "actual damages" of "intangible"
property.
This
means that court process takes considerably more time and effort than
administrative procedures, for an outcome which is not better. It is hoped
that, along with the development of the IP system and harmonisation with the
global system, Vietnamese courts will gain more experience in dealing with IP
rights, enforcement in general, and compensation for damage of intangible
property in particular.
V.
Possible sanctions and remedies
V.1
Administrative sanctions
Decree
12 provides for the following civil sanctions to be imposed on infringers of
IPR:
(i)
a warning for unintentional violations, or minor first-time violations with
extenuating factors;
(ii)
fines of up to VND 100 million (approximately US$6,700), depending on the
nature and seriousness of the violations;
(iii)
suspension or withdrawal of business licence; or
(iv)
confiscation of the exhibits and/or violation means.
Remedies
provided for in Decree 12 are:
(i)
compulsory removal of violating elements on goods or business facilities, or
compulsory rectification of false information,
(ii)
compulsory destruction of violating articles of inferior quality that may cause
damage to human health; or
(iii)
compulsory compensation for damage caused by administrative violation (by
mutual agreement or not more than VND 1 million (approximately US$67.00).
Temporary
seizure of exhibits and violating means are also provided for in Decree 12 as a
provisional measure for enforcement of IPR.
The
following enforcement authorities are empowered to decide the above sanctions
and remedies:
(i)
People's committees at provincial and district levels;
(ii)
Inspectorate of science, technology and environment;
(iii)
Police, at the district level,
(iv)
Customs, at the border gate level, and
(v)
Market management office, at the provincial level.
Administrative
procedures have proven to be very effective at present, and is the reason why
most IP cases are settled by administrative authorities.
V.2
Criminal sanctions
Article
171 of the Criminal Code of Vietnam provides, in addition to administrative
sanctions, penalties of up to 3 years' imprisonment for infringement of IPR. If
the infringer is convicted of production and/or trade of counterfeiting goods,
a longer term of imprisonment, or even capital punishment, may be applied
pursuant to Articles 156, 157 and 158 of the Criminal Code.
VI.
Parallel imports and enforcement of IPR
VI.1
Legalisation of parallel imports in Vietnam
Parallel
imports refers to the practice of importing goods from a foreign market, where
those goods have been legally produced and marketed.
The
Civil Code does not appear to contain provisions which explicitly legalise
parallel imports. However, Article 805 of the Civil Code and Article 9.1 (g) of
Decree 12 provide clearly that the import of protected articles, without the
permission of the owner, is considered an infringement of IPR. Some exceptions
are provided in Article 803 of the Civil Code, where the circulation and use of
products which have been marketed by the owner or other entitled persons are
not to be considered as an infringement.
The
first time Vietnam dealt with parallel imports thorugh IP legislation was in
May 2000 when Circular 825 was issued. Article 8.1(d) of Circular 825 provides
that the use or conduct of commercial activities (import, sale, storage for
sale, offer for sale, advertisement for sale) without permission of the owner,
in respect of protected articles which have been put by the owner into market
(including foreign market) are considered exceptions to infringement, and
therefore are not subject to administrative sanctions.
A
further development occurred in February, 2001, with the implementation of the
amended Decree 63. This widened the interpretation of Article 803 of the Civil
Code, by providing that the concept of "market" included "foreign market". With
this amendment, Vietnam recognised the concept of "international exhaustion" of
IPR.
VI.2
Ramifications of parallel imports on enforcement of IPR
Legalisation
of parallel imports makes IPR enforcement much more complicated against sellers
of infringing goods.
MMO,
LEP and inspectorates are hesitant to take action because of parallel imports.
The majority of counterfeits in Vietnam are imported and offered for sale in
shops. Evidence of this is collected through the purchase of counterfeits. Shop
keepers where counterfeits are found will nearly always refer to parallel
imports to justify their sale of counterfeits.
In
these circumstances, the most important point to note is that to allege a
violation of IP laws, it is also necessary to prove that the articles were not
parallel imports, i.e. one must prove that the articles were illegally put into
the foreign market before being imported into Vietnam. This may be difficult to
establish, since it is hard for the IP rights holder in the importing country
to collect evidence in the exporting country where exports are, as a rule,
encouraged by local authorities.
With
the legalisation of parallel imports, legally imported goods (including
counterfeits) are "immune" from possible allegations of infringements of IPR.
Given
these problems, one recommended legislative measure would be to shift the
burden of proof from the IPR holder to the seller of suspected imported
counterfeits. In such a case, the seller would be required to prove that the
goods were parallel imports, otherwise the seller would be subject to sanction.
