Dear Hadrien and Marijn, every now and then I stop by Saigon Square to shop for clothes and knickknacks and what strikes me most every time I go there is the huge amount (and the amazing quality) of the counterfeit goods that are on offer. But where does the Vietnamese law stand in this regard?
Whether it is ‘Nike’ sneakers, ‘Louis Vuitton’ handbags, ‘Ray-Ban’ sunglasses, ‘The North Face’ jackets or the latest model ‘iPhone’ that you are looking for, you can find it all for a bargain in Ho Chi Minh City. your question touches upon a rather sensitive issue for Vietnam – the protection of ‘intellectual property’ (IP).
In Vietnam, IP is protected through the Law on Intellectual Property and its implementing regulations. Vietnam is also a member of various international treaties, such as the TRIPS Agreement under the World Trade Organization, the Paris Convention and the Madrid Agreement. Under Vietnamese law, intellectual property rights are divided into copyrights, rights related to copyrights, industrial property rights, and rights to plant varieties. Even though violations of copyright and patents may be involved as well, the trade in counterfeit goods is most closely related to the infringement of trademarks (popularly known as ® or ™), which fall in the category of industrial property rights.
Unlike copyright, which is established automatically in Vietnam, trademarks can only be established after completing registration procedures with Vietnam’s National Office of Intellectual Property. Registration may take a minimum of 12 months and, once a trademark is registered, it is protected for an extendable period of 10 years. So-called “well-known marks” form an exception to this rule as they are not established through registration, but on the basis of actual market use.
If an infringement occurs, a range of measures is available to the owner of the trademark. They can be administrative (i.e. fines imposed by the relevant governmental authorities, and in certain cases even for the end user of the counterfeit goods!), civil (i.e. a civil lawsuit initiated to claim damages) or criminal (i.e. prosecution in accordance with the Penal Code of Vietnam).
To a large extent, the legal framework in Vietnam is pretty comprehensive and in line with international standards. So far so good, we can almost hear you say. However, the enforcement of intellectual property rights, in practice, can be a bit more of a challenge. While administrative actions can be a convenient way to deal with trademark infringements, the fines imposed are relatively low and there is no possibility to compensate the trademark owner through this avenue.
Alternatively, a trademark owner can start civil court proceedings to receive financial compensation but this option may be less appealing when you bear in mind the length of such proceedings and the inefficiency of the Vietnamese judicial system in general. Perhaps the establishment of a special court for intellectual property rights would be a solution in this regard.
An efficient protection of IP rights is an important factor for the investment climate in Vietnam. Without it foreign investors who are operating in advanced, high-tech industries will be very hesitant to invest in research and development in Vietnam. And as a result the so-called “transfer of knowledge,” something that Vietnam is often seeking, will remain limited.
Given that counterfeit goods in Vietnam are not limited to only handbags and sunglasses, but also items such as motorbikes, food, beverages, petrol and pharmaceuticals, it almost goes without saying that inefficient protection of IPs can even pose serious threats to public health and safety.
Even though it seems to present a rather bleak picture of IP rights in Vietnam, it has to be noted that considerable progress has been made over the past few years. For example, several foreign trademark owners have recently been successful in terminating infringements of their rights. Furthermore, it seems the authorities are stepping up their efforts to improve registration and protection of trademarks in Vietnam. Recent examples include the establishment by the Prime Minister of a National Steering Committee for the fight against smuggling, trade fraud and counterfeit goods in March last year and a Resolution including an action plan that was issued by the Vietnamese government on June 9, 2015 for the same purpose.
This positive tendency may be related to the fact that Vietnam is currently in the process of negotiating several free trade agreements. The EU – Vietnam free trade agreement is noteworthy in this regard, but it seems that IP rights are especially high on the agenda for the so-called Trans-Pacific Partnership. you may want to keep an eye on this because a little peer pressure from powerful negotiating partners like the US and the European Union may be just what is needed to further improve protection of IP rights in Vietnam.
Every month, Hadrien and Marijn answer legal questions from Oi readers. If you have any legal question you want answered, send them to [email protected]