A Foreign Investor’s Guide to Understanding Intellectual Property in Vietnam

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By Edward Barbour-Lacey

HCMC – Intellectual property (IP) is a key concern for every business, no matter where they are operating. This is no less true in Vietnam – while the country is signatory to numerous IP conventions, there are still many reasons for foreign companies operating there to keep a close eye out for IP violations.  Therefore, it is crucial that foreign investors have a clear understanding of how IP operates in Vietnam and what possible recourses are available should they find themselves dealing with a violation of their property.

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A History of IP in Vietnam

In 2005, Vietnam’s National Assembly passed the Law on Intellectual Property Rights (IPRs); this law was later amended and supplemented in 2009.

In September 2010, in an effort to strengthen the protection of Intellectual Property Rights after entering into the Bilateral Trade Agreement (BTA) with the United States and participation in the World Trade Organization (WTO), Vietnam’s government issued stricter administrative sanctions for violations of industrial property rights, along with some important changes to IP regulations in Vietnam.

Aside from local IP legislation, Vietnam also participates in international IP conventions such as the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Rome Convention, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the World Intellectual Property Organization, the Patent Cooperation Treaty, and the Madrid Protocol.

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Understanding IP in Vietnam

Intellectual property (IP) is generally defined as “a work or invention that is the result of creativity, such as a manuscript or a design, to which one has rights and for which one may apply for a patent, copyright, trademark, etc.”

There are two types of IP: registered and unregistered.  For registered IP, you must apply to have your rights recognized at an official IP organization, such as the Intellectual Property Office in the United Kingdom.  Types of registered IP include patents and registered trademarks. For unregistered IP, you automatically have IP rights over your creation. Types of unregistered IP include copyright, common law trademarks and database rights, confidential information and trade secrets.

Due to the fact that Vietnam joined the WTO in 2007, the country has had to meet the minimum IP standards set out by that organization – this has also meant that IP in Vietnam has many similarities with IP in more developed countries. As such, Vietnam has divided their IP system into three areas:

The NOIP holds the role of chief coordinator and is the agency which, under the aegis of the Ministry of Science and Technology, assumes the functions of exercising state management and providing services in the field of IP. This includes administrating the registration of industrial designs, trademarks, brand names and other industrial property rights, and conducting basic legal appraisals to settle intellectual property disputes.

Before delving into the specifics of each type of IP, it is worth noting that the Paris Convention’s “priority rights” can aid in the local registration of patents, designs, and trademarks by allowing rights previously registered elsewhere to become effective in Vietnam. However, this must be completed within the specified time limit.

Copyright

Registration of copyright is conducted at the National Copyright Office. Copyright IP also applies to computer programs which cannot be patented.  Vietnam copyright IP is governed by the Berne Convention on copyright which states that the minimum protection from publication will be:

  • 75 years for cinematographic works, photographic works, dramatic works, works of applied art and anonymous works
  • 50 years after the death of the author for other works

While no copyright registration is required in Vietnam, most patent experts suggest registering copyrights with the country’s copyright authorities.

Patents

Vietnam’s patent law operates under the “first to file” principal. The country makes a distinction between patents and utility solution patents:

  • Invention patents have a maximum protection of 20 years
  • Utility patents have a maximum protection of 10 years
  • Industrial designs have a maximum protection of five years (however, this is renewable for two consecutive periods of five years)

Individual patent registrations (such as industrial designs and inventions) must take place in Vietnam. However, for patent rights for things other than industrial designs, applications can be handled by the Patent Cooperation Treaty.

Trademarks

The trademark system in Vietnam protects symbols, three-dimensional objects, colors and other visual devices which are used to identify a business’ products or services. Trade name rights are established through use rather than being formally registered. With respect to online domains, these are handled on a first come, first served basis.

  • Trademarks last for 10 years and can be renewed indefinitely for further ten-year periods
  • Registration can take up to 15 months to complete

Trademarks can be registered in Vietnam or by using the Madrid Protocol.

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IP Rights Enforcement

Companies seeking to enforce their IP rights in Vietnam have three options:

  • Administrative action
  • Civil court action
  • Criminal prosecution

Most IP disputes are handled through administrative action.  Possible actions that can be taken by the relevant government authorities include the issuance of warnings, fines, the seizure or destruction of the counterfeit goods, etc.

However, Vietnam’s government agencies have struggled to keep pace with the changes taking place within the laws.  Therefore, many of the best ways to deal with IP issues in Vietnam is to have a good defense so that offensive action will only need to be rarely taken.  Defensive actions include making sure employment contracts have clear IP-related clauses, being on the lookout for production overruns (which could be a sign that your products are being sold elsewhere), talking with other foreign businesses in the same operating field to learn best practices, and registering your IP rights.

As part of the EU-Vietnam FTA, currently under negotiation, Vietnam will have to further tighten up its IP protection laws. Additionally, the U.S. led trade pact, the Trans-Pacific Partnership will also require Vietnam to meet high standards of IP rights.

Indicating that Vietnam is taking IP issues increasingly seriously, on September 23, the General Assembly of the World Intellectual Property Organization (WIPO) elected Vietnamese Ambassador Nguyen Trung Thanh as the new Chair of the WIPO Coordination Committee.  Thanh told the assembly that “Vietnam strongly supports the World Intellectual Property Organization (WIPO) in its innovative efforts to protect intellectual property worldwide and address newly arising problems” and “Vietnam would do its best to utilize the country’s advantages and overcome the difficulties ahead in the field of intellectual property, making way for more creative ideas and inventions.”

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email vietnam@dezshira.com or visit www.dezshira.com.

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