CPTPP officially took effect for Vietnam from January 14, 2019

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11) is a free trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The precursor of CPTPP is the Trans-Pacific Partnership Agreement (TPP) which has 12 member states. The CPTPP took effect from December 30, 2018 after the ratification of the sixth country – Australia in the following of New Zealand, Canada, Japan, Mexico and Singapore. CPTPP consists of 11 countries with a total GDP value of about $ 10,000 billion, occupying about 13% of global GDP. On November 12, 2018, the Vietnamese National Assembly ratified CPTPP, making Vietnam the seventh country to ratify CPTPP. Based on Notice No. LGL/CPTPPD/2018-15 by New Zealand, CPTPP officially took effect for Vietnam from January 14, 2019.

Some important legal changes that need to be kept in mind since January 14, 2019

Because Article 6 of the Law on Treaties of Vietnam 2016 stipulates that if a legal document and a treaty to which the Socialist Republic of Vietnam is a contracting party have different provisions on the same issue, the treaty shall prevail, except the Constitution [1]. Thus, in the context that Vietnam has not yet fixed the Law on Intellectual Property and other related legal documents while some provisions on intellectual property rights in CPTPP are different from the current IP Law, the National Office of Intellectual Property of Vietnam (NOIP) must issue Notice No. 1926/TB-SHTT dated of February 1, 2019 [2] guiding how to apply CPTPP. Below is some brief information and our further comments for your reference:

1. Suspension of Clause 2, Article 148 [3] of the IP Law provides that a license contract (a contract of transfer of the right to use a trademark) is effective only among the parties but not a third party if it is not registered with the NOIP

Article 18.27 of CPTPP provides that no member state shall require recordal of trademark license for one of the following purposes:(a) to establish the validity of the licence; or (b) as a condition for use of a trademark by a licensee to be deemed to constitute use by the holder in a proceeding that relates to the acquisition, maintenance or enforcement of trademarks.

Thus, the easier way to understand is that since January 14, 2019, Clause 2 Article 148 of the IP Law has been automatically invalidated, leading to two legal consequences:

(a) License contracts, even if they are not registered with the NOIP, will still be valid for third parties, and

(b) the use of a licensed trademark in actual commerce by the licensee is also considered as the use of a licensed mark by the licensor in case of 5 consecutive years of non-use cancellation requested filed by third parties

2. It is the first time Vietnam has applied a rule to allow for a grace period of 12 months for patent/ utility solution application that lost its novelty

Clause 3 Article 60 of the IP Law allows 3 cases of patent that has been disclosed before the filing date, provided that the patent application is filed to the NOIP within 6 months from the date of disclosure:

a) It was published by another person without permission of the person having the right to registration as provided for in Article 86 of this Law;

b) It was published in the form of a scientific presentation by the person having the right to registration as provided for in Article 86 of this Law;

c) It was exhibited at a national exhibition of Vietnam or at an official or officially recognized international exhibition by the person having the right to registration as provided for in Article 86 of this Law.

However, since CPTPP took effect, Article 18.38 substantially alters the above-mentioned rule of grace period for patent that lost its novelty, whereby the new rule applies from January 14, 2019 is that:

1. the patent was publicly disclosure by the patent applicant or by a person that obtained the information directly or indirectly from the patent applicant (regardless of whether or not the way to obtain this information is with the consent of the person who has the right to patent); and
2. the disclosure was occurred within 12 months prior to the date of the filing of the application to the NOIP (does not included priority dates).

The consequence of the new rule is that the information publicly disclosed in the above case is not taken as a cited document (not in the "technical condition") to determine the novelty or creativity of the invention concerned. For example: An invention/ utility solution A was created and filed an application by B on January 14, 2019, but the fact shows that B has publicly disclosed the invention on the website as well as exploited it before January 14, 2019, in this case, the new rule of 12 months grace period of invention that lost its novelty is applied (if the patent application is filed on January 13, 2019, it is considered that lost its novelty under Article 60 of the IP Law).

3. Refusal or cancellation actions against geographical indications due to "likely to cause confusion" instead of "will cause confusion" with trademark rights being protected in Vietnam

Pursuant to Clause 3 Article 80 of the IP Law, an application for registration of geographical indication shall be rejected if the sign sought to be protected as geographical indication identical with or similar to a mark having been protected if their use will cause confusion as to the origin of the products. Whereas Article 18.32.1.b CPTPP imposes obligations on Vietnam, it is necessary to stipulate that geographical indication may be rejected when the opinion of a third party opposes protection or recognition of such geographical indication which is likely to cause confusion with the registered trademark in Vietnam. Thus, due to the fundamental change of this CPTPP rule, the third party's opposition based on the "will cause confusion" basis must be replaced by "likely to cause confusion”.

The consequence of this change also entails a change in the way of assessing the possibility of confusion, namely the NOIP will have to take into account the fact that geographical indications are often the pre-existing objects (independent of whether or not to be registered) and widely known, even well-known, which are therefore more likely to be "confused" than "cause confusion" with trademarks.

4. Administrative procedures applicable to the protection or recognition of geographical indications in the form of translation or t transliteration must be similarly applied to normal geographical indications.

Article 18.32.5 CPTPP stipulates: “If a Party provides protection or recognition of a geographical indication through the procedures referred to in Article 18.31 (Administrative Procedures for the Protection or Recognition of Geographical Indications) to the translation or transliteration of that geographical indication, that Party shall make available procedures that are equivalent to, and grounds that are the same as, those referred to in paragraphs 1 and 2 with respect to that translation or transliteration”. Pursuant to this provision, the NOIP instructs that applications for geographical indications to the translation or transliteration of that geographical indication submitted from the effective date of CPTPP are processed as applications for registration of normal geographical indications. 

5. The rule of assessing whether a term is the common name of good in Vietnam, the competent authority must have the right to consider how consumers understand such term in Vietnam

This is an obligation imposed by CPTPP at Article 18.33 which is in fact further clarifying the provision of protection procedures or recognition of geographical indications in Article 18.32.5 and regulation on denial or cancellation of geographical indications according to Article 18.32.1.b above, which is directly related to geographical indication if it has become a common name of goods in Vietnam, it is subject to the exclusion of protection as geographical indication under Clause 1 Article 80 of the IP Law. Accordingly, the determination of whether a geographical indication is a common name or not under CPTPP must be done through 2-step test:

1. whether the term is used to refer to the type of good in question, as indicated by competent sources such as dictionaries, newspapers and relevant websites; and
2. how the good referenced by the term is marketed and used in trade in Vietnam (use in recognized international standards to refer to a category or class of goods, for example, import and export tariff...).

Should you have any query, please get in touch with us at vinh@bross.vn or 84-903 287 057

 Bross & Partners, a renowned and qualified Patent, Design, Trademark and Copyright agent of Vietnam, constantly ranked and recommended by the Managing Intellectual Property (MIP), World Trademark Review (WTR), Legal 500 Asia Pacific, AsiaLaw Profiles, Asia IP and Asian Legal Business, is providing clients all over the world with the reliable, affordable contentious and non-contentious IP services including preparing Vietnamese translation of PCT applications and entering the Vietnamese national phase, filing, prosecution, enforcement, anti-counterfeiting, litigation and domain name matters.

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[1] Clause 1 Article 6 of the Law on Treaties dated of April 9, 2016 which took effect from July 1, 2016.

[2] See more at: http://www.noip.gov.vn/web/noip/home/vn?proxyUrl=/noip/cms_vn.nsf/vwDisplayContentNews/3E06998AFC1F97254725839F00176FAB?OpenDocumen