Senior Partner Le Quang Vinh, Bross & Partners, shared with the Hanoi Television’s audience in terms of “the Vietnamese IP Law and its inadequacies needed to be amended”

Email: vinh@bross.vn

MC asked: Yes, dear esteeming guests, the video report just replayed has shown that the issue of copyright protection or protection of intellectual property rights, although they are detailed in the IP Law and subordinate provisions by the Government, in fact, intellectual property violations are still quite common. Lawyer Le Quang Vinh, what do you think about this situation?

Attorney Vinh answered: it is true that the practice of IPR infringement in Vietnam is still very popular and tends to be more sophisticated and more complex, especially the increasing popularity of IPR infringement in the internet environment. The International Chamber of Commerce (ICC), an organization representing the largest and oldest global business community, has just come up with a provisional initiative for dealing with counterfeiting and piracy, shortly called as BASCAP with aiming to raise the public's awareness about the dangers of selling counterfeit and pirated goods, as well as proposing to the authorities to amend laws and enhance law enforcement capacity, especially IPR..

ICC recently collaborated with VCCI to publish a fairly detailed report[1][1] on intellectual property  issues in Vietnam, including the ccurrent status of IPR infringement in Vietnam, which I can summarize in a few words:

1. The situation of fake and contraband goods at an alarming level in Vietnam contributes positively to the underground economy (sometimes known as “the economy has not been observed) worth up to tens of billions of dollars, making the State lose tax revenue and the consumers’ health is at risk. Counterfeit goods are available in all areas from textiles, cosmetics, pharmaceuticals, spirits, food and software
2. Intruders are increasingly sophisticated because they use sophisticated counterfeiting technology to disable detection, with a focus on faking big brands.
3. Infringement of intellectual property rights is growing rapidly and is popular on the internet environment, focusing on illegal webs, unauthorized distribution and dissemination of copyrighted work and products in cracked, livestreamed manner, etc.,

MC asked: Yes, like other areas, economics-related sectors are the ones upon which intellectual property infringes. Enterprises still face many difficulties when their products have a foothold in the market subject to infringement of copyright. With many years of practical experience protecting the rights and interests of customers who are manufacturing and retail businesses, could you analyze more carefully about the harmful effects of infringement of intellectual property rights?

Vinh answered: The harm of IPR infringement is plentiful, but in my opinion, there are 3 main and most basic harms:

1. Promote the underground economy to continue to thrive, the state to lose tax revenue and consumers at risk of life-threatening damage due to the use of counterfeit goods
2. To discourage investors, especially those who own a lot of technical know-how, pioneering technical innovations, leading innovations, etc., participating in investment because they are afraid of losing intellectual property assets. As a result, the targets of investment and technology may not be achieved as set by the State
3. The law - a tool to control infringement as well as balance interests between rights holders, competitors and the public - is nullified or even unworkable leading to one of the worst consequences is that intellectual property considered as a tool to develop the economy, promote innovation or encourage creative enterprises can fail.

MC asked: Dear lawyer, for violations shared by you and the representative of a enterprise here, how does Vietnamese laws penalties?

Vinh answered: Depending on the nature and seriousness of IPR infringement, one of the civil, administrative or criminal sanctions can be applied and there are currently all of these three types of sanctions in our legal system. Currently, up to 98% of IPR infringement cases in Vietnam are handled by administrative measures (while the same is mainly subject to civil sanctions in the world in which the court can issue a judgment on compensation worth up to tens or hundreds of millions of dollars) with the highest penalty of 500 million VND for organizations or 250 million VND for individuals accompanied with additional sanctions such as destruction, suspension of business activities. A civil action may be accepted by a court up to 50 million for mental damage and 500 million for material damage (if the litigant fails to prove material loss is greater than 500 million). Regarding criminal sanctions against crimes infringing upon IP rights and copyrights, imprisonment of up to 3 years for individuals may be imposed and commercial entities (commercial corporation) may be fined up to 5 billion or suspended from business activities for 6 months to 2 years. 

MC asked: Yes, it is correct like just shared by you from the beginning of the program up to now, the handling of intellectual property infringement in our country has not really been effective, the violations are still occurring commonly and there are signs of continuous increase. It is because our sanctions are not enough to deter infringers?

Vinh answered: I do not think that sanctions are a causal problem, although of course our sanctions from the world’s view are low, not enough deterrence because the profits of violators earned are often much greater compared with the level of sanction.

Regarding the reasons why the handling of counterfeit and infringement of IP rights is not effective, I can retrieve 4 reasons:

1.         Our laws are not really quality, that is, they are not perfect, but there are still overlaps, conflicts between this laws and other laws make it difficult to apply the law, especially our legal provisions on dealing with internet-based infringement are mostly absent or sketchy so it is not easy to handle violations on the internet. For example, crime of manufacturing and trading counterfeit goods and crime of infringement of industrial property rights are overlapping their criminal objectivity. Or, for instance, the act of infringement on the internet has not been clearly explained through which any evidence is required to prove that it is aimed at Vietnamese consumers. Or conflict between information technology law and IP law on domain name issues for a long time

2.         In theory, it seems that sanctions are sufficient, but in practice, the administrative penalty of VND 500 million is rare or very few offenses are imposed penal liability under Sections 225 or 226 of the Penalty Code of 2015 or it seems that there has not been any IP case where the court accepted the damages up to VND 1 billion

3.         The capacity of our enforcement apparatus is weak and uneven in provinces and cities across the country

4.         Vietnam does not have a specialized court on intellectual property, which is also a reason why IP infringements or disputes are delayed for too long, such as the recent case of Than Dong Dat Viet[2]

MC asked: The development of digital environment is causing the forms of copyright infringement to be popular, diverse and sophisticated, causing heavy economic losses to authors and copyright owners. Meanwhile, the authorities seem confused to deal with them? Lawyers think about this issue?

Attorney Vinh replied: Right. The explosion of internet and digital environment makes copying, advertising and distributing commodities and products on the internet easier than ever, including the booming of online trading markets and online shops or giant social networks, namely Facebook, Instagram, Twitter, etc.,. In summary, the development of technology is also a main reason leading to IPR infringement because the technology is duly the intermediary tools which makes it difficult to detect, as well as makes authorities and right holders confused to seize and handle. In fact, this is a difficult problem for both developed countries like the US and Europe because the internet is a borderless environment while IP rights are territorially restricted, and subsequently infringers do not exist in the real world but they are hidden in the virtual world, it is very difficult to find and detect, which leads to our traditional ways of detecting, making records, detaining, etc., appears to be no longer effective. Pirated streamlined channel Xoilac.tv is an typical  example

MC asked: Thank you, Lawyer Le Quang Vinh, in addition to the inadequacies of some legal provisions, how do businesses need to protect themselves against the current situation of violations of the IP Law?

Attorney Vinh responded: That's right, before the above reality, businesses should actively find ways to protect themselves. One of the strategies to protect your business can refer to:

1.         It is necessary to have a basic understanding of the types of intellectual property rights, including commercial identifiers, conditions of protection and scope of protection, to promptly review, inventory and register their intellectual property rights as evidence of being the owner to use when necessary as well as to assure business without fear of infringement by other entities

2.         It is necessary to proactively find suitable legal tools, especially defense measures (safe harbor) prescribed by law to prepare and combat other parties suing or denouncing due to IPR infringement. These measures are often called fair use or the use of published works of others without asking for permission and without compensation, or defense against allegation of patent infringement such as prior use, parallel importation, or cancellation action attacking the validity of the opponent's IP rights.

3.         It is advisable to store, collect, classify evidences for use of self-defense circumstances or for the purpose of anti-infringement, preventing unfair competition related to IP, or even invalidating the other’s registered trademark where your unregistered trademark had been widely recognized and used prior to the filing date of that registered trademark.

MC asked: Attorney Le Quang Vinh, do you have any recommendations for businesses in the context of fierce competition and extensive international integration today?

Attorney Vinh said: I think that Vietnamese enterprises should pay attention to the following issues in the context that Vietnam is a very open market, which means fierce competition pressure:

1.         To promote the research, application, use and maximum exploitation of the profitability of IP rights in technology transfer, licensing, exploitation and take advantages of giant data sources regarding different types of technology available in expired patents

2.         For manufacturing enterprises, efforts should be made to differentiate themselves even from their small innovations; to apply for registration of them in the form of utility models before moving towards upgrading them into patentable inventions; building up their own brand names based on their own distinctiveness.

3.         Bold and dare to venture capital when expanding the market, it is best to find the weaknesses of the competitors, then develop a niche market strategy.

4. To enhance the use of IP assets through license, franchise, technology transfer contracts, based on which you should capture and learn experiences of enterprises in developed countries.

MC asked:  Yes, ladies and gentlemen, a series of free trade agreements have been signed, especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which requires Vietnam to include stronger sanctions. So, in your opinion, how should the Law on Intellectual Property be amended to comply with these commitments?

Attorney Vinh answered: In fact, our country’s IP-related legal framework is operating according to the common (minimum) standard imposed by the WTO. Basically, our legal framework doesn't have to change much after the CPTPP takes effect. The CPTPP has a slightly higher requirement, for example, it requires protection of non-visible marks such as sound mark and scent mark but Vietnam is a developing country, so they allow Vietnam to be reserved for several years. Therefore, in the draft of the amended IP Law, as far as I know, the National Assembly must only review and approve a few small amendments, such as amending patent regulations, specifically an invention that was publicly disclosed for less than a year is still considered to comply with the novelty standard (the current law confirms it lost novelty), or we are forced to abolish the requirement of registration of trademark license agreement to be effective against any third party

Link viewable the roundtable: http://hanoitv.vn/ha-noi-nhung-goc-nhin-luat-so-huu-tri-tue-va-nhung-bat-cap-can-khac-phuc-v117044.html

Should you have any query, please contact 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 enforcement, anti-counterfeiting,  litigation regarding trademark, trade name, industrial design, patent, copyright and domain name.