Vietnam Legal Update:

Safe Harbors for Online Service Providers under Section 198b of the IP Law

Attorney Le Quang Vinh – Bross & Partners

Email: vinh@bross.vn

Is Section 198b the Safe Harbor for Online Service Providers?

Having gone through various stages of examination, the Draft Law amending and supplementing a number of articles of the 2005 Intellectual Property Law (“Draft Law”) will almost certainly be passed by the National Assembly in May 2022. Section 198b[1] of the Draft Law is materially transposed from Article 12.55[2] of the EVFTA, which stipulates that intermediate service providers (ISPs), or online service providers (OSPs) are exempted from legal liability for the users’ acts of infringing upon copyright, related rights on the platform of ISPs under one of three following activities:

1.     The transmission of digital content or the provision of access to the digital content ("mere conduit")

2.     The transmission in a telecommunication network of information provided by a user characterized by the automatic storage, temporary, intermediate, and for the sole purpose of making the transmission of information more effectively to another user (“caching”) on the conditions: (i) transforming information only for technological reasons; (ii) comply with the conditions of access to and use of digital content; (iii) complying with specified rules on updating digital content in a manner that is widely recognized and used by the industry; (iv) not preventing the lawful use of widely recognized technology in the industry to obtain data on the use of digital content; (v) removing digital content or deny access to digital content knowing that such digital content has been removed at the originating source or the originating source has canceled access to such digital content.

3.     The storage of digital content of service users at the request of service users (“hosting”) on condition that: (i) ISP does not know that such digital content violates copyright, related rights; (ii) ISP takes prompt action to remove or prevent access to such digital content upon learning that such digital content infringes upon copyright or related rights.

Legal Impacts of Section 198b

If approved by the National Assembly, Section 198b will result in many important legal consequences, including the risk of ISP likely being sued by the right holder. Here are four notable legal consequences of Section 198b:

1. Scope of applicability: Only works, performances, phonograms, video recordings (or audio and visual fixation), broadcasts that have been digitized and that are copyrightable are subject to this Section 198b. This also means that no ISP is held liable for infringement of other forms of IP legal protection such as trademarks, counterfeit marks, geographical indications, industrial designs, or patents.

2. Which ISP is affected: Section 198b only raises the issue of conditional liability exemption for 3 types of services provided by ISPs, including (a) only performing the function of transmitting information (mere conduit) of users in the telecommunications network; (b) transmission in the telecommunications network of users' information which is automatically, intermediately and temporarily stored and for the purpose of making the transmission of information more efficient to other users (caching); and (c) storing digital information content of service users at the request of service users (hosting). Thus, all ISPs operating in all five forms, including: (i) internet service providers; (ii) telecommunications enterprises; (iii) businesses that provide rental services for digital information storage, including rental services for websites; (iv) enterprises providing online social networking services; and (v) businesses providing digital information search services, may be affected by Section 198b.

3. Conditions for exemption: ISP is not automatically exempted from liability, but it is first responsible for implementing technical measures, coordinating with the state agencies, right holders to enforce measures to protect copyright and related rights. This regulation means that the ISP must receive and monitor the possibility of copyright infringement upon the request of the right holder.

4. Conditional immunity: Even if Section 198b stipulates 3 types of services consisting of mere conduit, caching and hosting are enjoyed the safe harbors protection, the ISPs providing these services are not automatically exempted from liability, unless they have met prescribed conditions. For example, both two conditions for an ISP providing hosting service immunized from legal liability are satisfied: (a) such ISP does not know that digital information content infringes copyright and related rights; and (b) such ISP takes prompt action to remove or prevent access to such digital content when it becomes aware that such digital content infringes upon copyright or related rights.

Bross & Partners, an intellectual property company ranked First (Tier 1) by Legal 500 Asia Pacific, has experience in resolving complicated IP disputes including trademarks, copyrights, patents, plant varieties

Please contact: Vinh@bross.vn; mobile: 0903 287 057; Zalo: +84903287057; Skype: honor.bross; Wechat: Vinhbross2603.