IP law is one of the fastest growing areas within the legal arena in Vietnam. According to the US Chamber International IP Index report 2020, which assesses IP ecosystems in 53 countries across 9 categories of protection, Vietnam progressed the most in Asia with a 5.93 percent higher than last year, notably in membership and ratification of international treaties with an almost 50% increase. Regardless, Intellectual Property rights (IPRs) protection and enforcement in Vietnam still leaves much room for improvement, and a constantly changing regulatory environment can expose businesses to various risks and setbacks. This article provides the first guide on IP laws and protection to assist foreign businesses in their early days of investment in Vietnam.
Why should business understand IP laws and protection in Vietnam
Even though Vietnam participates in various international conventions and treaties in relation to IPRs protection, they do not automatically become domestic laws. The state would then transfer the provisions of treaties into domestic laws or decide on the application of all or part of them. This makes understanding and dealing with domestic IP laws in Vietnam crucial for businesses looking to invest in Vietnam.
Likewise, under the Vietnamese judicial system, the courts are not bound by prior decisions of other national or international bodies, except for precedents passed by the Supreme People’s court, but instead consider the case based only on the applicable laws.
With IP legislation being in constant flux, it is difficult to keep pace with changes taking place in IP laws. Thus, building a good defence and understanding the legal protection to which you are entitled are important to keep your business smooth sailing.
Principal IP laws endorsed by Vietnam
Vietnam presently partakes in the following IP international conventions and bilateral agreements:
- WIPO Berne Convention for the Protection of Literary and Artistic Works 1971.
- Brussels Convention relating to the Distribution of Program-Carrying Signals Transmitted by Satellite.
- WIPO Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations 1961.
- WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS).
- Vietnam-United States Copyright Agreement.
- Vietnam-Switzerland Bilateral Agreement.
- Vietnam-United States Trade Agreement.
Thus in accordance with these cross-border agreements, any work having copyright protection in Vietnam is also protected in member countries.In addition to international conventions and treaties, the principal domestic legal sources from which Vietnamese IP laws derive are the:
- Intellectual Property Law of 2005, amended and supplemented in 2009 (IP Law), which provides detailed definitions and mechanisms for the protection of IP rights.
- Law No. 42/2019/QH14 Amendments to some articles of law on insurance business and law on intellectual property
IP regulating bodies in Vietnam
In Vietnam, the government bodies regulating IP laws and protection include the Ministry of Science and Technology Inspectorate, Ministry of Culture, Sports and Tourism Inspectorate Ministry of Industry and Trade’s Market Surveillance Agency, Ministry of Public Security’s Economic Police, Vietnam People’s Court (Civil Court), and Ministry of Finance Customs Office.
Within specific areas, designated organizations are in charge of exercising management and providing services for IP protection. In particular,
- According to Article 5 No. 22/2018/ND-CP, Copyright and related rights are administered by the Copyright Office of Vietnam (COV) under the Ministry of Culture, Sports and Tourism;
- Industrial property rights are administered by the National Office of Intellectual Property (NOIP) under the Ministry of Science and Technology; and
- Plant variety rights are administered by the Plant Variety Protection Office of Vietnam (PVPO) under the Ministry of Agriculture and Rural Development.
Among these, NOIP is the chief coordinator of the Ministry of Science and technology that administers the registration of patents, trademarks, and other industrial property rights. However, neither the National Intellectual Property office nor the Copyright Office has jurisdiction in copyright litigation. Copyright and IP related cases are tried in the civil or criminal court of the People’s Court system.
What types of IP rights are covered by Vietnamese jurisdiction?
Registration for patent applies for Inventions, Industrial design and Layout design.
Regarding inventions, Vietnam distinguishes between invention patents and utility solution patents (or ‘utility models’, ‘minor patents’), for which the item is not required to demonstrate an “inventive step” such as the case of invention patents.
To receive protection, a patent application is examined and granted by the National Office of IP (NOIP).
According to Article 93 IP Law, the patent shall be valid throughout the entire territory of Vietnam. Invention patents give protection for a maximum of 20 years, while utility solution patents are valid for 10 years after the filing date, with possible extension upon expiry date. Industrial designs are given protection for a maximum of five years, renewable for two consecutive periods, each of five (5) years.
According to Article 91 IP Law and Decree No. 103/2006/ND-CP, Vietnam’s patent law operates under the ‘first to file’ principle. Thus it is advisable that businesses obtain patent registration the sooner the better.
This protects symbols, colours, three-dimensional objects, and other visual devices used to identify a business’ products or services.
Registration of trademarks is filed with NOIP. Registration takes up to 15 months and a trademark is valid for ten years.
Trade names also constitute a form of industrial property in Vietnam, with rights established through their use rather than under a formal registration system. SEE MORE: Regulations of Company names in Vietnam
READ FURTHER: How to register for trademarks in Vietnam
This protects unpublished or published literary, artistic and scientific works such as books, songs, films, web content, and computer programs (See Article 14 of IP law of 2005 for a full list of types of work covered by copyright). Derivative works from these literary, artistic and scientific works are also protected.
In accordance with Article 6 IP Law 2005 amended 2009, a copyrightable work has automatic protection if it is fixed in some material form irrespective of its content, quality, form, mode and language and irrespective of whether or not such work has been published or registered. Registration with the Copyright Office of Vietnam is not mandatory for protection but nevertheless recommended.(See below for how to maintain IPRs effectively in Vietnam)
In accordance with Article 18, 19 IP Law 2005 amending 2009, Copyrights include economic rights and moral rights. Moral rights are rights to be acknowledged as the author of the work and the right to prevent any actions to modify, mutilate, or distort the work. Economic rights are the rights to make derivative works, display, reproduce, distribute, publish, communicate the work, import and lease the original or copies of cinematographic works and computer programs.
Vietnam is a signatory of the Berne Convention on copyright, which is incorporated into Vietnam regulations (Article 27 IP Law 2005 amending 2009). Accordingly, the terms of copyright protection are as follows:
- The moral rights, including: To give titles to their works; to attach their real names or pseudonyms to their works; to have their real names or pseudonyms acknowledged when their works are published or used; and to protect the integrity of their works; and to forbid other persons to modify, edit or distort their works in whatever form, causing harm to the honour and reputation of the author shall be protected for an indefinite term.
- The economic rights and and the right to publish their works or to authorize other persons to publish their works shall be protected for the whole life of the author and for fifty (50) years after his or her death. In the case of a work of joint authors, the term of protection shall expire in the fiftieth year after the death of the last surviving co-author.
- However, cinematographic, photographic, dramatic, applied arts and anonymous works have a term of protection of 75 years from the date of first publication.
- Confidential information that is valuable to business and provides commercial advantage can be protected under business secret in Vietnam. To obtain protection, owners can implement protective measures such as stamping the documents with “confidential”, requiring non-disclosure agreements to be signed, and generally limiting access to the information.
- Vietnam also grants protection for satellite signals, circuit board layouts and plant variety under its Law on Intellectual property and the Brussels Convention.
- Geographical indications if the bearing product (1) originates from the area, locality, territory corresponding to such indication and (2) has a reputation, quality or characteristic attributable to the geographical conditions. A certificate of registered geographical indication shall have indefinite validity starting from the grant date.
How to maintain IP rights effectively in Vietnam
It is always recommended to get your IP registered in case of conflict. Consequently, the burden of proof will not fall upon the owner/authors, unless rebutting proofs are adduced. As Vietnam is part of many international conventions and treaties, designating Vietnam in the international application is an effective way to extend protection to Vietnam while saving time and money. “Priority rights” under the Paris Convention can help in the local registration of trademarks, designs and patents by allowing rights previously registered elsewhere to become effective in Vietnam if filed within a time limit.
Licensing is applicable to most IPRs. Strict terms and regulations on controlled use of IP should be mentioned in the licensing contract in order to prevent abuse from the licensee.
Technology transfer is the transfer of the right to own or use part or whole of a solution, process, or know-how that converts resources to products from one party to another. With registration of technology transfer being made mandatory in Vietnam from 2018, both parties should revise the provisions of the contract carefully before registering it with the competent authority.
Franchising is governed by the Trade Law 2005 and the Decree 35/2006/ND-CP. Though still new in Vietnam, franchising seems to be interesting for both Vietnamese and foreign partners and worth being put into consideration.
In case where legal action is needed to protect your IPRs, there are three levels at which rights may be enforced in Vietnam:
- Administrative action – this is the usual route in dealing with infringements, offering a fast, low-cost, and comparatively straightforward method. However, the deterrent effect is limited because of the low penalties and lack of compensation.
- Civil court action – this is rare in Vietnam because of the poor standard of training of the judiciary in IP matters, the lack of specialist IP courts and Vietnamese tradition. Preliminary injunctions and compensation for damages are available through the civil courts.
- Criminal prosecution – government authorities, including Customs, can also bring prosecutions.
- Take advice from Vietnamese IP experts, agents, distributors, and suppliers on how to safeguards your rights;
- Carry out risk assessment and due diligence checks on any organizations or individuals you deal with;
- Stick to your normal business instincts;
- Prevention is better than the cure
- Have clear IP-related clauses in employment contracts when hiring employees and make sure employees are educated on IPRs matters.
- Have confidentiality clauses in any contracts signed with suppliers, partners or employees, preferably having non-disclosure agreement (NDA) / confidentiality agreement (CA) to restrict the disclosure of certain proprietary or confidential information explicitly outlined in the agreement.
- Check production overruns to make sure genuine products are not being sold under a different name.
Now that you get a broad picture of IP laws and protection in Vietnam, you are ready to advance into the next step of applying IP laws in business transactions such as maintaining an IP portfolio, taking security over IPRs, IP and M&A transactions. Use this article as a first-hand advisor along the way, and should problems arise, our legal experts are ready to assist.