Firms may pay dearly for IPR negligence

In May 2015, the People’s Court in the southern province of Binh Duong ruled on an intellectual property right (IPR) dispute between US tech-giant Microsoft Corporation and Korean-backed Trimmers Vietnam.

Earlier, Microsoft had filed a civil lawsuit against Trimmers Vietnam, which specialises in manufacturing luggage components, for using illegal computer software in its business operations and demanded a compensation of VND748 million ($34,300) plus legal costs.

This is one of the four IPR lawsuits Vietnamese courts adjudicated last year. The number of local firms facing similar lawsuits is believed to surge sharply after the Trans-Pacific Partnership Agreement (TPP) comes into force.

Deputy Minister of Industry and Trade Tran Quoc Khanh, head of the Vietnamese delegation joining the TPP negotiations, said, “The burgeoning foreign direct investment flow into Vietnam over the upcoming time may be paralleled by a boom in IPR disputes. Most global firms, before setting a foothold in Vietnam, secure the government’s commitment to protect their intellectual property. This has put Vietnamese firms and the whole economy in a difficult situation in their efforts to approach the world’s scientific and technological achievements.”

According to the Ministry of Science and Technology, besides revising its legal framework, Vietnam also needs to take criminal actions against IPR violators, instead of the current administrative measures.

Minister of Science and Technology Nguyen Quan even issued a warning that Vietnamese firms might go bankrupt or dissolve unless they make decent preparations to meet IPR requirements within the TPP.

From the part of businesses, Vu Thi Thuan, chairwoman of leading local pharmaceutical firm Traphaco, assumed that pharmaceuticals was one of the fields of high creativity that are in a bad need for IPR protection.

“Regrettably, many local firms have little awareness of or even plainly disregard the importance of IPR. When joining the TPP, such a way of doing business must be altered if they do not want to fail on their home turf,” Thuan said.

Like-minded Pham Thi Thu Hang, general secretary of Vietnam Chamber of Commerce and Industry (VCCI), which represents the Vietnamese business community, warned that, “Firms gravely underestimate this issue. With this improper approach, they may easily violate IPR regulations, forgetting that these are amongst the major contents of the TPP.”