Milestone changes to IPRs protection regime

By Tran Manh Hung Partner, Baker McKenzie Vietnam

The CPTPP, formerly known as Trans-Pacific Partnership (TPP), and other free trade agreements that are about to enter into force, will create new opportunities for Vietnamese enterprises.

Intellectual property (IP) was an area of concern for TPP members, and stricter standards were set out to establish systems to protect IP rights. Though certain provisions on IP were suspended in the final CPTPP text, the remaining provisions will pose challenges for Vietnam, requiring it to amend domestic laws to be compatible with its CPTPP commitments.

This article provides an overview of CPTPP provisions on IP and the anticipated changes to Vietnam’s current legal framework. The article also compares the impact of the CPTPP and the European Union-Vietnam Free Trade Agreement (EVFTA), another important commercial agreement with standards on IP.

Copyright and related rights

When it comes to phonogram, the CPTPP stipulates that there is no hierarchy between copyright and related rights. If authorisation is needed from both the author of the original work and a performer or producer of that work, Article 18.61, of the CPTPP requires authorisation from each party. This regulation is compatible with the multilateral standard under the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty (WPPT). The CPTPP and the EVFTA require Vietnam to be a WPPT member for a certain period, and Vietnam will need to follow WPPT standards.

The TPP focused on expanding the right to self-protection by authors and holders of derivative rights, by granting them:

lexclusive control over duplication of original literary works, performance or audio recordings by any method or in any format (including digital) [Article 18.58, CPTPP];

lthe right to implement measures to prevent video-recording inside movie theatres (camcording); [Article 18.77 (4), CPTPP]; and lthe right to request specific measures against infringement of technological protection measures (TPM) which right holders have implemented to protect their own rights and rights management information (RMI).

Provisions on TPM and RMI were temporarily suspended in the CPTPP (though these provisions remain in the final CPTPP text), however, remaining provisions still pose challenges to Vietnam since many related issues are not addressed by domestic laws. Moreover, Vietnam cannot avoid the duty of establishing a framework to protect TPM and RMI in the future, since this is still a compulsory obligation provided under the EVFTA.

Industrial property rights

1. Trademark

Adhering to the spirit of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the Vietnamese Law on Intellectual Property (IP law of Vietnam) only provides protection for visible marks. However, the CPTPP provides that no parties can require that marks must be visible to be eligible for registration, and that no registration authority can reject a trademark application simply because the mark is composed of only sound. Each CPTPP member must also make their best effort to register scent marks.

On trademark licensing, the CPTPP provides that no member shall require recording as a requirement for trademark licenses to be valid, which is a costly and time-consuming procedure.

These important provisions in the CPTPP may fundamentally change Vietnam’s existing trademark regime, and will likely pose challenges to Vietnam’s National Office of Intellectual Property.

2. Patent and undisclosed test or other data

Patent was one of the substantive areas that would create difficulties for Vietnam in joining the TPP because the TPP significantly limited the scope of exclusions from patentability and stipulated standards for patent filings, publication of application, and verification in order to increase chances of successful patent application.

Many of these provisions related to patent protection have been suspended in the CPTPP. For example, the scope of subjects that may be excluded from being patented is no longer as narrow and provisions regarding the duration of patent protection due to the delay created by the patent registration authority no longer exist [Article 18.46, CPTPP].

This may also result in significant changes to the patent protection regime in Vietnam as this is a substantial issue that has not been clearly addressed under Vietnamese law. Furthermore, in order to comply with the CPTPP, Vietnam must clarify the type of information that must be published along with the publication of a patent to build a more transparent and effective patent filing regime.

Another important issue addressed in the CPTPP is the protection of undisclosed test and other data. With regards to agricultural chemical products, if a member requires compulsory submission of undisclosed test or other data relating to the safety and effectiveness of the product as a condition for issuing a market approval of that product, then that member must protect such data.

In particular, that member cannot allow a third party (without the consent of the person submitting the data) to introduce to its market an identical or similar product based on such data or based on the market approval granted to the person who submitted such data for a minimum duration of 10 years from the date of granting market approval for the original product within that member’s territory.

From this, it is understood that the protection of undisclosed test or data relating to agricultural chemical products is automatic and does not require registration. Meanwhile, the IP law of Vietnam does not guarantee automatic protection and only requires the competent authority to be responsible for the protection of confidential test data upon the request of the person making the application. Moreover, after such request, this responsibility only lasts for five years, half of the time period required by the CPTPP. So, Vietnam must modify existing laws to comply with the CPTPP.

With regards to pharmaceuticals, provisions regarding the protection of undisclosed test or other data relating to this subject in the CPTPP have been temporarily suspended. However, this is still mandatory under the EVFTA, and the provisions in the IP law of Vietnam relating to this subject matter need to be modified.

3. Geographical indications

The EVFTA focuses more on geographical indication (GI) than the CPTPP. The EVFTA sets out detailed and strict regulations on the protection of GIs, with the most notable ones being:

lThe parties (Vietnam and the EU) must develop a system for protecting GIs, and this system must contain certain processes for registration, verification, rejection, approval, and cancellation of GIs [Article 12(24) EVFTA].

lThe parties agree to protect the EU’s 171 GIs and Vietnam’s 39 GIs (listed in detail in the annex attached) without having to go through the standard procedures [Article 12(25) EVFTA]. The EVFTA provides legal bases to directly prevent the unlawful use of GIs by the persons of one party in the territory of the other party [Article 12(27.1)].

lThe EVFTA imposes more stringent requirements on the quality of GIs. Protection may be rejected on the basis of homonymous GI, to the extent that it may be misleading to consumers. The parties will decide the practical conditions of use under which homonymous GIs will be differentiated from each other.

The standards to protect GIs under the EVFTA are more stringent, and Vietnam is expected to amend its regulations in this area.

Enforcement of intellectual property rights

The CPTPP establishes a rigorous enforcement regime for intellectual property rights (IPRs) that involves administrative, civil, and criminal sanctions.

The CPTPP adds measures to enforce IPRs at borders and imposes obligations on members and right-holders.

The CPTPP also expands the jurisdiction of competent authorities to initiate border measures ex officio with respect to imported, meant for export or in transit, goods that are under customs control and suspected of being counterfeits or pirated copyright goods.

This can be understood to mean that customs authorities may enforce IPRs without an official request from a third party or the right holders. In this regard, Vietnamese law is compatible with the CPTPP’s requirements and will not be significantly amended.

Under the CPTPP, some violations may result in criminal liabilities, including certain acts of aiding or abetting an infringing conduct [Article 18.78(2)].

The CPTPP expands the power of the authorities to deal with certain violations, without needing an official request or submission of claims from a third party or the rights holder.

In Vietnam, the violation of copyright, related rights and acts infringing industrial property rights are criminalised under Article 225 and 226 of the 2015 Criminal Code (amended in 2017).

While these regulations mostly meet CPTPP standards, the lack of detailed guidelines on the constitutive elements of a crime, for example, how to identify infringing acts “on a commercial scale,” may create challenges during indictment.

On the other hand, Article 226(1) of the Criminal Code is not compatible with the CPTPP because it provides that authorities can only initiate criminal proceedings against infringements of IPRs after receiving a request from an injured party or the right holder.

Finally, Vietnam must amend the Criminal Code to impose criminal liabilities on acts infringing trade secrets, one of the mandatory components of the CPTPP.

Conclusion

Overall, the CPTPP and the EVFTA stipulate higher standards of protection for IP. As such, Vietnamese IP laws will have to be amended to be compatible with both the CPTPP and EVFTA.

Through participation in bilateral and multilateral trade agreements, Vietnam continues to stay ahead of numerous opportunities for economic and social development.

Intellectual property will continue to be the backbone of a knowledge-based economy, and Vietnam must improve its legal system, streamline the interactions between authorities specialising in IP, and create a platform for integration among trade partners regionally and globally.