The intellectual property perspective of investing

Despite being intangible assets, IPs are becoming one of the most valuable assets a company can have. Vietnam has built a relatively complete and comprehensive system of legal documents in this area. In addition, it has signed many free trade agreements; ratified the protocol to amend the 2017 TRIPS Agreement; acceded to the Hague Agreement on International Registration of Industrial Designs, and more besides.

Tran Manh Hung - Managing partner, BMVN International LLC

In June 2022, the NA officially approved and promulgated the law providing amendments and supplements to the law on IP, which took effect as of January 2023, with a couple of exceptions that either took effect in January 2022 or will occur in mid-January 2024.

With more than 100 articles being amended and supplemented, the amended law on IP has now provided clearer and more specific provisions on the protection of sound marks and on information for patent holders to exercise rights in obtaining market approval for pharmaceutical products.

Mechanisms have also been provided to compensate patent owners for delays in granting pharma approvals; and determining IP holders to facilitate the assignment and licence of copyright and related rights.

The regulations on the protection and enforcement of IPR have been revised and improved to ensure an adequate and balanced level of protection between the interests of the right holder and the rights to use and have access to knowledge and technology of the society.

The newly amended and supplemented law on IP is considered comprehensive, as it covers many significant issues and provides more transparent and detailed regulations.

Pros and cons

Vietnam is emerging as a production hub of the world. In addition to the opportunities that we receive, thanks to the state’s open investment policy and the effort in perfecting our legal system, especially the legal system on IP, currently, we have to face plenty of challenges in attracting funding to Vietnam.

One of the concerns that may hinder foreign investors from entering the local market is the prevalent and complicated infringement of IPR in Vietnam. This has been frustrating many potential investors and presenting great difficulty in improving the local investment and business environment.

Over the years, Vietnam has made great efforts to enforce IPR. In 2020, the enforcement authorities of ministries and branches handled and resolved 1,460 cases of infringement of IPR, of which over 1,300 cases were handled with administrative measures, and 158 cases were prosecuted and investigated. There were 269 defendants, and the fines amounted to over VND25 billion ($1.08 million).

Nevertheless, enforcement efficiency is still limited. IPR holders and local authorities still mainly rely on administrative procedures and sanctions when handling infringements. Disputes concerning such rights have a specific nature and are increasing rapidly in both quantity and complexity.

Meanwhile, the resolution of such disputes is facing many difficulties, especially when Vietnam has not had a specialised court, and few judges have deep expertise in this field. The number of cases the court handled with civil measures is far less than those addressed by administrative measures. This also more or less affects the decisions of foreign investor, since they are concerned about protecting their legitimate rights and interests in their IP.

The proposal to establish a specialised court on IP has been made by the Vietnamese Intellectual Property Office since 2018. Recently, the Supreme People’s Court has requested opinions on the second draft of the proposal on developing the law, providing amendments and supplements to the Law on Organisation of People’s Courts. Accordingly, it is proposed that a specialised court on IP should be established at the Hanoi High People’s Court.

Regarding the structure of the trial panel, jurors participating in the trials of cases concerning economic, enterprise, or IP issues at specialised courts must be experts with high professional knowledge and more than 5-year working experience in the respective field.

This is a good sign showing Vietnam’s efforts to enhance enforcement activities’ efficiency and promptly resolve the problems when handling these disputes. The country indeed aims to catch up with international trends in the near future. In fact, many countries in the region have established specialised courts, such as China, Japan, Thailand, and Malaysia.

With several advantages and potentials for development, Vietnam has numerous opportunities to emerge as a new production hub and attract high-tech projects with modern management, high-added value, and positive spreading effects, aiming to connect global production and supply chains.

The improvement of policies and laws on IP and the efficiency of enforcement activities will contribute significantly to improving the business investment environment, aiding the attraction of more foreign investors and enhancement of Vietnam’s competitiveness.