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June 23, 2020

EVFTA Introduces New Standards for Intellectual Property Enforcement in Vietnam

While Vietnam’s economy has grown quiet during the first half of 2020 amid the COVID-19 pandemic, the country’s legal framework for intellectual property enforcement seems to be exploding with the entry of new legal instruments. The EVFTA (EU-Vietnam Free Trade Agreement), coming on the heels of the CPTPP, will come into force in Vietnam on August 1, 2020, bringing about some major changes to the current IPE framework. We discuss a few of these changes below.

Preliminary Injunctions

The EVFTA clarifies and supplements the circumstances in which a right holder can seek a preliminary injunction. Particularly, the EVFTA requires Vietnam to codify the following situations where interlocutory injunctions are applicable:

  • To preclude an infringement from occurring; and
  • To preserve evidence in respect of an alleged infringement, including physical seizure of infringing goods and any materials and implements used for producing and distributing the goods.

The court can grant such interim injunctive relief against a “party whose services are being used by a third party to infringe an intellectual property right and over whom the relevant judicial authority exercises jurisdiction.”

As currently provided in Vietnam’s domestic laws, the court can issue provisional measures without hearing the other party’s position. However, the domestic laws are still incompatible with the EVFTA as they allow the filing of preliminary injunction motions only in the context of a lawsuit (right at the time of filing a suit or during the proceedings of the suit). When the EVFTA takes force, Vietnam must remove this regulation and allow a motion to be filed at any appropriate time.

In fact, in 2017, Vietnam introduced a draft law on provisional measures prior to a suit. However, some of the relevant stakeholders were critical of this draft law and, so far, it seems it is still on the shelf. However, Vietnam could soon revisit this matter to conform with the EVFTA’s requirements.

Court Injunctions

With the advent of the EVFTA, Vietnamese courts can now issue final injunctions not only against infringers, but also against parties who provide relevant services to infringers, such as those who store or manage infringing goods. When it comes to unintentional infringement, the EVFTA seems to favor a soft approach. The pact recommends Vietnam make allowance for pecuniary relief in replacement of certain remedial measures. It also proposes that Vietnam’s courts “order in favor of the injured party the recovery of profits or the payment of damages which may be pre-established.” In our view, in most cases, such granted amount would be a far cry from the actual damages the right holder incurs.

Notably, the EVFTA seems to require Vietnam to introduce a regime of “permanent injunction.” Thus far, the final injunctions issued by courts apply to infringement that occurred in the past or is ongoing. To some extent, it is a one-time injunction. When the infringer commits recidivism, the right holder must file another suit to put a stop to such infringement. Now, with the language of Article 12.49 of the EVFTA’s IP Chapter, the court can issue a final injunction to prevent infringement in the future.

Presumption of Ownership

So far, Vietnam has not expressly touched on the presumption of authorship or ownership of rights. This lack of regulation poses a real difficulty to the courts in tackling IP disputes, especially copyright infringement. Often, an IP marking does not come into play in the court’s assessment as Vietnamese courts tend to count on clear regulations or confirmation from other authorities on the ownership. In a recent court case, the court was unaware of the ownership of a copyrighted work despite the copyright symbol (©) appearing on the work. With the clear regulation under the EVFTA, it is expected that IP enforcement, especially copyright enforcement, will be greatly facilitated.

Also, a product configuration (the shape or design of a product) under the EVFTA would enjoy protection as both industrial design and copyright. As such, if a product configuration is not registered as a design patent, the owner could fall back on copyright law to take on copycat traders.

Other Changes

The EVFTA provides for the liability of internet service providers (ISPs) in the context of copyright infringement. Generally, the treaty focuses on the limitations of, or exceptions from, such liabilities, which differs substantially from the structure of the current domestic law, which sets out situations where the ISP must assume responsibility (in other words, the ISP does not bear any responsibility in situations other than those mentioned in the law). As of the effective date of the EVFTA, Vietnam must revise the current regime to reflect the EVFTA’s requirement.

The EVFTA also regulates border enforcement. Generally, the domestic laws are in line with these regulations. The EVFTA obligates customs authorities to be actively involved in customs seizure of suspected IP-infringing goods, and to cooperate with right holders, including providing them with relevant information for risk analysis.

Though the EVFTA ushers Vietnam into an era of more effective IP enforcement, it is just a foundation, a law in the books, until Vietnam does more to actually enforce IP rights to the satisfaction of right holders, and meeting the expectations of the EVFTA.

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