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July 10, 2020

Interim IP Provisions Introduced Under EU-Vietnam Free Trade Agreement

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The EU-Vietnam Free Trade Agreement (EVFTA) was ratified by Vietnam’s National Assembly on June 8, 2020, under Resolution No. 102/2020/QH14 (Resolution 102), and will take effect on August 1, 2020. Among the IP provisions in the EVFTA (Chapter 12), some will be applied directly upon the effective date of the agreement, without any changes to the current domestic laws and regulations, while others will be applied via the amendment of the IP Law. Until the amended IP Law is issued (which is expected to occur in 2021), temporary provisions from the EVFTA will be directly applied.

The latter are listed in Annex 3 to Resolution 102, and include the following:

1. Patent

Thanks to the EVFTA, Vietnam will for the first time have a mechanism to compensate pharmaceutical patent owners for the reduction in effective patent life resulting from unreasonable delays in the granting of the first marketing authorization (MA).

Resolution 102 details the form of compensation applicable in Vietnam from August 1, 2020, in which the fee for using a protected invention in the delay period will be waived. However, within 12 months from the issuing date of the MA, the patent owner must provide the Vietnam IP Office with a written confirmation on unreasonable delays issued by the Drug Administrative of Vietnam (DAV). According to Resolution 102, a delay is recognized if there is no feedback/opinion from the DAV on a submitted MA dossier more than 24 months after the submission date.

This is very good news for patent owners. However, this compensation is only a bonus measure, rather than an aid to overcome the gap between the EVFTA provisions and the IP Law on this issue. The EVFTA recommends compensation in the form of a patent term extension, rather than monetary compensation as Resolution 102 stipulates.

2. Design

Under the current IP Law, a design is defined as “the external appearance of a product expressed in shapes, lines, colors or any combination thereof.” As from the EVFTA’s effective date of August 1, 2020, the definition will be changed to “the external appearance of a finished product or a component for assembling a finished product. The external appearance is expressed in shapes, lines, colors or any combination thereof and is visible during use of the product.” [The changes are underlined.]

Briefly, provisions of the EVFTA require that for the design of a component of a product to be registrable for protection, it needs to be visible in the state when it is assembled in the finished product. According to the current regulations in Vietnam, a component of a product is considered to be a product and, therefore, it is usually visible. The above change is to differentiate a finished product from a component of a finished product, and then add a requirement that the component must be visible when assembled, to comply with the EVFTA.

3. Trademark

Under the current law, to stop the use of a registered mark that may mislead the public as to the nature, quality, or geographical origin of the goods or services bearing the mark, an invalidation action must be carried out, on the grounds that such trademark did not meet protection requirements at the time registration/protection was granted. However, the time limit for such invalidation action is only five years from the grant date. Once the time limit has expired, it is not possible to invalidate the mark.

In addition, the above invalidation action can only be applied if the misleading use had already occurred at the time of registration of the mark. If the misleading use occurred only after the mark’s registration, there are no legal grounds to request revocation of such mark.

Now the EVFTA has filled in this gap by providing that “any use of a registered trademark by the proprietor of the trademark or with his consent in respect of the goods or services for which it is registered that is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services shall make the trademark liable to revocation or alternatively be prohibited by relevant domestic law.”

As such, a revocation action can be carried out at any time during the valid term of the registered/protected trademark; and even if the mark did not mislead the public at the time of its registration, if its subsequent use can mislead the public, revocation is possible. This provision is helpful not only to protect consumers’ rights, but also to alert trademark owners about the appropriate use of their registered marks.

The above provision will be applicable as from the effective date of August 1, 2020, until the IP Law is amended to domesticize such provision.

For more details on the EVFTA’s IP provisions, please contact us at [email protected].

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