You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

September 8, 2016

Vietnam: Draft Circular on Compulsory Licensing

Subscribe to Updates
Managing Intellectual Property

Vietnam’s Ministry of Health is drafting a circular on compulsory licensing for pharmaceutical patents. From the view of protecting and promoting innovation in the industry, it is worthwhile to consider whether this is the appropriate time to introduce such regulations. This circular, a draft version of which has been released for public comment, could create a slippery slope into abuse of the patent system if certain shortcomings are not addressed.

International Practice

The TRIPs Agreement, since taking effect in 1995, has recognized compulsory licensing as an exception to patent rights in restricted situations, setting out conditions and limitations for any invocation of the compulsory licensing mechanism. The 2001 Doha Declaration on the TRIPS Agreement and Public Health shed further light on compulsory licensing in the pharmaceutical area.

In Southeast Asia, several countries have granted compulsory licenses for pharmaceutical products. Malaysia took the lead in 2004, issuing the world’s first compulsory licenses under TRIPs to allow importation of three medicines combatting HIV/AIDS. Indonesia followed suit and issued compulsory licenses in two waves, one in 2004 and another in 2012. During the political chaos from 2006 to 2008, Thailand also granted compulsory licenses for seven drugs.

At first, these countries issued the compulsory licenses to address healthcare crises related to dangerous epidemics. However, over time, there has been a tendency to use compulsory licenses to facilitate public access to drugs to treat non-communicable diseases as well. This has stirred up massive debates in these countries and also in the international forum in respect of the legitimacy of compulsory licensing and the real benefits it could bring about.

As a developing country with a large and diverse population and corresponding healthcare needs, Vietnam has been keeping an eye on regional practice, with a view to introducing the most effective mechanism of compulsory licensing.

Domestic Situation

The concept of compulsory licensing first appeared in Vietnamese legislation in the Ordinance on Protection of Industrial Property (1989), and was significantly improved through the passage of the Law on Intellectual Property of 2005. However, Vietnam has still not made full use of the mechanism. The closest it has come was in the outbreak of the bird flu epidemic, which claimed a toll of 41 victims in November 2005. The regulatory agencies considered granting compulsory license for certain antiviral drugs, but the manufacturer eventually issued voluntary licenses to some local producers and no compulsory license was needed.

However, even if there had been no voluntary licenses, Vietnam would have encountered statutory obstacles in granting the compulsory license due to the lack of specific regulations on the issue, as well as the country’s effort to attract investment as it readied for WTO accession. The current effort to formally legislate compulsory licensing should also be considered in the context of Vietnam’s desire to attract investment and the need for compliance with international commitments.

Shortcomings of the Draft Circular

While the draft circular marks a serious effort to provide further guidance on compulsory licensing in the pharmaceutical area, it creates some discrepancies with other existing legal instruments regarding matters such as the conditions for granting compulsory licenses, the procedures for examining applications, and the calculation of “adequate remuneration” in the event of a compulsory license. The draft also runs contrary to the TRIPs Agreement as well as the IP Law in its omission of a requirement for a prior unsuccessful negotiation between the patentee and the compulsory license applicant.

In some articles, the wording is quite broad and vague, which could invite arbitrary application or confusion in implementing the regulations. Most critically, under Article 4, compulsory licensing could apply in cases involving “…a drug necessary for the treatment of diseases with high contraction rates in the community, a drug necessary to save a human life, and other events as determined by the Minister of Health”. In other words, almost any medicine could be vulnerable to compulsory licensing.

Patent holders may feel the current draft is biased against them, as it does not offer any regime allowing patent holders to raise their dissent or even state their positions during the compulsory license examination process, and limits their avenues to protest compulsory license rulings. In addition, the draft does not require applicants to pay fees, but compels patent holders to pay fees when applying for a termination of the compulsory license.

Finally, it is debatable whether there is an urgent need for a compulsory licensing circular at this juncture. Since the bird flu outbreak in 2005, there have been no situations that could trigger compulsory licensing. Other issues such as the obstacles in the withdrawal of marketing authorization in cases of patent infringement are arguably more pressing and more vital to the development of Vietnam’s medical and scientific capacity. Regardless, before enacting this circular, we believe the Ministry of Health needs to go to greater lengths to make the draft consistent with other laws and ensure fair treatment for all businesses in the economy.

Download Full Article
Related Professionals

Practices

Intellectual Property

Location

RELATED INSIGHTS​ 

July 24, 2026
As food innovation continues to accelerate, manufacturers are increasingly introducing ingredients derived from new sources, produced using novel technologies, or lacking a significant history of human consumption. While these innovations create new opportunities for the food industry, they also raise important questions regarding consumer safety. For this reason, many jurisdictions, including Thailand, the European Union, Australia and New Zealand, Canada, and Singapore, require a premarket safety assessment for novel food ingredients before they can be placed on the market. The objective of this assessment is to ensure that each ingredient is safe for its intended use and level of consumption, does not present toxicological, allergenic, microbiological, or nutritional concerns, and will not mislead consumers. Scientific authorities typically evaluate the ingredient’s identity, manufacturing process, composition, specifications, anticipated dietary exposure, toxicological information, nutritional impact, and history of use before determining whether it can be marketed. Against this background, the Thai Food and Drug Administration (FDA) recently took an important step toward improving regulatory transparency by publishing, for the first time, a consolidated public list of substances that have successfully completed the Thai FDA’s safety assessment process, including substances determined to be novel foods and those determined not to fall within the novel food category. The list identifies the approved substances, the corresponding manufacturers or importers, approval dates, and the approved conditions of use. Although the publication does not change the existing legal framework governing novel food approvals, it provides businesses with greater visibility into the Thai FDA’s regulatory precedents and the types of substances that have previously been accepted through the safety assessment process. The full announcement is available on the Thai FDA’s website. As the list is now publicly available, it also provides useful insight into the types of substances that have successfully completed the Thai FDA’s safety assessment process.
Read More
July 24, 2026
Indonesia has updated its fee framework for intellectual property (IP)-related government services, with implications for IP owners, licensees, lenders, digital platforms, and businesses operating in the country. Government Regulation No. 30 of 2026 on Types and Tariffs of Non-Tax State Revenue Applicable to the Ministry of Law (GR 30/2026) was promulgated on July 2, 2026, and will take effect on August 1, 2026. Key Takeaways GR 30/2026, which replaces the relevant IP service fees under Government Regulation No. 45 of 2024, reorganizes the fee schedule into separate categories for copyright, industrial designs, patents, layout designs of integrated circuits, trade secrets, trademarks, geographical indications, IP enforcement, and other categories. The most commercially relevant changes include a new copyright recordation tariff exemption for songs and music, higher fees for several trademark and geographical indication services, new IP enforcement service fees, and a new fee type for registration of fiduciary security over IP rights objects. In addition, this is the first major update for trademark fees in approximately 10 years. GR 30/2026 is significant not only as a fee update but also as a further indication of Indonesia’s increasing recognition of IP as a financeable commercial asset. By expressly assigning fees to the registration of fiduciary security over IP rights objects, the regulation places IP-backed collateral filings within the Ministry of Law’s administrative service framework. While GR 30/2026 does not create a new secured-transactions regime, this development is relevant for lenders, borrowers, and IP owners structuring financing arrangements secured by trademarks, patents, copyrights, industrial designs, or other registrable IP rights in Indonesia. Copyright: New Fee Exemption for Songs and Music Recordation For copyright, GR 30/2026 creates a fee-exempt category for recordation of works or related-rights products for songs or music, while maintaining a separate category for other works and related-rights products. It
Read More
July 21, 2026
Thailand’s Ministry of Digital Economy and Society (MDES) published a notification establishing an expedited court-ordered takedown mechanism for online content in cases of “urgent necessity.” The notification, which was issued on July 17, 2026, under the Computer Crime Act B.E. 2550 (2007), as amended, took effect the following day. It significantly expands the categories of content subject to rapid government-initiated removal. Content Categories Subject to Takedown The notification defines “urgent necessity” (section 20, paragraph 5, of the Computer Crime Act) as circumstances where any delay in suppressing computer data may impact national security, religion, the monarchy, good morals, social culture, or public order. In this regard, it establishes four broad categories of content: Computer Crime Act offenses. National security offenses. IP and other criminal offenses, where it is contrary to public order or good morals and a competent officer has requested its suppression. Content contrary to public order or good morals, a broad residual category encompassing 14 subcategories approved by the Computer Data Screening Committee. The fourth category is the most expansive. Its 14 subcategories include: Content defaming, mocking, satirizing, or devaluing the monarchy. Online gambling advertising or facilitation. Offering illegal firearms for sale. Offering baraku (hookah) products or e-cigarettes for sale. Offering cannabis inflorescences or processed cannabis products for sale. Advertising or soliciting prostitution. Content inciting violence, hatred, or social division. Unauthorized overseas employment advertising. Offering boiled kratom juice for sale. Online sale or advertising of alcoholic beverages. Content satirizing or degrading Buddhism. Money lending at interest rates exceeding legally prescribed limits. Advertising or disseminating information about surrogacy services. Forgery of documents, cards, or official documents. Enforcement Procedure In cases of urgent necessity, a competent official assigned by the MDES permanent secretary must file a petition with supporting evidence to the court with jurisdiction, requesting an order to
Read More
July 15, 2026
Ambush marketing refers to a strategy in which a business associates itself with an event, campaign, or brand without paying for official sponsorship rights. The tactic is most visible in sports, concerts, and festivals, where official sponsors have invested substantially for exclusivity. Ambush marketers may use suggestive wording, event-themed imagery, athlete endorsements, venue-adjacent promotions, or social media campaigns implying a commercial connection with the event. Common Forms of Ambush Marketing Ambush marketing typically takes one of the following forms: Direct ambushing: using event names, logos, or mascots suggesting authorization Coattail ambushing: sponsoring an athlete or broadcaster connected with the event Subtle ambushing: themed advertising, venue-adjacent campaigns, or similar visual cues The legal analysis in each case turns on whether the marketing crosses from permissible event-based advertising into infringement, passing off, deception, or wrongful exploitation of goodwill, and the risk assessment is necessarily fact-specific. Thailand has no dedicated ambush marketing statute, so legality depends on execution. A campaign that merely comments on a public event may be permissible, but one that uses protected marks, creates consumer confusion, misrepresents sponsorship status, or makes unsubstantiated claims may trigger liability under various Thai laws, as laid out below. Ambush Marketing and Thailand’s Trademark Act The Trademark Act B.E. 2534 (1991) is the primary tool for addressing campaigns that use registered trademarks, event names, logos, mascots, or confusingly similar signs. The law gives registered trademark owners the exclusive right to use their mark for registered goods, and infringement risk arises when a nonsponsor uses an event mark or a confusingly similar sign in advertising. Even referential or playful use may create liability if it causes public confusion as to sponsorship or commercial connection. The law also preserves passing-off claims for unregistered marks. This matters because event names, taglines, or mascots may not always be
Read More