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June 19, 2019

Vietnam’s IP Law Amended to Comply with CPTPP

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On June 14, 2019, the National Assembly of Vietnam ratified a law amending and supplementing the Law on Insurance Business and the Law Intellectual Property (IP Law), with the primary purpose being to bring the existing laws in line with the terms of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect in Vietnam on January 14, 2019. The key changes in the amended IP Law are presented below.

Patents

Grace period applicable to utility patents

Under the amended IP Law, an invention will not be considered to lack novelty or an inventive step due to public disclosure if: (i) such public disclosure is made by the patent applicant or by a person that obtained the information directly or indirectly from the patent applicant; and (ii) the patent application is filed within 12 months from the date of public disclosure.

This exception does not apply to circumstances where an invention is disclosed in a patent application or granted patent which is made available to the public or published by a patent office, unless erroneously published or unless the application was filed without the consent of the inventor or their successor in title, by a third person who obtained the information directly or indirectly from the inventor.

Previously, the grace period for public disclosure was much shorter, just six months from the date of disclosure, and applied to only a limited number of circumstances.

Geographical Indications

Determination of whether a term is the common name of goods

Although common names of goods were already ineligible for protection as geographical indications under the previous IP Law, there were no details on the method or criteria for determining whether a term was a common name. Under the amended IP Law, this will now be based on the awareness/perception of the relevant Vietnamese consumers.

Third-party opposition to geographical indication applications

Under the amended IP Law, a geographical indication is considered identical or similar to a registered trademark, or a pending trademark under an earlier application, when the use of such geographical indication is likely to cause confusion (instead of “will cause confusion” under the previous IP Law) as to the origin of the prior trademark. This amendment not only extends the protection of a registered trademark, but also provides another ground for opposition to a geographical indication application, by adding pending trademarks under earlier applications.

Recognition and protection of geographical indications under international agreements

The amended IP Law adds provisions concerning the protection and recognition of geographical indications under international agreements, which were not clearly mentioned in the previous law. Under the amended IP Law, rights to geographical indications can be established under international agreements to which Vietnam is a contracting party, without the need to undergo a separate registration procedure in Vietnam. Accordingly, for a request for recognition and protection of a geographical indication under international agreements, the procedure for publication, opposition, assessment of registrability and determination of the scope of protection for that geographical indication will be implemented similarly to the procedures applied for an application for geographical indication registration filed before the NOIP.

Trademarks

Electronic filing system

In addition to the existing paper filing system, applications for IP protection under the amended IP Law can be filed via an electronic application system managed by the NOIP. In fact, although there were no specific provisions concerning electronic filing in the previous law, the NOIP has been using the electronic application system for trademarks and other IP rights since 2017.

Recordal of trademark license agreements

Under the amended IP Law, a license agreement is valid even without recordal at the NOIP, as previously required. It should be noted that such exemption is only available for trademark license agreements. Licenses for other IP rights must still be recorded with the NOIP to be valid.

Use of trademark by licensee

Under the amended IP Law, the use of a trademark by a licensee constitutes use of mark by the trademark holder (for defense against non-use cancellation, for example). This was not clearly stated in the previous law.

Enforcement of IP Rights

Grounds for claiming compensation caused by IP infringement

Under the amended IP Law, it is possible for a holder of IP rights to claim compensation for infringement on any legal basis which the rights holder is able to prove. Under the CPTPP, such determination basis could include lost profits, the value of the infringed goods or services measured by the market price or the suggested retail price, or the infringer’s profits generated from the infringement. This is much more flexible than the previous law, which allowed only certain methods/approaches for calculating damages.

Attorney’s fees

In IP lawsuits, both the plaintiff and the defendant are entitled under the amended IP Law to request the court to force the other party to pay reasonable attorney’s fees. This was previously only available to the plaintiff. The defendant may request attorney’s fees if it is concluded to have not committed an IP infringement.

Abuse of IP rights

To comply with the CPTPP, a new provision concerning compensation for the abuse of IP rights is included under the amended IP Law. In particular, any parties suffering from damages caused by the abuse of IP rights by the rights holder are entitled to request the court to force such rights holder to compensate for the damages, including but not limited to reasonable attorney’s fees. The basis for determining the abuse of IP rights, however, remains vague.

Obligations of customs to provide information on suspected infringing goods

Under the amended IP Law, within 30 days from the issuance date of a decision on suspending customs procedures, the customs agency must provide the rights holder with information on the name and address of the shipper, exporter, consignee, or importer; and a description of the goods, quantity of goods, and country of origin of the goods (if known). Previously, customs was only obliged to provide information to IP rights holders if there was a request for suspension and inspection.

Effectiveness

The amended IP Law will take retroactive effect from January 14, 2019 (i.e., the date of entry into force of CPTPP in Vietnam). Accordingly, provisions under the amended IP Law will apply to:

  • Applications for industrial property rights submitted after January 14, 2019;
  • Requests for invalidation of registered patents, utility models and geographical indications submitted after January 14, 2019;
  • Procedures for cancellation of registered trademarks implemented after January 14, 2019; and
  • Procedures for enforcement of IP rights as requested from January 14, 2019 onwards.

With these changes, Vietnam’s IP Law is increasingly in line with the requirements set out under the CPTPP. However, there are still some matters which have not yet been fully addressed, such as the registration of sound/scent marks and the recognition of well-known trademarks. Further amendment and supplementation of IP legislation is expected soon.

Practices

Intellectual Property

Location

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