On February 9, 2021, Vietnam’s Ministry of Public Security (MPS) released the full text of the Draft Decree on Personal Data Protection (“Draft PDPD”) for public consultation, after having released an outline in December 2019, with an ambitious goal for the Draft PDPD to be promulgated and take effect on December 1, 2021. This date has now passed and the Draft PDPD remains unissued, with no concrete details on when the situation will change. Many new contents have been introduced in the Draft PDPD (please see our previous articles here and here). In this article, we take a deeper look at the issues that have attracted the most attention from national and international stakeholders as they wait for the draft to be finalized and promulgated. Please click below to read the full article.  

On November 17, 2021, Vietnam deposited its instrument of accession to the World Intellectual Property Organization Copyright Treaty (WCT), becoming the 111th member of the WCT. The provisions of the WCT will officially take effect in Vietnam three months after the date the document is handed over to the Director General of WIPO, i.e., by February 17, 2022. The WCT is a special agreement under the Berne Convention that was first adopted in 1996 to deal with the protection of works and their copyright in the digital environment. The WCT additionally deals with two important objects that should be protected by copyright: (i) computer programs created in any form of expression, and (ii) databases of any kind, as long as the selection or arrangement of database content is intellectually creative. With respect to rights granted to authors, in addition to those recognized by the Berne Convention, the WCT also grants (i) distribution rights, (ii) rental rights, and (iii) broader rights of communication to the public. With respect to limitations and exceptions, Article 10 of the WCT extends to all rights the application of the “three-step” test originally set forth in Article 9(2) of the Berne Convention for the right to reproduction. That is, member states may legislate limitations and exceptions in national law, provided they are in certain special cases (i.e., they are not overly broad), do not conflict with the exploitation of the work, and do not prejudice the legitimate interests of the author. Member states may introduce new exceptions and limitations appropriate to the digital environment, as long as the conditions of the “three-step” test are met. Vietnam’s accession to the WCT not only helps the country meet its commitments in new-generation free-trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), but also creates an effective legal foundation to protect works and copyrights in the digital environment, currently one of the most problematic IP issues in Vietnam. Together with the upcoming amendments to Vietnam’s Law on Intellectual Property, we expect that Vietnam’s accession to the WCT will contribute to the transparent and effective protection of copyrights, especially in cyberspace.

As international integration has been one of Vietnam’s principal economic goals, the country’s demand for a highly educated labor force equipped with international-standard education has become higher and higher. As studying abroad may be financially burdensome, international-standard education offered by local entities has become a reasonable choice for many Vietnamese students. As a result, the sector has attracted more and more investors, both local and foreign. Some popular options for global brands to enter the promising education market of Vietnam are discussed below. 1. Establishing a Foreign-Invested Educational Institution Foreign-invested educational institutions (FIEI) include (i) short-term training institutions such as foreign language centers; (ii) kindergartens; (iii) compulsory educational institutions (primary, intermediate, or high schools or combined schools); (iv) universities; or (v) branches of foreign universities). To establish a FIEI in Vietnam, a foreign investor needs to either establish a wholly foreign-owned enterprise (WFOE) or form a joint venture company with a local partner. The established company must have in its license a business line of providing educational services (e.g., primary education services or university education services) because Vietnam practices the doctrine of corporate ultra vires, meaning that all enterprises, including WFOEs and joint ventures, may only engage in activities (business lines) which are approved by the licensing authorities. Moreover, under Vietnamese laws, educational services are a conditional business line; thus, the established company must obtain required sublicenses for providing these services in Vietnam. Typically, some or all of the following steps will need to be carried out for a FIEI to be established and start operating in Vietnam: Obtaining an Investment Registration Certificate (IRC). The IRC will recognize the contents relating to the investment project, such as the investor(s), project location, objectives and scale of the project, investment capital, investment incentives and restrictions, etc. Obtaining an Enterprise Registration Certificate (ERC). The ERC will provide for the corporate details such as the company name, registered office address, charter capital, owner’s details, and legal representative(s) of the company. Obtaining a decision on establishment of an educational institution. Obtaining an approval for providing educational operations. The above licenses are granted subject to certain conditions regarding educational planning, investment capital, facilities, teachers, and the ratio of Vietnamese students. Establishing a FIEI may be a good choice for foreign investors who want to do long-term business with stability. This method also gives investors the ability to manage and operate their businesses directly. However, the investor would likely face greater expenses in establishing, maintaining, and expanding its business in Vietnam as compared to the other methods discussed below. Moreover, establishing a company would require a greater outlay of time and resources for the foreign investor to sufficiently acquire or develop knowledge of the local market. 2. Acquisition Acquiring equity in an existing education company is suitable for foreign investors who wish to access the Vietnam market without the need to go through the cumbersome and time-consuming process of obtaining all the licenses for establishing an FIEI as set out above. Instead, the existing education company may need to carry out procedures relating to equity investment registration, amendment of investment and corporate registration, and amendments of sublicenses regarding the establishment and operation of the educational institution. However, Vietnamese laws currently remain silent on amendments of sublicenses regarding the establishment and operation of an educational institution due to equity acquisition by foreign investors. Thus, the required procedures may be carried out on a case-by-case basis upon obtaining guidance from the relevant authorities. 3. Franchising Franchising is one of the fastest ways for foreign brands to have their goods or services sold in the Vietnam market. As of mid-2021, more than 260 foreign franchisors had registered to carry out franchising activities in Vietnam, mainly in the business sectors of food and beverages (42%); fashion (21%); education (9%), and retail stores (8%). Franchising in educational services has certain advantages compared to establishing a Vietnam subsidiary. The most obvious benefit of franchising is the ability to expand a business by using the manpower, capital, and local market knowledge of franchisees, while still maintaining the ability to control the quality of the educational services. A franchisor is also able to direct how it would like the local franchisees to develop the business, such as by setting up minimum targets for opening campuses. A foreign franchisor entering Vietnam through a franchising arrangement with a Vietnamese partner does not need to have a legal presence in Vietnam. However, the franchised business system must have been operating for at least one year in any country in the world prior to franchising. In Vietnam, a foreign franchisor needs to register its franchising activities with the Ministry of Industry and Trade (MOIT). In practice, for franchises in educational services, the MOIT expects foreign franchisors to prove their experience in the education sector, their education method that they offer prospective franchisees, as well as their legitimate ownership over trademarks and other IP rights related to the educational franchise systems. 4. Licensing Coupled with Provision of Management Services A foreign education company may also get brand presence in Vietnam through contractual arrangements with a local partner, including a license agreement and a management agreement. The most advantageous factor of these arrangements is that no registration procedures are required. With regard to the license agreement, a foreign licensor might grant to the licensee in Vietnam the rights to use its brands and trademarks in connection with the educational services. For protection of the licensor’s ownership of trademarks relating to educational services, the licensor should register for protection of such trademarks in Vietnam at the Intellectual Property Office of Vietnam or through the World Intellectual Property Office as soon as possible. In addition to granting the rights to use its brands and trademarks, the foreign licensor may enter into a management agreement with the local licensee to provide its services of management of the school bearing its brands and trademarks. It is recommended that foreign investors should conduct sufficient due diligence on potential local partners to ensure that they have

On November 8, 2021, the Vietnamese government issued Decree No. 98/2021/ND-CP on the Management of Medical Devices (“Decree 98”). The new decree will take effect from January 1, 2022, replacing Decree No. 36/2016/ND-CP and its amendments on the same subject (“Decree 36”). Below are the main highlights of Decree 98: 1. Classification of Medical Devices Under Decree 98, responsibility for the classification of medical devices is given to the organization registering or declaring the medical device. Under Decree 36, this responsibility was reserved for Vietnamese organizations qualified for medical device classification. 2. Clinical Trials of Medical Devices Decree 98 provides stricter and more detailed requirements on clinical trials. Particularly, medical device trials will include three phases, in which phases 1 and 2 need to be finished before the product registration, while phase 3 will be conducted after the medical devices are approved for circulation, following the specific requirement from the authorities. This requirement aims to continue evaluating the safety and efficacy of medical devices after they are widely used in the community in line with their usage conditions. 3. Medical Device Registration Similar to the current regulations, Decree 98 requires that medical devices must be registered with the Vietnamese authority (i.e., must obtain registration numbers) before being imported/manufactured for circulation in the Vietnam market. However, Decree 98 further stipulates new requirements as below. Validity of registration numbers Under Decree 98, the registration numbers for all classes of medical devices, not only Class A medical devices as in the current regulations, are valid indefinitely, except for registration numbers granted under the emergency registration procedure. Registration procedure for Class A/B medical devices Instead of having to register with the central level authority with a complex registration dossier as currently required, Decree 98 allows Class B medical devices to be subject to a simpler registration procedure, namely, “Declaration of applied standard” with the provincial level authority, which is the same procedure as for the lowest risk Class A devices. Registration procedure for Class C/D medical devices For the first time in Vietnam, Decree 98 sets out three procedures to apply for registration of Class C/D medical devices: the normal registration procedure, a quick registration procedure, and an emergency registration procedure. The Ministry of Health’s evaluation timeline for handling registration dossiers for Class C/D medical devices under the normal procedure will be up to 45 days, while the timeline under the quick and emergency procedures will be only 10 days. Quick registration procedure: Class C/D medical devices that are subject to the quick registration procedure will include: Products granted a Certificate of Free Sale (CFS) or marketing authorization (MA) by at least one of the following organizations/countries: the United States Food and Drug Administration; the Therapeutic Goods Administration of Australia; Health Canada; the Ministry of Health, Labor and Welfare or Pharmaceuticals and Medical Devices Agency of Japan; an EU-member country, the U.K., or Switzerland; the National Medical Products Administration of China; the Ministry of Food & Drug Safety of South Korea; or any organization included in the list of MA-issuing organizations recognized by the Vietnam authority (“reference countries”). Products granted import licenses or registration/MA numbers for commercial purposes in Vietnam Emergency registration procedure: This procedure is applicable to Class C/D medical devices used for epidemic prevention and control and overcoming consequences of natural disasters and catastrophes that are included in the list stipulated by the Minister of Health and fall into one of the following: Products approved for circulation or emergency use by one of the reference countries; Products included in the WHO’s list of products permitted for emergency use; Products included in the list of popular products declared by the EU Health Security Committee; Products granted import licenses or registration/MA numbers for commercial purposes in Vietnam; or Products produced in the form of technology transfer or processing of the above products. 4. Price Management In an effort to control the price of medical devices, Decree 98 includes a new requirement in which registration number holders must declare the prices of their medical devices on the Portal of Medical Device Management before putting the medical devices on the Vietnam market; the actual prices must not be higher than the declared prices. The authorities may question the registration number holder about grounds for the declared prices at any convenient time. 5. Importation of Medical Devices Decree 98 sets out situations where medical devices without registration numbers must have import licenses. These include, among others, medical devices for scientific research, tests, trials, quality assessment, or training; medical devices for aid, humanitarian aid, gifts, fairs, exhibitions, displays, or product introduction; and medical devices meeting urgent needs for national defense, security, epidemic prevention and control, and overcoming consequences of natural disasters and catastrophes. 6. Medical Device Advertisement Decree 98 completely removes the procedure for approval of medical device advertising contents. Instead, the holders of medical device registration numbers or their authorized entities will be responsible for publicly declaring the intended content and form of the advertising on the Portal of Medical Device Management before conducting the advertising. 7. Transitional Regulations Decree 98 sets out the following transitional mechanisms: Medical devices produced/imported into Vietnam before January 1, 2022, may be continuously circulated until they are liquidated as stipulated or until their expiry date. For import licenses/registration numbers granted before January 1, 2022: Registration numbers granted under Decree 36 and its amendments will be valid indefinitely. MAs granted to domestic medical devices will be valid until their expiry date. Import licenses for medical devices that were granted from January 1, 2018, will be valid until December 31, 2022. Import licenses for medical devices that are IVD biologicals will have no limit on quantity. For Class C/D medical devices that are not subject to import licenses and whose classification results were published on the Portal of Medical Device Management, they can be continuously imported until December 31, 2022, with no limit on quantity and without an approval letter from the Ministry of Health. MAs for medical devices that are IVD