Intellectual Property Vietnam Client Alert August 2019 For further information, please contact: Tran Manh Hung Managing Partner +84 24 3936 9398 firstname.lastname@example.org Ninh Thanh Thuy Special Counsel +84 24 3936 9406 ThanhThuy.Ninh@bmvn.com.vn Nguyen Tien Dat (Dustin) Paralegal +84 24 3212 3856 TienDat.Nguyen@bmvn.com.vn BMVN is a fully licensed law firm, in association with Baker McKenzie in Vietnam. New amendments and supplements on the Intellectual Property Law On 14 June 2019, the Vietnam National Assembly passed Law No. 42/2019/QH14 (“Law No. 42”), amending and supplementing certain articles of the Insurance Business Law and the Intellectual Property Law (“IP Law”). The purpose of the amendment and supplement of the IP Law is to promptly make the national legislation compatible with the requirements set out in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) of which Vietnam is a signatory. Law No. 42 will take effect on 01 November 2019, except for certain regulations that have been effective since 14 January 2019 applying to the following cases: Applications for establishment of industrial property rights submitted from 14 January 2019; Requests for invalidation of invention patents, utility solution patents, and certificates of geographical indications registration granted on the basis of applications for registration of industrial property rights filed from 14 January 2019; Requests for cancellation of certificates of trademark registration submitted from 14 January 2019; Lawsuits regarding infringement of IP rights handled by competent authorities from January 14, 2019 onwards; and Other requests regarding IP rights protection carried out from 14 January 2019. The amendments and supplements of IP regulations under Law No. 42 are related to (i) industrial property objects, including trademarks, patents, and geographical indications, (ii) electronic filing of applications for registration of industrial property rights, and (iii) IP rights enforcement. 1. Amendments and supplements regarding industrial property objects, namely, trademarks, patents and geographical indications a. Trademarks Use of trademark by licensee (Art. 136.2) “Art. 136.2: The owner of a trademark shall be obliged to use it continuously. The use by a licensee under a trademark license contract is considered as an act of using the owner’s trademark. In case the trademark has not been used for a period of consecutive five years or more, the validity of the trademark registration certificate shall be terminated in accordance with Art. 95 of this Law”. 2 BMVN International LLC August 2019 Whilst the current IP Law is ambiguous in assessing evidence of trademark use by a licensee, the amended IP Law has clearly pointed out that the use of a trademark by a licensee will also be considered as usage of the trademark to nullify a non-use cancellation against its registration. No requirement for trademark licensing recordal (Art. 148.3) “Art. 148.3: A license contract of an industrial property object provided in Clause 2 of this Article, except for trademark license agreements, shall be legally effective against a third party only upon its registration with the state administration authority of industrial property rights”. Under the current Law on IP, in order for a trademark license agreement to be effective against a third party, two parties must record such agreement with the Intellectual Property Office of Vietnam (“VNIPO”). Nevertheless, in accordance with the amended IP Law, such a trademark license agreement will be deemed valid without any recordal requirement at the VNIPO. b. Patents Novelty of inventions (Art. 60) The amended IP Law has expanded exceptions of the novelty of inventions regarding exposers, publication methods, and places as well as extended time for enjoying the exceptions from 6 months to 12 months from the publication date. In particular, Art. 60 of the IP Law regarding the novelty of inventions is amended and supplemented as follows: "3. It is considered that an invention does not lose its novelty if it is directly or indirectly published by the person entitled to registration specified in Article 86 of this Law, or by the person who has information about the invention provided that the patent application is submitted in Vietnam within 12 months from the date of publication. 4. The provisions of Clause 3 of this Article shall also be applied to any invention published in the industrial property application or industrial property protection titles announced by industrial property management authority in case the announcement is not conformable with provisions of laws or the application is submitted by a person who does not have the right for registration.” Inventive nature of inventions (Art. 61) Regarding inventive level of inventions, the IP Law has been supplemented Art. 61.2 as follows: “Technical solution which is an invention disclosed in accordance with Clauses 3 and 4, Article 60 of this Law shall not be used as a basis for evaluation of the inventive level of invention”. 3 BMVN International LLC August 2019 c. Geographical Indications Objects ineligible for protection as geographical indications Firstly, there is a new criterion to assess a common name of goods that does not qualify for geographical indication protection in Vietnam. In particular, Art 80.1 of the current IP Law regulates that “names or indications that have become generic names in Vietnam would not be protected as geographical indications” without any explanation about the definition of “generic”. To clarify this, Art. 80.1 under the amended Law has pointed out that the common name of goods will be determined by awareness/perception of the relevant consumers in Vietnam, particularly as follows: “Art. 80.1. Objects ineligible for protection as geographical indications: Names, indications having become generic names of goods in accordance with awareness/perception of the relevant consumers in Vietnam”. Secondly, objects ineligible for protection as geographical indications extend to those that are identical or similar to pending trademarks with earlier filing or priority date while the current IP Law only limits to registered trademarks. Particularly, Art. 80.3 of the current IP Law has been amended as follows: “Art. 80.3. Any geographical indication that is identical or similar to a trademark under protection or being submitted under a trademark application with early filing or priority date, the use of which may cause confusion as to commercial origin of goods”. Recognition and protection of geographical indications under international agreements Under the amended IP Law, the regulation pertaining to the establishment of IP rights of geographical indication is separated from others IP objects in comparison with the current IP Law. In particular, Art. 6.3(a) of the IP Law has been amended as follows: “Art. 6.3(a). Industrial property rights to geographical indications shall be established on the basis of decisions on granting protection title issued by competent authorities in accordance with registration procedures specified in this Law or international agreements to which the Socialist Republic of Vietnam is a contracting party”. In addition, the amended IP Law has added a provision about the recognition and protection of geographical indications under international agreements, which was not clearly stipulated in the current Law. Particularly, Art. 120 has been supplemented as follows: “Art. 120(a). International proposals and processing of international proposals on geographical indications 1. Proposals for recognition and protection of geographical indications in accordance with international agreements, to which the Socialist Republic of Vietnam is negotiating, are called international proposals. 4 BMVN International LLC August 2019 2. The announcement of international proposals and handling of third-party opinions, assessment of conditions for protection of geographical indications in international proposals shall comply with the equivalent provisions specified in this Law for geographical indications in geographical indication applications submitted to industrial property rights authority”. 2. Electronic filing of applications establishing industrial property rights Article 89 of the IP Law is amended by adding Clause 3 as depicted below to officially affirm the electronic filing system apart from the paper formfor registration applications to establish industrial property rights: “Article 89.3. Applications for establishment of industrial property rights shall be filed, in paper form, with the State authority in charge of industrial property rights or in electronic form via the online filing system”. 3. Enforcement of IP rights a. Attorney’s fees Under the current IP Law, only plaintiff may claim reasonable attorney’s fees in an IP lawsuit. If the plaintiff does not succeed in its IP infringement claim, the defendant cannot claim any attorney’s fees that have been incurred for the lawsuit. However, under Article 198.4 of the amended IP Law, the defendant in an IP lawsuit can now request the court to force the plaintiff to reimburse for their reasonable attorney’s fees if it is concluded to have not committed an IP infringement: “Article 198.4. The defendant in a lawsuit over the infringement of intellectual property rights and receive acquittal from the Court is entitled to request the Court to order the plaintiff to reimburse for their reasonable expenses such as the cost of hiring a lawyer or other expenses in accordance with laws”. b. Abuse of protection procedure of IP rights In line with the CPTPP, the amended IP Law has provided a new clause, particularly Article 198.5, in relation to compensation of damages caused by the abuse of IP rights protection procedures. Specifically, any parties suffering from damages caused by the abuse of IP rights protection procedures are entitled to request the court to force such right holder to compensate for the damages and reasonable attorney’s fees. The said abuse includes deliberate acts beyond the scope or aims of the IP right protection procedures. “Article 198.5. In case an organization or individual abuses the procedures for intellectual property right protection and thus causes damage to another organization or individual, the organization and individual suffering damage is entitled to request the Court to force the abuser to pay damages, including reasonable attorney’s fees. Acts of abusing intellectual property rights 5 BMVN International LLC August 2019 protection procedures include acts of intentionally exceeding the scope or objective of this procedure”. c. New legal grounds for compensation claim caused by IP Infringement In addition to three methods of calculating damages as stated in Article 205.1 of the current IP Law, the amended one provides a further flexible approach that allows the plaintiffs to determine their own calculating methods of material damage as long as they are in accordance with the provisions of law. “Article 205.1. Where the plaintiff proves that an act of infringement of intellectual property rights has caused the plaintiff material damage, the plaintiff shall have the right to request the court to decide the amount of damages on one of the following bases: (c) Material damage calculated under other manners by the intellectual property right holder in accordance with provisions of law”. d. Customs Measures Article 218.1 of the current IP Law has been supplemented by adding a new regulation in which the customs office is required to furnish the IP right holders with information of suspected infringing goods within 30 days from the issuance date of a decision on suspending customs procedures, namely as follows(supplemented part is underlined): “Article 218.1. When an applicant for suspension of customs procedures has fulfilled the obligations stipulated in Article 217 of this Law, the customs office shall issue a decision suspending customs procedures with regard to the goods consignment in question. The customs authority shall provide the intellectual property rights holder with information on name and address of shipper; exporter, consignee or importer; description of goods; quantity of goods; origin of goods (if known), within 30 days from the date of issuance of the decision to apply administrative measures to handle trademark counterfeiting and smuggled goods specified in Clause 4, Article 216 of this Law”. * * * If you would like to discuss further, please do not hesitate to contact us. www.bakermckenzie.com/bmvn BMVN International LLC (in alliance with Baker & McKenzie) Unit 1002, 10th Floor, Indochina Plaza Hanoi 241 Xuan Thuy Street, Dich Vong Hau Ward, Cau Giay District, Hanoi, Vietnam Tel: + 84 24 3936 9398 Fax: + 84 24 3825 1432 ©2019 BMVN International LLC. All rights reserved. BMVN International LLC is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. 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