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News article27 May 2021

The EU–Vietnam Free Trade Agreement (EVFTA) and intellectual property (IP) protection: What EU SMEs should know

Vietnam is a thriving economy with a GDP of USD 340.821 billion – the fourth biggest in South-East Asia (after Indonesia, Thailand, and the Philippines), a population of 97.406 million people and a GDP per capita of USD 3 499 (in 2020)[1]. Despite the challenges of Covid-19, Vietnam has remained resilient, it expanded its GDP by 2.9% in 2020 – one of the highest growth rates in the world[2].

 

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(Photo source: https://pixabay.com)

The European Union (EU) and Vietnam have enjoyed robust commercial relations in recent years. Vietnam is the EU’s 15th most important trade partner worldwide, and the EU’s largest trading partner in South-East Asia in 2020[3]. The EU is also one of the largest foreign investors in Vietnam, with a total foreign direct investment of EUR 6.1 billion in 2019[4].

The EVFTA, which entered in force on 1 August 2020, is one of the important strategic enablers for boosting the economic growth of, and the cooperation between the two parties through the elimination of customs duties and non-tariff barriers, driving a boom in exports and imports as well as encouraging investment flows. The EVFTA also includes a dedicated chapter on IP protection (Chapter 12) that requires Vietnam to implement substantive changes to improve their current IP system.

According to the South-East Asia IP SME Helpdesk, the major commitments related to IP protection under the EVFTA that EU companies should know about are as follows:

 

Photo source: www.pexels.com

  • Geographical indications (GIs). A total of 169 European GIs (full list here) have been automatically recognised and directly protected in Vietnam since the EVFTA came into effect. Champagne, Feta, Parmigiano Reggiano, Rioja and Roquefort are some examples of EU GIs now being protected in Vietnam. EU farmers, businesses or associations producing and distributing products labelled with these GIs can now take action to stop illegal activities that sully their reputations through counterfeiting, misuse or other acts of unfair competition.

 

  • Patents. Pharmaceutical products are subject to a marketing authorisation procedure before being allowed onto the Vietnamese market. When there are unreasonable delays (i.e. if the Vietnamese authority fails to respond to an applicant without justifiable reasons after more than 24 months from the date of filing for marketing authorisation), the pharmaceutical patent owner is entitled to claim compensation by deducting the fee for using the patent. To be entitled to deduct the fee, the patent owner must submit a document confirming the delay (issued by the marketing authorisation authority) to Vietnam’s IP office within 12 months of the marketing authorisation being granted. Please note that Resolution No. 102/2020/QH14 (dated 8 June 2020) currently provides the legal background for this specific issue, and will remain applicable until an amendment to the existing IP law comes into effect.
  • Trade marks. Vietnam will apply the WIPO recommendations on the protection of well-known trade marks, which take additional parameters (not restricted exclusively to a trade mark’s degree of prominence amongst relevant consumers in a country) into consideration. In addition, a registered trade mark can be revoked if it misleads the public, particularly as to the nature, quality or geographical origin of a product. Thus, if EU companies notice that their trade mark has been registered in Vietnam by others and its use is misleading the public, this can be grounds for cancelling the infringing registered mark. Please note that this additional basis for revocation was included in Resolution No. 102/2020/QH14 (dated 8 June 2020) and will remain applicable until an amendment to the existing IP law comes into effect.
  • Copyright. Vietnam will accede to the WIPO Internet Treaties (the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty) to address the challenges associated with unauthorised access to and use of creative works on the internet and other digital networks. Phonogram performers and producers gain additional rights through the EVFTA, including the right to a single equitable remuneration for broadcasts and communications to the public.
  • Industrial designs. Following a commitment made in the EVFTA, on 30 September 2019 Vietnam deposited its instrument of accession to the Geneva Act (1999) of the Hague System for the International Registration of Industrial Designs. EU design applicants can now seek protection for their designs in Vietnam by using the Hague system (a practical business solution for registering up to 100 designs in 74 contracting parties, covering 91 countries, through the filing of a single international application).
  • Undisclosed information. If undisclosed test results or other data regarding pharmaceutical or agrochemical products are required by government agencies for marketing approval, the protection of such data against unfair commercial use or disclosure will be set for 5 years from the approval date.
  • Enforcement. Customs officers will be able to act ex officio – in other words, they can actively target and block shipments containing IP infringing goods without having to wait for a complaint. If needed, the IP rights holder can ask the authorities to apply provisional measures, such as the precautionary seizure or blocking of the movable and immovable property of the alleged infringer, including the blocking of his/her bank accounts and other assets. The authorities may consider ordering pecuniary compensation to be paid to IP owners in certain cases of unintentional infringement, instead of applying injunctions or corrective measures.

Vietnam’s government and relevant agencies are currently working on numerous changes to leverage the existing IP protection system, such as an amendment to the IP law (the draft amendment to the IP law has been published on the official site for public examination since November 2020 and will be submitted to the National Assembly for comments in October 2021), updating the Decree on E-commerce (to include stricter provisions related to IP infringement online), improving the online registration system and strengthening the effectiveness of IP enforcement measures (customs checks, investigations, the imposition of sanctions, etc.). These are positive steps from the Vietnamese government to align their entire IP protection system with international standards. This, in return, will enhance Vietnam’s competitiveness by creating a favorable environment for EU companies to safely access and operate in Vietnam’s markets.

The South-East Asia IP SME Helpdesk will continue monitoring the IP landscape in Vietnam to provide EU SMEs with further updates and practical IP advice. Check out our infographic on the EVFTA and IP protection here for further information.

South-East Asia IP SME Helpdesk (website here).

The South-East Asia IP SME Helpdesk is an initiative of the European Commission to support EU SMEs to protect and enforce their IP rights in the 10 South-East Asian countries. All services offered by the Helpdesk are free of charge.

In a nutshell, the Helpdesk’s services cover: (i) enquiry helpline (tailor-made confidential advice to EU SMEs on IP related to South-East Asia within 3 working days), (ii) IP guides and country factsheets and (iii) onsite and online trainings.

[1] https://www.imf.org/en/Publications/WEO/weo-database/2021/April/select-country-group

[2] https://www.worldbank.org/en/country/vietnam/overview

[3] https://ec.europa.eu/trade/policy/countries-and-regions/countries/vietnam/

[4] https://webgate.ec.europa.eu/isdb_results/factsheets/country/overview_vietnam_en.pdf

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Publication date
27 May 2021