Notable Recent Projects

Apolat Legal’s teams have advised on numerous market-shaping transactions across an array of industries in the energy sector, e-commerce, technology, retails, logistic, real estate,…

Learn more

Corporate and Investment

  • Foreign Investment
  • Compliance
  • M&A
  • And more

International Commercial & Trade

  • International Trade
  • Sales & After Sales
  • Distribution
  • And more

Dispute Resolution

  • Mediation & Conciliation
  • Litigation & Enforcement
  • Arbitration
  • And more

Employment

  • International Labor
  • Employee Benefits
  • Day to Day HR Management
  • And more

Intellectual Property

  • Franchising
  • Trademark and Industrial Design
  • Copy Right and Patent
  • And more

Real Estate

  • Real Estate
  • Infrastructure
  • Leasing
  • And more

We always believe in

At Apolat Legal, diversity, inclusion and equality are a part of how we live our values.

We apply our values to all our activities world-wide. They describe our culture and personality both internally and externally, the way we work and what we stand for.

Our Vision

Leading

We strive to be the leading local business law firm and deliver quality, value-added services to our clients, globally and locally.

Our Values

Innovative

We pursue excellence and seek to innovate in everything we do. We take on work only if we can add real value to our clients.

Our People

Diversity

We value diversity and respect for the individual. We believe in teamwork for the good of the firm and our clients.

Our Clients

Long-term relationship

We believe in long-term relationships with our clients based on openness and honesty. We believe client interests are at the very heart of our business.

Our Communities

Connection

Our strength and vision will be founded upon the strength and stature of our local practices, relationships and our cultures.

The latest

NEWS & LEGAL UPDATES

[Legal Updates] The changes in personal income tax exemptions

1| Our prominent legal articles in June 2020

In June 2020, our personnel had some remarkable, specifically:

  • Lawyer Le Tien Dat and Tran Thi Ngoc Hoa with the Article “Tax implications applied to the foreign contractor carrying out EPC Contract in Vietnam”, provides a legal summary on tax implications of the Contractor during performing the EPC Contract in accordance with the laws of Vietnam, please visit here.
  • M Tran Chau Hoai Han and Le Thi Anh Thu with the Article “A guide to intellectual property in Vietnam”, provides an overview information to the legislation of intellectual property of Vietnam. To read the entire article, please visit here.

2| The remarkable news in June 2020

a) The changes in personal income tax exemptions

On June 02nd, 2020, the Standing Committee of The National Assembly promulgated Resolution No. 954/2020/UBTVQH14 to change the personal income tax exemptions, which takes effect on July 01st, 2020. According to this Resolution, the personal income tax exemptions shall be changed as follows:

  • Personal exemption: 11 million VND/month (132 million VND/year);
  • Exemption for each dependent: 4,4 million VND/dependent/month.

Taxpayers who have paid tax and applied the exemptions specified in the previous regulations, may recalculate the personal income tax payable by applying the exemptions specified in this Resolution when preparing the 2020’s annual personal income tax declaration.

The new exemptions are applied from the tax period of 2020.

b) Vietnam National Assembly adopted EVFTA and EVIPA

On June 08th, 2020, Vietnam National Assembly adopted both EVFTA and EVIPA. For more details, please visit here.

c) Ratifying 30% corporate income tax (CIT) cut in 2020 for SMEs

On June 19th, 2020, Vietnam National Assembly adopted a resolution to cut off 30% corporate income tax (CIT) in 2020 for the SMEs which have no more than VND200 billion (US$8.6 million) in revenue in 2020.

The adopted resolution shall have effect after 45 days from the date of signing and will be applied to the tax period 2020.

3| The remarkable executed legislations in June 2020

No. DOCUMENT TITLE EXECUTION DATE  EFFECTIVE DATE
1.     

Decree No. 66/2020/NĐ-CP dated June 11th, 2020 amendments to the Government’s Decree No. 68/2017/ND-CP dated May 25th, 2017 on management and development of industrial clusters

11/06/2020 01/08/2020
2.     

Nghị định 66/2020/NĐ-CP ngày 11 tháng 06 năm 2020 sửa đổi, bổ sung một số điều của Nghị định số 68/2016/NĐ-CP ngày 01 tháng 7 năm 2016 của Chính phủ quy định về điều kiện kinh doanh hàng miễn thuế, kho bãi, địa điểm làm thủ tục hải quan, tập kết, kiểm tra, giám sát hải quan 

15/06/2020 10/08/2020
3.     

Thông tư số 11/2020/TT-BCT ngày 15 tháng 6 năm 2020 của Bộ Công thương quy định quy tắc xuất xứ hàng hóa trong Hiệp định thương mại tự do giữa Việt Nam và Liên Minh Châu Âu

15/06/2020 01/08/2020

 

Download Legal Updates as a PDF here.

Read more...

[Legal Updates] The Resolutions adopted by the National Assembly

Law on Enterprises (amended)

On June 17th, 2020, Vietnam National Assembly adopted the Law on Enterprises (amended) which will take effect on January 1st, 2021.

Some highlights of the Enterprise Law (amended)

  • No procedures for notifying the seal specimens to the Business Registration Authority;
  • Enterprises with more than 50% charter capital owned by the State will be considered as state-owned enterprises (the current regulated ratio is 100%);
  • A shareholder or a group of shareholders owning 5% or more of the common ordinary shares has the right to review, search and extract the minutes book and resolutions, decisions of the board of management, financial statements, and has the right to request a convening of a general cases meeting of shareholders in some specific cases.

Law on Investment (amended)

On June 17th, 2020, Vietnam National Assembly adopted the Investment Law (amended). Accordingly, some new points include:

  • There is no regulations on the limit of the special investment incentive policy, only the preferential rate and the time limit for the application of special preferences shall comply with the provisions of the Law on Corporate Income Tax and the land laws;
  • Debt collection service to be in the list of prohibited business investments.

The Law on Investment (amended) shall take effect on January 1st, 2021.

The Law on Investment under public-private partnerships (PPP)

On June 18th, 2020, Vietnam National Assembly adopted the Law on Investment under public-private partnerships (PPP). Accordingly, some highlights include:

  • The State participation limit in PPP projects must not exceed 50% of the total investment of the project;
  • The sharing mechanism accordance with the increment (revenue increased by over 125%), and decrement (revenue decreased by less than 75%) of the revenue to minimize risks for PPP projects, especially risks due to changes from the State;
  • The PPP project enterprises are allowed to issue corporate bonds to raise capital for implementation of PPP projects.

The Law on Investment under public-private partnerships (PPP) shall take effect on January 1st, 2021.

Ratifying 30% corporate income tax cut in 2020 for SMEs

On June 19th, 2020, Vietnam National Assembly adopted a resolution to cut off 30% corporate income tax (CIT) in 2020 for the SMEs which have no more than VND200 billion (US$8.6 million) in revenue in 2020. 

The adopted resolution shall have effect after 45 days from the date of signing and will be applied to the tax period 2020.

Download Legal Updates as a PDF here.

Read more...

[Legal Updates] Vietnam National Assembly adopted both EVFTA and EVIPA

On June 08th, 2020, Vietnam National Assembly adopted both EVFTA and EVIPA.

COMPREHENSIVE OVERVIEW OF EVFTA

Reduction or elimination of tax duties

According to EVFTA, Vietnam will eliminate tariffs on EU goods belonging to 48.5% of tariff lines in the tariff schedule right after EVFTA takes effect (August 01st, 2020). Within 07 years after EVFTA came into effect, Vietnam commits to eliminate 91.8% of tariff lines in the tariff schedule. Within 10 years after EVFTA came into effect, Vietnam commits to eliminate 98.3% of tariff lines in the tariff schedule.

Besides, the EU will eliminate 85.6% of tariff lines on Vietnamese goods right after EVFTA takes effect. Within 07 years since EVFTA came into effect, the EU committed to eliminate 99.2% of tariff lines in the tariff schedule.

Notable points in the commitments of Vietnam about goods and services

(i) Remanufactured goods shall be received the same treatment as similar new goods. A party may require specific labelling of remanufactured goods in order to avoid causing confusion for consumers.

(ii) The mechanism of origin self-declaration, in addition to the traditional issuance mechanism of certificate of origin (C/O), both parties agreed to allow exporters to submit an origin self-declaration. This is the mechanism by which the exporter declares the origin of the product in the set of documents submitted to the customs authorities of the importing country, instead of having to obtain a C/O from the authorities.

Vietnam and EU agreed to use the C/O EUR 1 form as a common form in the EVFTA. The EUR 1 form requires simpler information than the C/O forms in the ASEAN Trade in Goods Agreements (ATIGA) and the FTAs between ASEAN and external partners that Vietnam has signed.

Some information that exporters are allowed to choose whether to declare or not to declare such as the importer, the shipment’s itinerary, the commercial invoice number. Regarding the contents of the declaration, both parties agreed not to request to show the origin criteria, HS codes of goods on C/O.

(iii) For the distribution services, the establishment of outlets for retail services (beyond the first one) shall be allowed on the basis of an Economic Needs Test (ENT). In case of establishing an outlet less than 500m2 within the area planned for trading activities and already completed construction of infrastructure, ENT is not required. 05 years from the effective date of the EVFTA, the requirement of ENT will be abolished. Vietnam retains the right to apply non-discriminatory zoning or planning measures.

(iv) Regarding banking services, Vietnam committed to favorably allow EU credit institutions to raise foreign ownership to 49% of charter capital in two joint-stock commercial banks of Vietnam. However, this commitment is only valid for 5 years as from the effective date of the EVFTA (after the expiry of 05 years Vietnam will not be bound by this commitment), and not applicable to 04 joint-stock commercial banks where the State is holding dominant shares including BIDV, Vietinbank, Vietcombank and Agribank. In addition, the implementation of this commitment will comply with all regulations on merger and acquisition procedures as well as conditions about safety, competition, including shareholding limitation applicable for each investor being an individual or organization on the basis of national treatment, according to the provisions of Vietnamese law.

(v) For the transport services, Vietnam shall permit the international maritime transport service suppliers of the EU or its national member to reposition their owned or leased empty containers, which are not being chargeable carried as cargo and are transported for their use in handling their cargo in foreign trade, between Quy Nhon port and Cai Mep-Thi Vai port. After 05 years as from the effective date of EVFTA, Vietnam will allow the transport of empty containers on all routes. With the dredging service, Vietnam allows EU suppliers to set up joint ventures up to 51% of ownership to provide services in Vietnam. For the airport ground handling services, the Vietnam Ministry of Transport also agrees that after 05 years from the time Vietnam opens the market to the private sector, EU service suppliers will be allowed to enter into joint ventures with Vietnamese partners with the foreign shares not exceed 49%, to bid to provide this service. 03 years later, the limitation of foreign capital will be 51%.

(iv) For non facilities-based value-added communication services, Vietnam allows the establishment of 100% foreign-invested companies after 5 years from the effective date of the EVFTA.

Market access

In respect to the sectors and sub-sectors listed in the Schedule of Specific Commitments (for example: hospital services, storage and warehouse services, etc.), except where there is a reservation specified in the Schedule of Specific Commitments, the parties undertake not to apply the restrictions related to ( i) the number of enterprises that are allowed to access the market, (ii) the value of transaction, (iii) the number of operations, (iv) the participation of foreign capital, (v) types of legal entity, (vi) the number of natural persons that may be employed.

National treatment

In respect to the sectors and sub-sectors listed in the Schedule of Specific Commitments (for example: hospital services, storage and warehouse services, etc.), the parties committed to provide each other’s service providers and investors with treatment no less favourable than that accorded to their service suppliers and investors, unless otherwise regulated in the Schedule of Specific Commitments. Each party shall accord to investors of the other party and to their enterprises, with respect to establishment in its territory, treatment no less favourable than that accorded, in like situations, to its own investors and to their enterprises, unless otherwise regulated in the Schedule of Specific Commitments and other specific exceptions.

Notable points in intellectual property regulations

(i) The EVFTA requires each party to provide that a registered trademark shall be liable to revocation if, within a continuous period of 05 years prior to a request for revocation, it has not been put to genuine use by its owner or the owner’s licensee in the relevant territory in connection with the goods or services in respect of which it is registered, without justifiable reasons, except where the use is commenced or resumed at least 03 months before the request for revocation.

(ii) The EVFTA also requires the Government of each party to provide customs officers and authorities better tools to tackle infringements through provisions to improve legal framework and act against violations. Accordingly, competent judicial authorities, upon request by a party has presented reasonably available evidence to support his claims that his intellectual property right has been infringed or is about to be infringed, have the authority to order prompt and effective provisional measures to prevent an infringement of any intellectual property right from occurring, and, in particular, to prevent the entry into, and the movement within, the channels of commerce in their jurisdiction of goods, including imported goods immediately after custome clearance.

COMPREHENSIVE OVERVIEW OF EVIPA

Protected investments

According to the EVIPA, the investors of a party whose covered investments suffer losses owing to war or other armed conflict, a revolution, a state of national emergency, a revolt, an insurrection or a riot in the territory of the other party shall be accorded by that other party, with respect to restitution, indemnification, compensation or other form of settlement, treatment no less favourable than that accorded by that other party to its own investors or to the investors of any third country.

A party shall not nationalise or expropriate the covered investments of investors of the other party either directly, or indirectly through measures having an effect equivalent to nationalisation or expropriation, except:

(a) for a public purpose;

(b) under due process of law;

(c) on a non-discriminatory basis; and

(d) against payment of prompt, adequate and effective compensation.

All transfers relating to covered investments are permitted to be made in a freely convertible currency, without restriction or delay and at the market rate of exchange applicable on the date of transfer. Such transfers include:

  • contributions to capital, such as principal and additional funds to maintain, develop or increase the investment;
  • profits, dividends, capital gains and other returns, proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;
  • payments of interest, royalties, management fees, and technical assistance and other fees;
  • payments made under a contract entered into by the investor, or the covered investment, including payments made pursuant to a loan agreement;
  • earnings and other remuneration of personnel engaged from abroad and working in connection with the investment;
  • payments made pursuant to compensation for losses of the Investors of a party whose covered investments suffer losses owing to war or other armed conflict, a revolution, a state of national emergency, a revolt, an insurrection or a riot in the territory of the other party;
  • payments made pursuant to compensation for nationalise or expropriate; and
  • payments of damages pursuant to an award issued according to the dispute settlement.

Dispute resolution

The EVIPA provides the mechanism for the investors of a party to institute dispute resolution proceedings against the other party for certain violations of the investment protections. The dispute shall follow the order of:

  • Firstly, the dispute shall be settled through negotiations or mediation.
  • Where a dispute cannot be resolved through negotiations or mediation, the investor may submit a request for consultations to the party in the dispute.
  • If the dispute cannot be settled within 90 days of the submission of the request for consultations, the investor may deliver a notice of intent to submit the claim to dispute settlement. The notice of intent shall be sent to the EU or to Viet Nam, as the case may be.
  • If the dispute cannot be settled within 06 months of the submission of the request for consultations and at least 03 months have elapsed from the submission of the notice of intent to submit a claim pursuant, the investor may submit a claim to the Tribunal.

 

Download Legal Updates as a PDF here.

Read more...

ARTICLES

The changes in personal income tax exemptions

On June 02nd, 2020, the Standing Committee of The National Assembly promulgated Resolution No. 954/2020/UBTVQH14 to change the personal income tax exemptions, which takes effect on July 01st, 2020. According to this Resolution, the personal income tax exemptions shall be changed as follows:

  • Personal exemption: 11 million VND/month (132 million VND/year);
  • Exemption for each dependent: 4,4 million VND/dependent/month.

Taxpayers who have paid tax and applied the exemptions specified in the previous regulations, may recalculate the personal income tax payable by applying the exemptions specified in this Resolution when preparing the 2020’s annual personal income tax declaration.

The new exemptions are applied from the tax period of 2020.

Read more...

Legal issues to address when negotiating exclusive agency contracts

In the context of commercial activities are not merely direct sales or providing services as currently, the demand of establishing and expanding distribution systems, supply chains is increasingly getting the attention of business entities in many forms: establishing branches/locations of business, franchising, opening commercial agencies… In particular, the agency model is often prioritized due to cost-effective, advantages on time management, limited risks, and the possibility of quick expansion of the consumption of the goods, supplement service market.

In the process of providing consultancy services, reviewing agency contracts, especially exclusive agency contracts, Apolat Legal finds (realizes) that business entities often ignore small problems, however it  have a significant impact on the performance of contracts. With the context of this article, Apolat Legal points out some main legal issues that the parties need to be aware of when negotiating as well as drafting an exclusive agency contract under Vietnamese law to eliminate high-risks throughout the life of the contract.

1| The territorial range to be exclusive

As regulated in the Vietnam Commercial Law 2005, commercial agency activity means the activity whereby the principal and the agent agree that the agent, by its own name, sells/purchases goods or provides services of the principal to customers for remuneration[1]. Accordingly, the exclusive agency is a form of commercial agency whereby a sole agent is authorized by the principal to sell or purchase one or many items of goods or to provide one or many types of services within a given geographical area[2].

Therefore, the exclusive characteristic of the exclusive commercial agency can be represented and bound to the following factors:

  • The number of agents: Only one agent can obtain exclusive right in a territorial range that has been unified by the parties.
  • Exclusive territorial coverage: Exclusive territorial range can be a district, a province, an inter-province, an area, a country or even many countries, depending on the capacity of the parties.
  • Monopoly on the type of goods and services: The principals can distribute exclusively one/some or all of the products that they manufacture/are entitled to distribute.

Therefore, dependent on trading strategies of the parties, the principal and the agent should   define clearly the scope of exclusive agreement concerning the territory and the kind of products can be distributed under the exclusive agency contract to exploit the potential of the market, as well as minimize risks. This issue is especially worth paying attention by principals, as to the extent agreed in the exclusive contract; they are only allowed to provide their goods/services for a sole agent. Therefore, the favourable or unfavourable of their business in the agreed scope is entirely dependent on the agent.

Here is a typical example on the exclusive scope mentioned above: Company X (the principal) and company Y (the agent) signed the exclusive agency contract in which Company Y will distribute the whole type of products that company X trading in the region of southeast of Vietnam (including Ho Chi Minh City, Ba Ria – Vung Tau Province, Binh Duong province, Dong Nai province, Binh Phuoc Province). Thus, under this agreement, the company X is only allowed to offer its products to Company Y, the delivering products to any other third party or even selling the products by Company X itself in the southeast region shall be considered as breaching the exclusive agency contract and infringe Company Y’s interests. However, in contrast, when Company X only allows Company Y to distribute exclusively the X1 product in the above-mentioned territory of the southeast region, then Company X still have full power to exploit other product lines without affecting the interests of Company Y.

Notwithstanding, principal also needs to clarify where it is specified by law that an agent shall be allowed to enter into an agency contract with a principal for a certain type of goods or service, such provision of law must be complied with[3].

2| The price of goods/services

As regulated by the law, agency remuneration shall be paid to agents in the form of commission or price margin unless the parties otherwise agree[4].

On the principals’ aspect, they always hope their agent to sell as many products as possible because they are also beneficial after all, therefore, the principals do not interfere with the price of the goods/services that the agent sells/provides to consumers. Nonetheless, there are some instances, but rarely, where principals will set the limit on the selling price of the product through making standard price, or the retail price specified to create a consistent image and product value.

On the agents’ aspect, originated from the “exclusive rights” in distributing products within a given territorial scope, they wish to sell products at the highest possible price to profit. Consequently, the agents should also clarify whether the agency contract is binding on the cost of the product or not to have appropriately negotiating options.

3| The condition on the minimum amount for ordering goods and supplying services

Normally, along with the benefit of being exclusive to sale of goods/supply services within specific territory, the agent will also bear an absolute pressure on the revenue of selling products or providing services. Namely, the principal binds the agent to the obligation of ordering a certain number of goods or supply services or achieve minimum sales criteria. These rules are often seen as the fundamental condition that the principals set to the agents when signing an exclusive agency contract. If this condition is not achieved, depending on the severe of breaches, the agent may not be entitled for remuneration, reward or discount or even terminated the contract.

On the other hand, the agent that they aim to sell as many products as possible to be able to gain more profits, can both enjoy the discount and remuneration from the principal without violating the contract. Therefore, in the process of negotiation and signing of the exclusive agency contract, the parties should pay close attention to this issue to balance the best interests between the parties because this is one of the main reasons for the dispute of exclusive agency contracts.

In addition to the above issues, the principal and the agent should also pay attention to the clauses of the delivery, payment term, return policy, duration of the agency during the process of negotiating exclusive agency agreement. Besides, if the principal is foreign traders, the Parties also need to refer to the list of imported goods, obligations, export and import procedures from Article 50 to Article 53 Decree 69/2018/ND-CP and the general provisions of commercial agency in current commercial law.

 

[1] Article 166 Commercial Law 2005

[2] Article 169 Commercial Law 2005

[3] Clause 7 Article 175 Commercial Law 2005

[4] Clause 1 Article 171 Commercial Law 2005

Read more...

A guide to intellectual property in Vietnam

1. Treaties and reciprocal agreements

So far (Until now), Vietnam is a member of the following international agreements in the area of intellectual property laws:

  • the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and its relevant implementing regulations;
  • the Paris Convention for the Protection of Industrial Property;
  • the Berne Convention;
  • the Madrid Agreement concerning the International Registration of Marks;
  • the Madrid the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks;
  • the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations;
  • the Patent Cooperation Treaty;
  • the International Convention for the Protection of New Varieties of Plants;
  • Hague Agreement Concerning the International Registration of Industrial Designs.

2. Main national legislations governing IP matters 

Listed hereunder are the major legal instruments for protection and enforcement of intellectual property rights in the country (Vietnam):

  • Civil Code 2015 passed by the National Assembly in November 2015 and effective from 1 January 2017 and its implementing regulations;
  • Civil Procedure Code 2015 passed by the National Assembly in November 2015 and effective from 1 July 2016, providing processes and procedures for the settlement of civil affairs and enforcement of civil judgments and its implementing regulations;
  • Criminal Code 2015 of the National Assembly, enacted in November 2015, amended and supplemented in 2017, and effective from 1 January 2018 and its implementing regulations;
  • Criminal Procedure Code 2015 of the National Assembly, enacted in November 2015 and effective from 1 January 2018 providing processes and procedures for institution of legal proceedings, investigation, prosecution, and enforcement of criminal judgments and its implementing regulations;
  • Intellectual Property Law 2005 passed by the National Assembly on 29 November 2005 and came into force on 1 July 2006, and then amended and supplemented pursuant to Law No. 36/2009/QH12 of 19 June 2009 and Law No. 42/2019/QH14 (Vietnam IP Law) and its implementing regulations;
  • Competition Law 2018 of the National Assembly, enacted in June 2018 and effective from 1 July 2019 and its implementing regulations;
  • The Customs Law 2014 of the National Assembly, enacted in June 2014 and effective as of 1 January 2015 and its implementing regulations;
  • Law on Information Technology No. 67/2006/QH11 passed by the National Assembly on 29 July 2006 and came into force on 1 January 2007 and its implementing regulations;
  • Cinematography Law passed by the National Assembly on 29 June 2006 and came into force on 1 January 2007, and then amended in 2009 and its implementing regulations;
  • Law on Handling Administrative Violations No. 15/2012/QH13 of the National Assembly, ratified on 20 June 2012 and entered into force on 1 July 2013 and its implementing regulations;

3. What are intellectual property rights under Vietnamese IP laws? 

Intellectual property (IP) is a term referring to a brand, invention, design or other kind of creation, which a person or business has legal rights over. Almost all businesses own some form of IP, which could be a business asset. Common types of IP includes:

  • Copyright;
  • Patents;
  • Industrial designs;
  • Trademarks

4. Copyright 

Copyright means the right of an organisation or individual to works which such organisation or individual created or owns. The subject matter of copyright consists of literary, artistic and scientific works. The subject matter of copyright-related rights consists of performances, audio and visual fixation, broadcasts and satellite signals carrying coded programmes.

Registration of copyright is advisable and can be made with the National Copyright Office, which is a subsidiary organisation of the Ministry of Culture, Sport and Tourism.

Vietnam is a signatory to the Berne Convention on copyright. This sets the minimum protection at 50 years from publication for cinematographic works, photographic works, dramatic works, works of applied art and anonymous works, and at 50 years after the death of the author for other works.

Computer programs are included within copyright legislation in Vietnam where ‘computer programs as such’ can not be patented.

5. Patents, utility solutions 

A patent is defined as a technical solution in the form of a product or process, which is intended to solve a problem by the application of natural laws. Certain subject matters are not patentable, including scientific discoveries, theories, mathematic methods, aesthetic solutions, animal varieties and methods of human/animal disease prevention, diagnosis and treatment, and so on.

Vietnam’s patent law operates under the ‘first to file’ principle –  if two people applied for a patent on an identical invention, the first one to file the application would be awarded the patent.

A patent is eligible for protection in the form of the grant of an invention patent when it satisfies the following conditions:

  • It is novel.
  • It is of an inventive nature.
  • It is susceptible of industrial application.

Unlike many other jurisdictions, Vietnam distinguishes between patents (sometimes called ‘invention patents’) and utility solution patents (known elsewhere as ‘utility models’ or ‘minor patents’). Rules for utility solution patents are similar to those for invention patents, but the item is not required to demonstrate an ‘inventive step’. Accordingly, a technical solution or product will be protected in the form of the grant of a utility solution when it satisfies the following conditions:

  • It is novel.
  • It is susceptible of industrial application.

Invention patents give protection for a maximum of 20 years, while utility solution patents are valid for ten years.

6. Industrial designs 

An industrial design means the outward appearance of a product embodied in three-dimensional configuration, lines, colours or a combination of such elements.

An industrial design will be eligible for protection when it satisfies the following conditions:

  • It is novel.
  • It is of a creative nature.
  • It is susceptible of industrial application.

The law gives protection for industrial designs for a maximum of five years, renewable for two consecutive periods of five years. 

7. Trademarks 

The trademark system operates in a similar way to countries, protecting symbols, colours and other visual devices used to identify a business’ products or services, now including three-dimensional objects. It can be in the form of letters, words, pictures, figures, three-dimensional figures or a combination thereof, and in one or more colours. Trademarks include service, certification and collective marks.

A trademark will be refused registration if it is:

  • Indistinctive (such as simple geometric symbols).
  • Identical or confusingly similar to a state flag or emblem.
  • A symbol that merely indicates matters of time, quantity, quality, or characteristics of the goods or services (that is, a descriptive mark).
  • Deceptive to consumers.
  • A generic symbol or emblem.
  • Confusingly similar to a registered mark or the subject of a prior application, a mark considered famous, widely used and recognised, or registered to a protected geographic location, or a registered industrial design.
  • Contrary to the interests of society, public order or humanitarian principles.

A trademark is valid for ten years after which it may be renewed indefinitely for further ten-year periods.

8. Unfair competition 

Under IP laws, the following acts shall be deemed to be acts of unfair competition:

(a) Using commercial indications to cause confusion as to business entities, business activities or commercial origin of goods or services;

(b) Using commercial indications to cause confusion as to the origin, production method, utilities, quality, quantity or other characteristics of goods or services; or as to the conditions for provision of goods or services; 

(c) Using marks protected in a country which is a contracting party to a treaty of which the Socialist Republic of Vietnam is a member and under which representatives or agents of owners of such marks are prohibited from using such marks, if users are representatives or agents of the mark owners and such       use is neither consented to by the mark owners nor justified;

(d) Registering or possessing the right to use or using domain names identical with, or confusingly similar to, protected trade names or marks of others, or geographical indications without having the right to use, for the purpose of possessing such domain name, benefiting from or prejudicing the reputation and popularity of the respective mark, trade name or geographical indication Procedures for handling unfair competition relating to IP is governed mainly by Vietnam’s Competition Law of 2018.

9. Enforcing IP rights in Vietnam 

There are three levels at which rights may be enforced in Vietnam:

  • Administrative action: There are various authorities with special responsibilities and functions. Sanctions may include warnings, fines, the seizure or destruction of the counterfeit goods, business license suspension and re-exportation of infringed imported or transit goods out of Vietnam. Administrative actions are both cost-effective and time-efficient. This is the most common solution for right-owners to handle IP infringement. However, it is only a good way to deal with small-scale infringers. To larger-scale infringers, it will be good option when the IP right holders want to immediately stop ongoing IPR infringement rather than compensation.
  • Civil litigation: Although the number of IP dispute is relatively rare, it is increasing in recent years. Preliminary injunctions and compensation for damages are available through the civil courts. Damages are often calculated based on the amount of lost sales or the infringer’s profits. However, when the actual amount of damages owed can not be determined, the maximum amount the court can award in damages is VND 500 million (approximately EUR 18,000).
  • Criminal prosecution: The government authorities and rights owners can bring prosecutions. Penalties can involve fines, imprisonment and even the death penalty in serious, organised or business-related cases. However, due to lack of guidance and the inconsistency in the legal system, criminal action is not usually feasible in practice. The cost of criminal prosecution is borne by the authorities, and a favourable ruling could be a valuable deterrent to potential future infringers. It usually takes twelve (12) months for a criminal trial proceeding and another twelve (12) months for an appeal proceeding to be completed.
Read more...