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Author rights protection for online games in Viet Nam

Over the last few years, it can be seen that even the pandemic, the online game industry is one of the sectors that has been growing in leaps and bounds. A successful online game does not only mean that it attracts a large number of users purchasing or paying for the game, but it also means that the game’s owner will have numerous ways to monetize the game in all aspects, such as selling toys, accessories, garment or clothing, and many other items using the character from the game.

Additionally, a game company owning a successful game can also be profitable from licensing the rights to produce game-inspired TV series, advertising campaigns or other online content in social media networks. Thus, protecting author rights, or intellectual property in general, of an online game, is key and crucial for the game’s owner to benefit from its investment put into the development of a game. Obtaining author right protection becomes even more important because of the borderless nature of online game distribution and development.

Which elements of the game can be protected?

Simply speaking, author’s right regime protects the original expression of the creative works. In Viet Nam, like most countries, creative work can be automatically protected by author’s right regime once the work has been created in a certain form and met the standard of originality. With respect to the gaming industry, elements that can be protected copyrighted by the author rights regime may include:

  • Game characters;
  • Gameplay or stories of the game;
  • Sounds and Music;
  • Artwork and Visual Design;
  • Code or computer program.

Each above element shall require different specific standards to be protected under author right regime. When the said elements meet the condition to be author right protected, the right holder has the exclusive right to, amongst other things, prevent others from reproducing the game, derivative works of the game, distributing copies of the game, displaying the copyrighted protected elements of the game publicly, … 

Who is the real owner of the author right to the game?

Concerning the monetization of the online games, the most important thing is that who is the legal owner of the author rights of the game, whether this is the original creator of the game or the game company investing money in the game production (in the simple scenario). In the world of intellectual property laws, there is a quite simple principle so-called “work for hire” that assumes the game company (generally, the organizations or employers) will hold the author rights to the game if original creator (i.e. coder, designer, …) is the employee of the game company or the game production is funded by the game company. This principle is a famous principle from the US copyright law.

However, applying the above principle to practical cases is not easy that much under the Vietnamese intellectual property laws. According to the laws of Vietnam, there is no exact principle of “work for hire” as seen under some common law jurisdictions like US. Although intellectual property laws of Vietnam still have the rule that has the similar approach, this does not apply to the moral rights of the authors or creators under Article 19 of the Vietnam Law on intellectual property.

In practice, it is common that many coders, designers are working for different game studios as independent contractors or freelancers without a detailed contract. In these cases, the party claiming ownership of the game must incur the burden of proof. This process has never been an easy path, in particular to digital products as online games. 

Author right protection by voluntary registration

Like many countries, under Vietnam intellectual property laws, the author rights protection applies as soon as the work is fixed under a certain form without the need for registration. However, in consideration of the potential disputes on ownership to the game and burden of proof of claimant that is usually complicated and subjective, the common advice is that the owner of the game should voluntarily register the author’s right protection for its right to the game. The registration will provide the presumption that the party whose name is on the certificate is the holder of author rights of the game. This thus makes it easier to prove the ownership of the author’s rights and handle the intellectual property rights infringement.

Furthermore, since Vietnam is a signatory member of the Berne Convention on global protection of author rights of works, when the game (or any of its components) is successfully registered in Vietnam, such registered game will be also protected in 179 members countries of Berne Convention.

Quick steps to strengthen the protection of author right of online games:

  • Ensure that you evidence the process of building the game to prove the author right ownership if necessary;
  • Identify what intellectual property rights you have and consider to register for protecting (compulsory and voluntary);
  • Enter into contracts clearly stating that who has the ownership of author rights with all parties related to the game development process;
  • Make sure any trade secrets are protected with NDAs between all parties;
  • Monitor the market to early discover the potential intellectual property infringements.

Notes On Gifts When Implementing Promotion Program

Promotion is a trade promotion activity of a trader to promote the purchase and sale of goods and provide services by giving customers certain benefits. When a promotion is held, participating consumers are often interested in the “gift” of the program. According to business theory, gifts (also known as goods and services used for promotion according to the laws) are an indispensable part of a promotion program because they directly bring benefits to customers participating in the program and make an essential contribution to the success of the program the marketing campaign. Attractive and valuable promotional gifts are an extremely effective way to promote businesses and build brands. Therefore, giving ideas and choosing gifts that are unique, attractive and legally is an issue that enterprises need to pay attention to when implementing a promotion program.

Goods and services used for promotion (gifts)

Under Article 94 of the Commercial Law 2005, goods used for promotion are goods and services that promotion traders are trading or other goods and services. Current legal regulations do not prohibit traders from using other traders’ goods as goods or services for promotion. In addition, according to Clause 2, Article 5 of Decree No. 81/2018/ND-CP, goods and services used for advertising do not include alcohol, lottery, tobacco, medicines for humans including all kinds of drugs that have been allowed to be circulated under regulations of the Ministry of Health (except for the case of promotions for drug traders), goods and services banned from circulation in Vietnam and other goods and services prohibited from promotion under legal regulations. Thus, goods and services used for advertising can be goods and services that such trader is doing business or goods and services of another trader. Moreover, these goods or services must be legally traded.

Some notes when choosing goods and services used for promotion (gifts)

First, ownership of goods used for promotion. According to the provisions of the laws on promotion, traders may use the goods and services of other traders for promotion. However, the goods used for promotion must be legally owned by the trader conducting the promotion. When making promotional registration dossiers with competent authorities, traders must provide purchase and sale contracts, sponsorship agreements, purchase invoices, etc., to prove their ownership of the goods used for promotion.

Second, advertising activities for gifts in promotions. Trade promotion legislation does not restrict goods used for promotion to be approved by the trademark owner of the goods. In addition, the prohibited acts in promotional activities also have nothing to do with the consent of the owner of the goods. Therefore, traders have the right to use any legally circulated goods as gifts. However, promotional activities are always associated with advertising activities, the use of images of other organizations and individuals for advertising without that organization’s or individual’s consent is prohibited under advertising regulations. Accordingly, traders are not allowed to carry out advertising acts containing other traders’ products without the permission of that trader.

Regarding intellectual property rights of gifts, the owner of an industrial property object (trademark, industrial design, etc.) has the right to prevent others from using the industrial property object if such use is not in some instances permitted by-laws (Article 125 of the Law on Intellectual Property 2005). Meanwhile, circulating branded products to the market is an act of using the trader mark according to Article 124 of the Intellectual Property Law 2005. This act is an infringement of intellectual property rights.

Thus, if considering only promotional activities, traders have the right to use any goods legally allowed to circulate on the market to use as gifts. However, because of the relevance to the use of images for advertising in promotional activities and the intellectual property rights to the trademarks/designs of the gift of the producer, traders need to pay attention to clarify the purpose of buying goods as gifts. Moreover, the traders need to stipulate in the contract, sales agreement that the seller agrees to allow the trader to use images/intellectual property rights of products to carry out advertising and promotion.

Third, note the material value used for promotion. The material value used for promotion for a promotional unit of goods or services must not exceed 50% of the price of such promotional goods or service unit before the promotion period, except for the case of sales promotion: giving samples, providing sample services; giving goods and providing services without collecting money, not accompanied by the purchase and sale of goods; selling goods and providing services with contest tickets; selling goods and  providing services together with participating in programs of chance and organizing a regular customer program… 

Fourth, invoices and tax issues for goods and services used for promotion. According to the provisions of laws, traders conducting sales promotion still have to issue invoices for selling goods and services for the case of goods and services used for promotion (except for goods that are internally circulated or consumed internally in the production process). In addition, the taxable price is determined to be zero for goods and services used for promotion under the provisions of commercial laws (register/notify with competent authorities under the laws). This means traders do not have to pay value-added tax for goods and services used for promotion. Conversely, in cases traders fail to comply with the laws on commerce, traders must declare and pay value-added tax on goods and services used for internal consumption, donation.

Moreover, value-added input tax on goods and services used for promotion is still deductible. Thus, traders need to note that goods and services used for promotion must also issue an invoice. On the invoice, the name and quantity of the goods must be clearly stated as promotional goods. The traders need to comply with promotional registration/information regulations under the laws to apply appropriate tax policies. 

With the significant scale and influence of the “Flash sale” programs and the fierce competition in the business market, promotion is an indispensable activity to promote the business advantage of traders. Besides focusing on choosing quality gifts to attract consumers, traders need to pay attention to complying with the legal provisions on gifts so that the promotion program is implemented legally and under law regulations.


The issue of statute of limitations for lawsuits in intellectual property disputes

The statute of limitations for initiating a lawsuit is a fundamental issue. However, it is easily “forgotten” when resolving most types of disputes, whether it is lawsuits in Court or Arbitration. The issue of statute of limitations in intellectual property disputes is no exception.

Intellectual property is an intangible asset with high commercial value and influence on enterprises’ business activities. However, with the essence of intangible assets, intellectual property assets are highly vulnerable to infringement due to unauthorized use. When pursuing settlement measures related to intellectual property disputes, some organizations and individuals still do not have adequate awareness of the issue of statute of limitations for lawsuits, thereby losing the right to sue due to the expiration of the statute of limitations. This article will analyze the statute of limitations for filing lawsuits in intellectual property disputes and the writer’s point of view on applying the statute of limitations in intellectual property disputes.

1. Some general provisions on statute of limitations for initiating lawsuits

1.1 What is the statute of limitations for filing a lawsuit?

The current Intellectual Property Law does not have a separate provision on the statute of limitations for filing a lawsuit for intellectual property disputes is used according to the Civil Code, the Civil Procedure Code.

The statute of limitations for initiating a lawsuit is the time limit. The subject is entitled to initiate a lawsuit to request the Court settle the civil case to protect the infringed lawful rights and benefits. Provided that the time expired, the right to sue is lost. The statute of limitations is calculated from the beginning of the first day of the statute and ends at the end of the last day of the statute of limitations. The statute of limitations for initiating a civil lawsuit is counted from the date the person with the right to claim knows or should know that his/her lawful rights and interests have been infringed unless otherwise provided for by law.

The statute of limitations for initiating a lawsuit in particular and the statute of limitations in general is (i) a period determined and prescribed by law; (ii) the subjects are obligated to comply that they cannot agree to extend or decrease the statute of limitations. Beginning from this essence, intellectual property holders whose intellectual property is being infringed must actively request the Court or Arbitrator to protect their legitimate rights and interests when infringing within the time prescribed by law. If the statute of limitations expires, the intellectual property right owner will lose the right to initiate a lawsuit as prescribed.

Depending on each specific dispute and determining the nature of the dispute, the application of the statute of limitations will be different. For instance, the statute of limitations for initiating a lawsuit to request the Court settle a contract dispute related to the intellectual property and claim for damages is 3 years from the date the claimant knows or should know their legitimate interests are infringed. In contrast, the statute of limitations for lawsuits applied to commercial disputes is two years from when legitimate rights and benefits are infringed.

1.2 Is there an exception case that allows the statute of limitations not to be applied?

According to the provisions of the current Civil Code, some cases are considered as exceptions because when one of these cases occurs, the statute of limitations will not apply:

  1. Requesting to protect personal rights not attached to the property.
  2. Requesting for protection of property rights, unless otherwise provided by this Code or other relevant laws.
  3. Disputes over land use rights in accordance with the Land Law.
  4. Other cases prescribed by law.

In addition, when a force majeure event, an objective obstacle and other cases prescribed by law leads to an intellectual property holder having the right to initiate a lawsuit but unable to initiate a lawsuit, the time for Force majeure events or objective obstacles will not be included in the statute of limitations for initiating a lawsuit.

1.3 Legal consequences when the statute of limitations expires

In case the intellectual property right holder initiates a lawsuit when the statute of limitations expires. Simultaneously, the other party requests the application of the statute of limitations before the first-instance Court issues a judgment or decision to settle the case. Therefore, the Court will have to suspend the application of the statute of limitations according to the provisions of Article 217 of the Civil Procedure Code. Unless the dispute is in the case (i) the statute of limitations for initiating a lawsuit cannot be applied or (ii) it is proved that the time of failure to exercise the right to initiate a lawsuit is an objective obstacle, the time of occurrence of the objective obstacle shall not be counted on the statute of limitations. The statute of limitations will then be extended.

2. Is the application of the statute of limitations for initiating lawsuits on intellectual property disputes guaranteed to protect the legitimate rights and benefits of the intellectual property owner?

From the author’s point of view, applying the statute of limitations for filing a lawsuit for an intellectual property dispute does not protect the legitimate rights and benefits of the owner. Firstly, as mentioned at the beginning of the article, intellectual property is uncommon because of its intangible nature. Owners cannot hold their intellectual property. Intellectual property creators are recognized as owners when they invest their money, efforts, and creativity to create intellectual property, such as works, trademarks, inventions, industrial designs, utility solutions. Simultaneously, the owner must satisfy the conditions for registration of protection for objects subject to compulsory regulations. In addition, intellectual property is easy to infringe because an organization or individual infringes – they do not necessarily hold the property itself, so there is no act of transferring from the owner to the person who committed the act of infringement. Infringement can be made simultaneously while the owner is still using it and is in the period of protection. Secondly, except for business secrets, trade names, and well-known trademarks, most types of property are protected for a certain period. The most important meaning of intellectual property protection is that the owner has the exclusive right to use the protected property within the scope and term of protection.

From the above two bases, if the owner of an intellectual property right knows an infringement but fails to exercise the right to initiate a lawsuit and the statute of limitations expires, the owner may not request a court or arbitration to protect legitimate rights and benefits. The application of the statute of limitations for filing a lawsuit against intellectual property assets that are still within the protected period under the provisions of the intellectual property law is not convincing. There was a case in the People’s Court of Appeal that the application of the regulation on the expiration of the statute of limitations for initiating a lawsuit resulted in the suspension of the settlement. Accordingly, the plaintiff is the owner of the utility solution patent, which was granted exclusive protection on December 20th, 2002, and is valid until August 20th, 2011. When the plaintiff discovered that there was an infringement of intellectual property, the plaintiff did not initiate a lawsuit. Alternatively, the plaintiff reported to the district-level People’s Committee, and sent a notice to the defendant to request an end to the violation. The case has also been jointly handled by the district-level People’s Committee and the Department of Science and Technology’s Inspection Team. However, from the time the plaintiff discovered an infringement (2003) until the time the People’s Committee transferred the file to the Court for settlement on March 24th, 2008, the Court of Appeal applied regulations on the expiration of the statute of limitations for initiating lawsuits to terminate the settlement of the case. In this dispute, the plaintiff had to spend much time asking state authorities to protect his rights and interests from 2003 until July 2011. The Cassation Decision No. 06/2015/KDTM-GDT was made to cancel the decision to terminate the case settlement and handed over the case file for re-trial. Lessons learned from the above dispute is that the plaintiff should still actively file a lawsuit when detecting an infringement. The exercise of the right to sue and concurrently implement other handling measures as other means to protect their intellectual property rights.

Whether the owner of intellectual property due to the expiration of the statute of limitations for initiating a lawsuit, his/her legitimate rights and benefits are infringed upon, are not protected by law, and the party performing the infringing act is not forced to perform the obligation. The dispute mentioned above still has many shortcomings in the proceedings, from determining the time to calculating the statute of limitations for initiating lawsuits, evidence, violations, etc. Therefore, in the author’s view, the owner should actively register for intellectual property protection as soon as they are created and actively apply more measures to handle violations properly and prevent risks. The protection of the intellectual property is not merely the protection of the commercial value that the organization or individual can receive. It is essential to protect their efforts and business reputation in the market, prevent acts of counterfeit goods, and contribute to protecting the interests of consumers. 

Besides the civil lawsuit measures in this article, the intellectual property owner can still consider and apply other dispute resolution measures related to intellectual property. These measures will be mentioned in the following article.


Application Of Financial Sanctions In Labor: Quick But Challenging

Sanctions on monetary fines or deducting the employee’s salary (“the Employee”) (also known as financial sanctions in the field of labor) are no longer new to many enterprises nowadays, especially in a large workforce enterprise. Enterprises favor financial sanctions because of the speed and convenience in handling violations of labor discipline. However, is it not challenging to apply financial sanctions in labor quickly?

  • Firstly, about monetary fines

Sanctions on monetary fine means that the enterprise forces the Employee to pay a certain amount of money to the enterprise when the Employee violates the labor regulations, the company’s criteria, or infringes the “standards” enterprise culture. This sanction currently exists and “morphs” with many different forms besides the two commonly used forms of fines, including the Employee directly paying fines or indirectly being deducted salary by enterprises. And regardless of form, this sanction always affects the Employees when their income is reduced.

The monetary fine is strictly prohibited from the legal perspective, including the Labor Code 2012 and the Labor Code 2019 (“LC 2019”). It is not prescribed as a substitute for any form of sanction of labor discipline.  Therefore, it could be concluded that a monetary fine is a form of unorthodox labor discipline applied by a part of enterprises arbitrarily. In that case, enterprises shall risk being sanctioned for administrative violations in the field of labor with a fine ranging from VND 20,000,000 to VND 30,000,000 if detected or inspected by a competent authority.  In addition, enterprises are forced to take remedial measures such as returning the collected fines or paying total deducted salaries to the Employees.

From the above arguments, the author recommends that enterprises remove the monetary fines from the forms of labor discipline for the Employees in managing and sanctioning because this sanction is contrary to the law.

  • Secondly, about deducting the Employee’s salary

During the “life cycle” of an employee at an enterprise, it is not difficult to come across a case where the Employee is obliged to pay a certain amount of money to the enterprise. Some common cases such as the Employee receive cash from the company to serve the purpose of work or collect money from customers/partners for the enterprise, but they lost that money; the Employees buy/import goods from the enterprise but have not yet paid; the Employee loses or damages property, causes damage to the enterprise and incurs liability for damages arises; or other cases that cause debts (hereinafter referred to as “Debts”). However, the Employees are often unable to pay all and one-time Debts to the enterprise. As a result, the enterprise is required to deduct from the Employee’s salary to compensate for the loss by the Employee. The deduction salary once or many times and the deduction rate are not the same for each enterprise case. The deduction of salary would be considered based on many related factors such as whether the debt is significant, whether the salary of the Employee is high, whether the Employee’s working time is long or only in the next few days the labor contract will be terminated. So, in the above cases, is the enterprise’s deduction of the monthly/multi-month salary of the Employees by current legal regulations?

The salary deduction is understood as the fact that the enterprise actively deducts a part of the Employee’s salary to compensate for the amounts that the Employee is responsible for paying or material damage caused by the Employees.

According to the law, enterprises are only allowed to deduct the salary of the Employees in some instances to compensate for damage caused by the Employees like: damaging tools, equipment, assets of enterprises or assigned to manage by enterprises or the Employee commits actions of causing non-serious damage due to negligence. And, the actual damage value due to the above acts does not exceed 10 (ten) months of the regional minimum salary announced by the Government applied at the workplace. At that time, the Employee must compensate the enterprise for the actual damage, but not exceeding 03 (three) months’ salary, and gradually deducted from the salary. The maximum amount an enterprise may deduct from an employee’s monthly salary is no more than 30% of the actual salary received after deductions for payment of compulsory social insurance, health insurance, unemployment insurance, and individual income tax.

Besides, in the principle of payment, enterprises must pay salaries directly, in total, on time and must not limit or interfere with the Employees’ right to self-determination of salary expenditure. Therefore, from a legal perspective, the enterprise is not entitled to replace the Employee to “decide” on the use of salary to deduct equivalent to the debt and fine that the Employee has not completed with the enterprise, except in some cases the law allows the deduction of salary as mentioned above.

When getting evidence (the content side) to deduct employees’ salaries, enterprises need to organize compensation for damage. The order and procedures for handling compensation for damage are detailed in Articles 71 and Article 72, Decree No. 145/2020/ND-CP, a summary of some of the basic contents that need to be followed are:

  • The Employee must make a written report when having behavior that leads to the handling of compensation for damage;
  • The enterprise must notify the mandatory participants in the meeting to handle damage compensation, includes the violating employee, the representative of the internal representative organizations of employees, the price appraiser (if any), and representative of the enterprise about the time and place of the meeting, the full name of the violating employee and the violation behavior at least 5 days before the scheduled date of the meeting;
  • The content of the meeting must be recorded in minutes, approved before the end of the meeting, and signed by the meeting participants.
  • The disciplinary decision of damage compensation must be issued within the statute of limitations for handling.
  • The statute of limitations for handling compensation is 06 months from the date the Employee commits a violation.

Despite the above conditions, many enterprises have ignored the meeting to handle compensation for damage and directly deducted from the Employee’s salary when causing any material damage to the enterprise. This comes from many objective and subjective factors, including that enterprises do not get a correct and timely view of the salary deduction sanction.

Any case of salary deduction that does not fully meet the conditions (in the content side) and form as mentioned above will be considered as illegal salary deduction and an equivalent form of administrative sanction for enterprises that violate are:

  • From VND 10,000,000 to VND 20,000,000 for violations from 01 person to 10 employees;
  • From VND 20,000,000 to VND 40,000,000 with violations from 11 to 50 employees;
  • From VND 40,000,000 to VND 60,000,000 for violations from 51 to 100 employees;
  • From VND 60,000,000 to VND 80,000,000 with violations from 101 to 300 employees;
  • From VND 80,000,000 to VND 100,000,000 for violations from 301 employees or more.

In addition to this fine, the enterprise is also required to take remedial measures to pay the full salary plus the interest on the underpaid salary to the Employee calculated at the highest interest rate on demand deposits of State-owned commercial banks announced at the time of sanction.

In short, the legal consequences of the application of illegal financial sanctions are heavy, affecting the financial, time, and reputation of the enterprise. Moreover, when an enterprise encounters many errors in labor-management activities, agencies, inspection unions, and interdisciplinary examination unions will not hesitate to “pay attention ” to your enterprise. So, does your enterprise want this to happen? The answer is entirely up to your enterprise.