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Patent protection in Vietnam under the new legislation

Despite backward technology and high proportion of foreign ownership in registered patents (over 90%), Vietnam has developped a relatively comprehensive legal framwork for patent protection since 1990s. It includes the Civil Code 1995 (Part VI), Decree 63 of the Government guiding the implementation the Civil Code 1995 with regard to industrial property and Circular 34 of the Ministry of Science and Technology guiding establishment of patent rights. However, the great number of implementing documents creates overlap making enforcement difficult.
The recent reform of law on intellectual property has gathered scattered provisions on patent protection under the Civil Code 2005 which came into effect as of January 1st, 2006 and the Intellectual Property Law (“the IP Law”) which will become effective from July 1st, 2006. The Civil Code 2005 includes only some general provisions for protection of IP rights i.e. 4 articles, from 750 to 753, compared with 26 articles, from 780 to 805, in the old Civil Code 1995. The IP Law creates a rather complete framework for the protection of IP rights, including patent rights.
Below are the main features of the IP Law with regards to patent protection:
1. Conditions for patentability :
According to the IP Law, two types of protection are available for utility invention i.e. an invention and a utility solution. To be protected as patent, the invention must (i) be new; (ii) involve an inventive step; and (iii) be capable of industrial application. To be protected as utility solution, an invention does not have to involve an inventive step.
The newness is determined in comparison with the current level of technology worldwide. According to the IP Law, an invention is not considered as losing its novelty if the patent application is filed within 6 months from the date on that it is published as a scientific report or exposed in a national exposition in Vietnam or in a recorgnised international exposition or published without the consent of the person eligible for patent application (Article 60). Previously, an invention may be considered as not new if it has been disclosed in such cases before the priority date (having said this, however, Article 17.2b of Decree 63 permitted the applicant to claim priority within 6 month counted from the exposition date).
An invention shall be deemed as involving an inventive step if it is the result of creative activity in comparision with the available domestic and foreign technology and it can not be easily made by a person with average skill in the correlative technical field (Article 61).
An invention is considered as capable of industrial application if it can be applied to produce series of goods or if the patented process can be repeated with stable results (Article 62).
2. Term of protection
According to the IP Law, the term of protection for a patent is 20 years, and for an utility solution is 10 years counting from the filing date of the application (Article 93).
3. Establishment of patent rights
Patent rights are established only on the basis of registration certificate granted by the state competent authority. First-to-file principle and priority principle are both applied for filing patent application. Of note, the new IP Law gives grounds for patent co-ownership. Article 86 states that where two or more individuals or entities have together created or invested to create an invention, they can jointly file a patent application.
There are very few changes in patent registration procedure under the new IP Law compared with the previous regulations. Patent applications should be filed with the National Office of Intellectual Property and then be examined as to formality within one month from the filing date. After being accepted as to formality, the application will be published in the Industrial Property Official Gazette for opposition purpose. The publication is made during the 19th month from the filing date or the priority date (if any) or an earlier date upon the applicant’s request (Article 110). Substantive examination can be made only upon the applicant’s request and its time limit shall be 12 months counted from (i) the publication date of the application if examination request is filed before the publication date or (ii) the date on that the examination request is filed if examination request is filed after the publication date.
4. Patent scope
Inventor enjoys moral and property (economic) rights. His moral rights include the rights to insert his name: (i) in the patent certificate; (ii) in all publications and introduction materials relating to the patent (Article 122). His property right is the right to receive remuneration. Unless otherwise agreed between the inventor and the patent holder, the minimum remuneration which the patent holder has to pay to the inventor is: (i) 10% of benefits derived from the use of the patent; (ii) 15% of the total amount which the patent holder receives from each payment of patent license (Article 135).
Patent holder has economic rights, including the rights to use, to authorise or forbid others to use and to transfer the patent (Article 123). Of note, the IP Law has replaced the term “exclusive rights” used in the Civil Code 1995 by “the rights to use, to authorise or forbid others to use and to transfer”. However, this change will probably not affect the nature of the economic right as defined by the old Code. In addition, the applicant’s temporary right is officially provided in the IP Law.
Limitations to patent rights under the IP Law include : (i) the right of prior use (Article 134); (ii) the obligation to pay remuneration (Article 135) ; (iii) the obligation to use (Article 136) ; (iv) the obligation to grant a compulsory license according to state decisions; and (v) the obligation to permit others to use the dominant patent for the purpose of use of a dependent patent where it is impossible to use the dependent patent without infringing the dominant patent (Article 137).
The starting point to determine the right of prior use under the IP Law is the date on that the application is published, whereas under the previous regulations, this starting point is the date on that the application is filed.
In addition, patent holders can not prevent others from following acts : (i) use of patent for personal et non commercial purpose, or for purpose of evaluating, analysing, researching, teaching, experimenting, production testing or collecting information for the purpose of obtaining a permission to produce, import and circulate the products; (ii) use of patent for the purpose of maintaining operations of foreign tranport means temporarily entering or being in the territory of Vietnam (Article 126).
5. Conpulsory license of patent
A patent may be transfered according to assignment or license agreements in compliance with general legal provisions governing the transfer of industrial property rights. However, the IP Law includes specific provisions governing the grant of compulsory licence of patent.
Basis for compulsory license of patents:the relevant State competent authorities have the right to grant patent licenses to interested third parties without the patent holder’s consent in the following cases: (i) the use of patent for purpose of public interest, non-commercial purpose, national defense and security, health, nutrition or other urgent public demands; (ii) 4 years after the filing date and 3 years after the date of grant of patent certificate, the holder of the patent exclusive rights does not fulfil the obligation to use; (iii) the person demanding the use of patent has failed to reach an license agreement with the holder of the patent exclusive rights after having made efforts in negotiating on price and commercial conditions during a reasonable time; (iii) the holder of the patent exclusive rights is considered as having anti-competitive practices prohibited by the law on competition (Article 145).
The scope of compulsory license: Compulsory license is non exclusive. The licensee can not neither transfer the use of the patent to a third party, unless together with transfer of the whole business, nor grant sub-licence. The scope and term of compulsory license are limited to meet the legal licensing objectives only. The licensee must pay the licensor a reasonable royalty in compliance with the remuneration rates to be defined by the Government (Article 146).
Competence: The Ministry of Science and Technology and other Ministries and ministry-level agencies are comptent to decide compulsory licenses.
(30/5/2006)