Intellectual Property Protection: Petty Penalties

 

 

After one year of enforcing the Law on Intellectual Property and Action Plan 168 on preventing and settling intellectual property violations, Vietnam has made certain progress. Mr Hoang Van Phong, Minister of Science and Technology, said: “The awareness of the Ministry of Finance and the Market Management Department (Ministry of Trade), which are daily dealing with the execution of intellectual property protection, is improved. The people are now more aware of protecting their own rights and interests, and distinguishing genuine and counterfeit goods.”

 

However, the progress in awareness remains inadequate to ensure protection for foreign patents. According to Ministry of Science and Technology statistics, intellectual property rights protectors in five provinces and cities checked 21,935 units and addressed 5,739 violations in intellectual property rights and imitated goods. The total penalty was VND11 billion. Counterfeited items were confiscated.

 

Intellectual property protection is a crucial part of the value of products and services. World leading groups like CocaCola, IBM and Toyota have strong brand names with calculated value in billions of US dollars. At present, Vietnamese companies have already established trademarks. Hence, the penalty for violations will be very serious, Phong said.

 

Based on the experiences of many other countries, serious penalties are considered the best measures. In Vietnam, the fine is just a small sum of money. Under current laws, institutional violators will be fined a maximum of VND100 million (US$6,250), but the largest-ever fine was only VND75 million on Lisohaka Company.

Under the government’s Degree 106/2006/ND-CP, issued to replace Decree 12, Vietnam added another regulation allowing fines in accordance with violation value. This is seen as a turning point in penalties for violators. The new decree provides that intellectual property rights violators will be fined a sum of money equal to one to five times the value of imitated commodities. In other words, the fine will be larger if the value of counterfeit goods is higher. Especially, the production and trading of trademark-imitating commodities, and commodities with misleading geographic indicators, will be punished more strictly than the act of violating brand names. This more stringent decree is hoped to further tighten intellectual property observance.

 

Phong said “Ordinary administrative punishment is not enough, intellectual property violation needs a criminal penalty.” The Ministry of Science and Technology is carrying out Action Plan 168 to intensify prevention of intellectual property violations in 2006-2010. This programme requires the joining of many organisations, especially the courts. A national committee must be set up to implement the programme. In addition, Vietnam should introduce programmes for intellectual property development in the fields of production and business, and programmes imposing technical standards on product quality and trademarks.

 

According to the National Office of Intellectual Property (NOIP), the number of Vietnamese companies registered for intellectual property protection is much lower than that of foreign companies. Vietnamese patent registrations accounted for only 9.24 per cent, and Vietnamese brand name registrations were 58.12 per cent of the total. From 1995-2005, patent applications submitted by Vietnamese people made up only 6 per cent of the total in Vietnam, and successful applicants were only 2.2 per cent.