VF Franchise Consulting

Pacific Trade Agreement Triggers IP Overhaul in Vietnam

Jun 18, 2019

By Lien Hoang.

  1.  New rules expand rights to trademarks and patents under deal ratified by seven countries.
  2. U.S. companies can make limited use of provisions because Washington withdrew from accord in 2017.

The Pacific trade pact is expected to give Vietnam a complete intellectual property makeover, covering everything from fast-food chains to patented inventions, even those owned by U.S. firms.

Vietnam has published rules that expand the rights to trademarks, geographical indications, and patents to comply with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The rules, in Notice 1926 from the National Office of Intellectual Property, are just the beginning of IP legal revisions that will be ushered in by the CPTPP. The trade deal ratified so far by seven countries from Australia to Mexico to Singapore goes beyond tariffs to set rules of modern commerce, from online shops to the trademarking of sounds.

One section in Notice 1926 makes it harder for third parties to oppose trademark deals. For example, a Vietnamese company could pay royalties to Barnes & Noble to license its brand. In the past, a third party could challenge the licensing contract if it wasn’t recorded with Vietnam’s IP office. Notice 1926 removes that requirement in an effort to protect contracts even if they’re not recorded.

“I think removing that requirement will give trademark owners and licensees more freedom,” said Yen Vu, Vietnam country manager for Rouse Legal Vietnam.

She said in a phone interview the changes are part of a dramatic IP transformation, saying, “It’s quite exciting news for Vietnam, as it ratified the CPTPP.”

VF Franchise Consulting Chief Executive Officer Sean Ngo hopes the new regulations will attract more foreign firms to Vietnam, where brands from 7-Eleven to Spotify have arrived in recent years.

“Trademark infringements and enforcement is a major cost and burden for many businesses that wish to enter Vietnam,” according to Ngo, who advises for brands like Little Caesars, Cold Stone, and Texas Chicken. He told told Bloomberg Law that “This [regulation] could only help the burgeoning franchise industry.”

U.S. Impact

Another section in Notice 1926, released Feb. 1, offers details on how Vietnam will treat geographical indications, which the World Intellectual Property Organizations describes as “a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.”

The new rules greatly restrict use of a term or name for a product, if successfully trademarked—and are the reason, for example, that sparkling wine can only be labeled “champagne” if produced in the namesake French region.

Under the CPTPP, Vietnam now protects geographical translations or transliterations of these terms or names, and allows parties to challenge a geographical indication in the same way they already could challenge registration of a patent or industrial design.

U.S. companies can make use of Notice 1926 in some instances but are limited because Washington pulled out of the Pacific trade accord in 2017. Countries that stayed in the agreement are pressing on with recognition of one another’s geographical indications, from Japan’s Kobe beef to Mexico’s Bacanora liquor.

The CPTPP also extends patent rights. Vu said a problem that creators had identified was that they might disclose information about their inventions, such as at a trade show, and the disclosure hurt their claims of “novelty” when applying for patents. But the trade pact allows inventors to still argue novelty as long as they apply for patents within 12 months of the disclosure.

Hanoi codifies this in Notice 1926, which Vu noted is available even to non-CPTPP members.

“Anyone using the law to protect their rights in Vietnam or to enforce their rights in Vietnam are entitled to the benefits it brings about,” she said. “So even though America is not party to TPP its companies and individuals are entitled to enjoy the benefits.”

To contact the reporter on this story: Lien Hoang in Ho Chi Minh City at [email protected]

To contact the editors responsible for this story: To contact the editors responsible for this story: Seth Stern at [email protected]; Jerome Ashton at [email protected]; Madelyn Callahan [email protected] © 2019 The Bureau of National Affairs, Inc. All Rights Reserved

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