Nguyen Ho Bich Hang[1], LL.D. University of Eastern Finland
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| E-commerce platform shopee.vn |
An increase in legal conflicts between countries due to inconsistency of their intellectual property (IP) laws regarding cross-border commercial transactions in the digital environment has posed a challenge for countries, including Vietnam, to improve their domestic laws to adapt to digital transformation and challenges in IP law enforcement and technological application to enhance the protection of IP rights (IPRs). This article analyzes Vietnam’s policies on digital transformation and IPRs, thereby setting orientations for making a more effective legal framework to promote international trade and better protect interests of IPRs holders in the country while participating in cross-border commercial transactions (CCT).
Vietnam’s policies on digital transformation and IPRs
On August 22, 2019, the Prime Minister approved the Intellectual Property Strategy through 2030 under Decision 1068/QD-TTg, laying down a general guideline in Section 1, Article 1: “To develop a synchronous and effective IP system in all creative stages from establishing, exploiting and protecting to enforcing IPRs, thereby creating an environment favorable for innovation and meeting international integration requirements, and making IP an important tool to improve the national competitiveness and promote economic, cultural and social development.”
In furtherance of this guideline, relevant regulations have been improved to regulate CCT in the context of digital transformation. On September 27, 2019, the Political Bureau adopted Resolution 52/NQ-TW on a number of policies on proactive participation in the Fourth Industrial Revolution, setting the target that by 2025 the country will basically complete digital transformation. On June 3, 2024, the Prime Minister issued Decision 749/QD-TTg approving the Program on National Digital Transformation through 2025, with a vision toward 2030, setting a goal to turn Vietnam into a digital country. Article 1 of Decision 749 sets forth the task of institutional facilitation to be performed by the Ministry of Science and Technology, which covers reviewing, and proposing amendments and supplementations to, the system of legal documents on IP aimed to facilitate the national digital transformation process and development of new products, services and business models based on digital technology, the Internet and cyber environment as appropriate to the practical application and development of digital technologies and conformable to international practices and reality in Vietnam.
Especially for new technologies, the Prime Minister on October 22, 2024, issued Decision 1236/2024/QD-TTg promulgating the National Strategy for application and development of blockchain technology through 2025, with orientations toward 2030. The Decision serves as a ground for application of blockchain technology for the development and protection of intellectual property assets.
Relationships between CCTs and the IP law
Relationships between CCTs and the IP law are characterized by the following aspects:
Firstly, CCTs are conducted on a global scale and participated by parties from around the world that apply different legal systems. Therefore, IPRs regulations regarding these CCTs encounter challenges posed by different legal norms, protection standards and enforcement mechanisms[2].
Secondly, IPRs show complexity in the digital environment. Digital transformation leads to an increase in commercial transactions on e-commerce platforms, posing a challenge of protection of IPRs in the cyberspace. Besides, the subject matters of IPRs are vulnerable to infringements in a cross-border environment. In not a few cases, the determination of the competence and applicable laws to handle such infringements usually has faced numerous difficulties[3].
Thirdly, CCTs depend on international commitments. CCTs are usually governed by international agreements to which Vietnam is a contracting party, including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other bilateral free-trade agreements. These agreements aim to harmonize domestic IP laws of the Member States. As a State Party, Vietnam is obliged to revise its domestic regulations to conform to standards set in the above international agreements while protecting national interests and benefits of stakeholders.
Situation of IPRs infringements and inadequacies in IPRs enforcement in the digital context in Vietnam
IPRs infringements on digital platforms and e-commerce platforms
Since the participation in commercial transactions has become much easier and more convenient, IPRs infringements in the digital environment, including hi-tech crimes against business secrets, Internet TV services using illegal IP protocols or other illegal forms of content transmission infringing upon copyright and related rights or sale of IPRs-infringing goods via e-commerce platforms and social networks, have posed a great challenge for IPRs enforcement by the countries around the world.
In Vietnam, e-commerce has helped promote market expansion but concurrently nurtured the risk of cross-border IPRs infringements against almost all subject matters of IPRs. Individual and institutional IPRs holders should use online monitoring tools and cooperate with e-commerce platforms in protecting IPRs.
In reality, IPRs infringements on digital platforms and e-commerce platforms have taken place in a complicated manner in Vietnam and remain hard to detect. Most of them involve goods bearing counterfeit marks and geographical indications. To address this situation, the Government issued Decree 85/2021/ND-CP amending a number of articles of Decree 52/2013/ND-CP of 2013 on e-commerce (Decree 85). Article 67a of Decree 85 clearly defines the functions and roles of e-commercial exchanges, particularly those of foreign traders and organizations possessing websites to provide e-commerce services in Vietnam. This serves as an important legal ground for enhancing the responsibility of those foreign traders and organizations, especially for their e-commerce exchanges’ payment of compensation for damage caused by infringements to IPRs holders and for prevention of trading in IPRs-infringing counterfeit and imitate goods.
Regarding intermediary services, the IP Law’s Article 198b stipulates the responsibility of intermediary service providers toward protection of copyright and related rights against infringements.
Inadequacies in IPRs enforcement in Vietnam
The first problem to mention is that administrative sanctions remain not commensurate to the nature and severity of infringements. For example, under Article 2.1 of Decree 131 of 2013, the maximum fines for individual infringers and institutional infringers are VND 250 million and VND 500 million, respectively, which are fairly low compared to illicit profits earned from infringements[4], and therefore have poor deterrent and preventive effects.
The IP regulations still lacks administrative sanctions for certain acts infringing upon industrial property rights. The existing decrees guiding the sanctioning of administrative violations in the field of industrial property provide no specific fine for acts infringing upon the right of IPRs holders to apply technological measures for self-protection though this right is already provided in Article 198.1.a of the IP Law.
Another issue is that the criminal law prescribes no penalties for certain acts infringing upon industrial property rights, including the act infringing upon the right of IPRs holders to apply technological measures for self-protection.
One more thing lies in the inappropriateness of civil sanctions for infringements upon economic rights under the IP law, including forcible payment of compensations for material and spiritual damage of IPRs holders. These sanctions remain too low compared to illicit profits earned from IPRs infringements, particularly those committed on social networks and e-commerce platforms[5].
In order to effectively protect their IPRs, Vietnamese entities and individuals should combine legal measures with technological measures as specified in Article 198 of the IP Law.
IPRs protection with technological measures
In addition to registration for IPRs protection with competent state agencies based on the first-to-file principle, IPRs holders should consider applying the following technological measures to prevent infringements.
Technological measures to control methods of accessing and using digital contents regarding copyright and related rights
These measures aim to prevent illegal use, reproduction and distribution of subject matters of copyright and related rights. As defined in Article 4.10.b of the IP Law, technological measures for rights protection means using any means, techniques, technologies or equipment that, in their normal operation, function mainly to protect copyright and related rights against acts unauthorized by copyright or related rights holders. Article 4.10.c allows authors and rights holders to apply effective technological measures to control the use of works, performances, audio/video recordings, broadcasts, satellite signals carrying encrypted programs via access control applications, protection processes or reproduction control mechanisms as specified in Article 61 of Decree 17/2023/ND-CP. These technological measures may include the following:
· Digital rights management (DRM) technology, which is capable of controlling all accesses to copyrighted works in order to limit acts likely to infringe upon digital content copyright[6].
· Blockchain technology, which may provide reliable information in cases involving ownership, licensing and monitoring of the use of digital content.
Technological measures to help protect industrial property rights
These measures include solutions to protect inventions, industrial designs, marks, geographical indications, and business secrets through advanced technologies. Protection measures using these technologies include: (i) providing indicative information about grounds for establishment, protection titles, holders, and protection scope and duration, and other relevant information about industrial property rights on products in order to announce that these products are subject matters of protected industrial property rights and warn others not to infringe upon; and (ii) using technical tools or measures to mark, recognize, distinguish and protect protected products under Article 88.2 of Decree 65/2023/ND-CP. The existing technological measures include:
· Blockchain technology, which helps digitally identify rights holders, trace product origin and digitally record relevant documents;
· Smart contracts, which help facilitate IPRs protection through transferring or assigning IPRs to other holders in a blockchain-based environment;
· Origin traceability technology, which is applied to trace the origin of consumer products, thereby ensuring product quality and limiting products bearing counterfeit marks or geographical indications; and,
· Artificial intelligence technology, which is used to identify images, compare labels, logos or distinctive features and packages of products bearing geographical indications available on e-commerce platforms, thereby detecting counterfeit products. This technology may also forecast trends of infringing upon industrial property rights and give early warnings of infringements to rights holders for seeking appropriate solutions.-
[1] Email: hang.nguyen@uef.fi
[2] For instance, the European Union has different definitions of geographical indications depending on types of products. Food and agricultural products are protected as protected designation of origin (PDO), protected geographical indication (PGI) or traditional specialty guaranteed (TSG).
[3] For instance, Japan’s Unfair Competition Prevention Act has provisions on handling of acts infringing upon business secrets taken outside Japan’s territory with stringent criminal penalties (fine, imprisonment or both depending on the nature and severity of infringing acts).
[4] Similarly, under Articles 20 and 34 of Decree 131, the maximum fines for acts infringing upon the right to apply technological measures to self-protect copyright and related rights are VND 20 million for copyright and VND 40 million for related rights.
[5] Material damage will be determined under Article 205.1 of the IP Law. If it is impossible to determine such material damage, the court may fix a material damage level not exceeding VND 500 million for IPRs holders to claim compensation. The compensation level for spiritual damage ranges between VND 5 million and VND 50 million under Article 205.2 of the IP Law.
[6] DRM helps control the use of such digital contents such as music, movies, e-books; control the content use right and conditions, and limit the number of devices that can transmit contents or content use duration; and prevent unauthorized reproduction or conversion of contents from one format to another.
