Vietnam’s New IP Sanctions Decree
Vietnam’s Ministry of Science and Technology (MOST) issued Decree No. 126/2021/ND-CP (Decree 126) on December 30, 2021, amending multiple provisions of the government’s Decree No. 99/2013/ND-CP dated August 29, 2013 (Decree 99), which is the statute law on the sanctioning of administrative violations in industrial property. Decree 126 went into force almost immediately with the new year, on January 1, 2022.
While the new decree has several significant improvements that will assist enforcement agencies and practitioners in dealing with infringements of industrial property rights, it also contains some significant flaws when compared to a draft version of the decree released in mid-2021.
Decree 126’s Major Amendments
While Decree 126 keeps the majority of the provisions in Decree 99, it makes important improvements such as broadening the area of regulation, raising the level of administrative penalties, and providing more specific details on violations and remedies.
Initially, Decree 126 broadened the extent of its Article 1 coverage and introduced a new sub-article expressly specifying the entities subject to administrative sanctions, such as corporations, IP agencies, and IP examiners. This new rule makes it easier for enforcement agencies to identify and penalize infringers.
In numerous aspects, Decree 126 has also increased the seizure authority. Previously, authorities may only seize material evidence and methods utilized in the conduct of administrative offences if the entire worth of such items did not exceed the fine for the infraction. The total value of confiscated items may be up to double the stated fine amount under Decree 126. This should have an effect on enforcement activities.
While some of the clauses of Decree 99 are relatively ambiguous and hence difficult to execute, Decree 126 has made an improvement by establishing clearer and more precise laws on breaches and corrective procedures. With these provisions more clearly spelled out in the law, there will be less need for interpretation, making life simpler for both intellectual property holders and enforcement authorities.
Prior to the issuing of Decree 126 in June 2021, MOST released a draft version of the decree for professional and public discussion. In many respects, the draft order would have offered more protection to IP holders than the version that was issued, as well as reduced several barriers to enforcing their IP rights in Vietnam.
The introduction of the export of IP-infringing products to the list of activities subject to administrative punishment was one of the draft decree’s objectives. Unfortunately, Decree 126 did not keep this adjustment, leaving enforcement agencies in a difficult position when dealing with infringements in exported items owing to a lack of guidelines.
Moreover, MOST had deliberately included a longer time limit of two years in the draft decree for imposing administrative punishments on IP infractions, as well as stating that repeated violations constituted aggravating conditions. MOST withdrew these regulations in Decree 126. As a result, the statute of limitations for dealing with administrative infractions is still one year. Most intellectual property owners believe that this time frame is too short to take effective legal action.
More significantly, contrary to what was stated in the draft decree, Decree 126 does not exempt cross-border transit from all kinds of administrative punishments. Decree 126, in example, still clearly mentions cross-border transit as a mode of transporting products, and so it is still subject to administrative punishments. At the moment, many infringers use the transit regime to deal in counterfeit goods. As a result, authorities should have the authority to handle transit cargo in order to break down on infringement.
The government is drafting a new version of the Intellectual Property Law, which is likely to be published this year. It is envisaged that after the new IP Legislation is in effect, MOST would update and supplement new, tougher IP sanctions laws in accordance with the new law.
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