Licensing and Intellectual Property in Vietnam
A foreign manufacturer has different options for selling products in Vietnam: direct importing; licensing a Vietnamese firm to manufacture the products using proprietary trademarks, methods or industrial designs; or setting up a venture under Common Investment Law, which came into force on 1st of July 2006.
Licensing a local manufacturer is generally the quickest option for foreign companies, and it offers the licenser some advantages: avoiding all or part of the cost of market research and marketing; using the local company distribution network and expertise, to the extent that the local importer has the latter; and not needing to commit a substantial investment during the risky initial phase of market penetration. The last is a particularly big advantage since many of Vietnam markets, though promising, are too small to justify large-scale investment in production.
Nevertheless, licensing has its downsides: stringent regulations, long approval times, restrictions on payments and limited contract duration, and potential intellectual-property-rights violations. Perhaps the greatest challenge is finding a partner with adequate capacity to manufacture and market the goods. Moreover, there are substantial bureaucratic obstacles to establishing a proper licensing operation.
Moreover, there are limits on the rights of foreign licensers to sublicense technology such as restrictions on tie-in arrangements. The restrictions are generally worded in such a way that the foreign licenser may not unreasonably restrict the licensee, though the determination of what is reasonable is unclear. The length of permitted licensing contracts is 710 years, unless the licensing is part of a foreign-invested joint venture; the arrangement is then subject to negotiation.
A new licensing alternative has begun to emerge in recent years: franchising. According to the World Franchise Council, a trade group, Vietnam had 70 franchise systems and nearly 100 executed franchise agreements in late 2006. About ten foreign franchises were operating in the retail sector in early 2007. Franchising activities will probably grow in the coming years in the food, beverage, fashion and supermarket sectors. Decree 35 of 31st of March 2006 regulates the details of implementation of franchising provisions of the Commercial Law, and Ministry of Trade Circular 9 of 25th of May 2006 regulates registration procedures.
With the promulgation of a revised Civil Code in June 2005 (which took force on 1st of 2006) and the adoption on 29th of November 2005 of a Law on Intellectual Property (which took force on 1st of July 2006), followed by a raft of subsequent implementing decrees, Vietnam consolidated previously scattered regulations on intellectual-property rights (IPR). The Civil Code sets out general provisions for all types of contracts. The Law on Intellectual Property sets regulations on copyright and related rights, industrial-property rights, plant varieties, and policies, procedures and measures for protection. Vietnam agreed to implement the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement immediately upon accession to the World Trade Organisation on 11th of January 2007. The 26th of October 2006 WTO Working Party Report on Vietnams accession outlines in detail the administrative and legal framework for IPR protection. Five implementing decrees for the Law on Intellectual Property were adopted in September and October 2006. Those decrees enacted in September 2006 are Decree 100/2006/ND-CP detailed and implemented the provisions on industrial property rights of the IP Law; Decree 103/2006/ND-CP detailed and implemented the provisions on copyrights of the IP Law; Decree No 104/2006/ND-CP guiding the implementation of articles of the IP Law concerning rights on plant varieties; Decree 105/2006/ND-CP detailed and implemented the provisions on enforcement of the IP Law; Decree 106/2006/ND-CP detailed and implemented the provisions on handling of administrative violations.
In recent years, Vietnam has ratified several international conventions that govern copyright and trademark protection. Vietnam signed the Bern Convention for Protection of Literary and Artistic Works on 7th of June 2004, with effect from 1st of October 2004. The Bern Convention requires the country to protect the copyright of works from 155 other member countries, and it provides for reciprocal protection for Vietnamese works in those countries. On 11th of April 2006, Vietnam ratified the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol), which took force on 11th of July 2006. Under the protocol, those who register trademarks in Vietnam and 66 other member countries and territories enjoy reciprocal protection if they pay the requisite fees.
(Source: TMCnet)
Licensing a local manufacturer is generally the quickest option for foreign companies, and it offers the licenser some advantages: avoiding all or part of the cost of market research and marketing; using the local company distribution network and expertise, to the extent that the local importer has the latter; and not needing to commit a substantial investment during the risky initial phase of market penetration. The last is a particularly big advantage since many of Vietnam markets, though promising, are too small to justify large-scale investment in production.
Nevertheless, licensing has its downsides: stringent regulations, long approval times, restrictions on payments and limited contract duration, and potential intellectual-property-rights violations. Perhaps the greatest challenge is finding a partner with adequate capacity to manufacture and market the goods. Moreover, there are substantial bureaucratic obstacles to establishing a proper licensing operation.
Moreover, there are limits on the rights of foreign licensers to sublicense technology such as restrictions on tie-in arrangements. The restrictions are generally worded in such a way that the foreign licenser may not unreasonably restrict the licensee, though the determination of what is reasonable is unclear. The length of permitted licensing contracts is 710 years, unless the licensing is part of a foreign-invested joint venture; the arrangement is then subject to negotiation.
A new licensing alternative has begun to emerge in recent years: franchising. According to the World Franchise Council, a trade group, Vietnam had 70 franchise systems and nearly 100 executed franchise agreements in late 2006. About ten foreign franchises were operating in the retail sector in early 2007. Franchising activities will probably grow in the coming years in the food, beverage, fashion and supermarket sectors. Decree 35 of 31st of March 2006 regulates the details of implementation of franchising provisions of the Commercial Law, and Ministry of Trade Circular 9 of 25th of May 2006 regulates registration procedures.
With the promulgation of a revised Civil Code in June 2005 (which took force on 1st of 2006) and the adoption on 29th of November 2005 of a Law on Intellectual Property (which took force on 1st of July 2006), followed by a raft of subsequent implementing decrees, Vietnam consolidated previously scattered regulations on intellectual-property rights (IPR). The Civil Code sets out general provisions for all types of contracts. The Law on Intellectual Property sets regulations on copyright and related rights, industrial-property rights, plant varieties, and policies, procedures and measures for protection. Vietnam agreed to implement the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement immediately upon accession to the World Trade Organisation on 11th of January 2007. The 26th of October 2006 WTO Working Party Report on Vietnams accession outlines in detail the administrative and legal framework for IPR protection. Five implementing decrees for the Law on Intellectual Property were adopted in September and October 2006. Those decrees enacted in September 2006 are Decree 100/2006/ND-CP detailed and implemented the provisions on industrial property rights of the IP Law; Decree 103/2006/ND-CP detailed and implemented the provisions on copyrights of the IP Law; Decree No 104/2006/ND-CP guiding the implementation of articles of the IP Law concerning rights on plant varieties; Decree 105/2006/ND-CP detailed and implemented the provisions on enforcement of the IP Law; Decree 106/2006/ND-CP detailed and implemented the provisions on handling of administrative violations.
In recent years, Vietnam has ratified several international conventions that govern copyright and trademark protection. Vietnam signed the Bern Convention for Protection of Literary and Artistic Works on 7th of June 2004, with effect from 1st of October 2004. The Bern Convention requires the country to protect the copyright of works from 155 other member countries, and it provides for reciprocal protection for Vietnamese works in those countries. On 11th of April 2006, Vietnam ratified the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol), which took force on 11th of July 2006. Under the protocol, those who register trademarks in Vietnam and 66 other member countries and territories enjoy reciprocal protection if they pay the requisite fees.
(Source: TMCnet)
Labels: News
posted by WIZPRO | 17:21
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