EVFTA AGREEMENT, IS THERE ANY SANCTIONS TO HANDLE VIOLATIONS OF COUNTERFEIT GOODS?

Vietnam participates in many conventions on intellectual property, but is a country that enforces the protection of intellectual property rights at a relatively low position. This is also very worrying because Vietnam recently signed the EVFTA trade agreement with commitments on highly protective intellectual property. So what sanctions does the EVFTA provide for those violations of counterfeit goods? What do Vietnamese businesses need to do to develop smoothly in accordance with EVFTA?

1.         Regulations on counterfeit goods in the EVFTA Agreement

The Vietnam – EU Free Trade Agreement (EVFTA) comes into effect, many Vietnamese products exported to the EU market will have tax reductions. In contrast, many products from the EU imported into Vietnam also receive tax reductions according to EVFTA commitments. However, at present, the problem of counterfeit goods, especially those traded on the Internet, is still very difficult to control and prevent completely, is putting pressure on Vietnamese goods in the process of competing with imported goods of high quality and EU standards in the domestic market.

The Agreement provides specific definitions of: counterfeit goods, goods with counterfeit geographical indications, goods with counterfeit trademarks, exported goods, imported goods, goods that infringe intellectual property rights, goods piracy of copyright. According to Article 12.57 of the EVFTA Agreement, counterfeit goods are goods with counterfeit trademarks and goods with counterfeit geographical indications.

–           In particular, goods with counterfeit geographical indications are goods, including packaging, that illegally contain geographical indications identical to validly registered geographical indications for goods of the same type, or the main element of the geographical indication cannot be distinguished from the registered geographical indication and the import of the goods would infringe or the export of the goods would constitute an infringement of the right to the geographical indication concerned under the law of the Party in which the goods are discovered.

–           Counterfeit trademark goods are goods, including packaging, that inlegally contain a trademark identical to a duly registered trademark for such goods or the essential elements of the mark cannot be distinguished from the registered mark, and the import of the goods would infringe or the export of the goods would constitute an infringement of the rights of the owner of the relevant trademark. according to the provisions of the law of the Party where the goods are discovered.

–           In addition, EVFTA also explains the concept of goods that infringe intellectual property rights and goods that pirate copyright. Accordingly, “goods that infringe intellectual property rights” are counterfeit and pirated goods whose import or export, according to the law of the Party where the goods are discovered, is an infringement Intellectual property rights. Copyright pirated goods are any copied  goods without the consent of the copyright holder or a person authorized by the copyright holder in the country of copying and made directly or indirectly from a work the making of a copy of which, as well as importing or exporting, would constitute an infringement of copyright or related rights under the laws of the respective importing or exporting Party.

2.         Some EVFTA sanctions when there is a violation of intellectual property  

EVFTA is a new generation free trade agreement between Vietnam and 28 EU member countries. EVFTA, along with CPTPP, are two FTAs with the widest scope of commitments and the highest level of commitment of Vietnam ever. EVFTA is considered comprehensive, high quality, balanced in benefits for both Vietnam and the EU, and in accordance with the regulations of the World Trade Organization (WTO) including provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Unlike CPTPP, EVFTA makes many references to TRIPs, excluding regulations on enforcement of intellectual property rights by administrative and criminal measures.

–           Regarding civil measures:

EVFTA has regulations on the right to file applications, temporary emergency measures, evidence, and compensation for damages that are stipulated in quite detail in the CPTPP. Accordingly, the person has the right to file a request to apply civil measures to handle infringement of intellectual property rights as stipulated in Article 12.44, which includes:

(i)         The holder of intellectual property rights complies with the provisions of applicable law;

(ii)        All persons authorized to use such intellectual property rights;

(iii)       Organize collective management of intellectual property rights; and (iv) Professional organizations.

In addition to the provisions on compensation for damages similar to TRIPS and CPTPP, the EVFTA stipulates compensation in cases where the infringer does not know or has reasonable grounds for not knowing that he or she is involved in the act of infringement ( Article 12.51.2). Accordingly, “a Party may provide that the competent judicial authority may request, in support of the injured party, an offset of profits or damages in a specified amount”.

–           Regarding border control measures:

The EVFTA Agreement stipulates that when implementing border measures to enforce intellectual property rights, the Parties must ensure compliance with the obligations under the General Agreement on Tariffs and Trade GATT 1994 and TRIPS, specifically Article V of GATT 1994, and Article 41 and Section 4 of Part III of TRIPS. According to the provisions of Article 12.59, customs authorities must, based on risk analysis techniques, be proactive in detecting and identifying imported or exported shipments suspected of infringing intellectual property rights. These customs authorities must cooperate with rights holders, including allowing the provision of information for risk analysis.

–           Enforcing intellectual property rights in the digital environment:

EVFTA also includes regulations on the responsibilities of intermediary service providers (Article 12.55). Accordingly, each Party shall provide in its national law limitations or exemptions regarding the liability of intermediary service providers for infringements of copyright and related rights occurring on telecommunications networks relating to the provision or use of services by intermediary service providers.

Besides, unlike CPTPP, EVFTA includes detailed commitments on cooperation between the European Union and Vietnam in the field of intellectual property, including enforcement of intellectual property rights (Article 12.60 and Article 12.62).

–           Other sanctions:

In addition to the above sanctions, if the goods are deemed by competent judicial authorities to infringe intellectual property rights, those goods may be required to destroy raw materials and equipment mainly used to create or produce infringing goods, or dispose thereof outside of commerce in a manner that minimizes the risk of re-infringement. The foregoing shall be done at the infringer’s expense, except where there are specific reasons cited for not doing so.

>> METHOD OF IPR PROTECTION ABROAD https://linconlaw.vn/method-of-ipr-protection-abroad/

>> WORK PERMIT EXEMPTION FOR FOREIGN WORKERS MOVING WITHIN THE ENTERPRISE https://linconlaw.vn/work-permit-exemption-for-foreign-workers-moving-within-the-enterprise/.

3.         Notes for businesses on international intellectual property  

EVFTA is a comprehensive, high-quality agreement, especially on intellectual property issues. In the current trend of deep integration, a strong intellectual property system is the basis and premise for a country to control business activities and protect brands; Thereby helping to attract investment from multinational companies, increase opportunities to access advanced technologies, create an environment, as well as a solid legal corridor for individuals and organizations to feel secure in their development. Creative ideas, bringing to market quality products with high applicability.

With a relatively high level of commitment in the field of intellectual property, the EVFTA Agreement will create significant challenges in amending domestic law. In addition, in the context that general awareness of intellectual property rights infringement is still low while Vietnam is increasingly integrating deeply and widely as it is today, it is important to increase dissemination and raise awareness of the public and businesses about the commitments of the EVFTA Agreement in this field is extremely necessary.

In fact, the situation of intellectual property rights infringement in Vietnam is still increasingly common and complicated. This has discouraged many investors and is one of the biggest weaknesses and challenges today.

For groups of businesses and rights owners, these commitments not only help increase economic benefits and increase creative motivation, but also contribute to cost savings and confidence in registering for rights protection.

However, for groups of businesses and entities using products protected by intellectual property, if they want to use protected products, they will have to pay high purchase costs, reducing the ability to access cheap products.  Along with that, the increased risk of violation and cost risk due to violation handling will be a special factor for businesses and entities using protected products.

Specific commitments on the level of protection and enforcement of intellectual property rights in the EVFTA Agreement along with commitments on the most favored nation principle to ensure that businesses of both sides enjoy the highest protection that each third party parties are said to have set a new standard in the protection and enforcement of intellectual property rights, meeting the protection needs and expectations of rights holders, but still ensures a certain flexibility so that a developing country like Vietnam can benefit from intellectual property protection.

This will create a favorable environment for investment and business activities of businesses from both sides, and be a driving force to promote high technology transfer activities in agriculture, processing industry, and agricultural and food production. Renewable energy technology, pharmaceuticals, machinery and equipment manufacturing… from the EU to Vietnam.

Intellectual property commitments also bring challenges in terms of stricter anti-infringement of intellectual property rights that can cause Vietnamese businesses to bear the burden of control procedures such as control at borders, especially when falling into disputes and lawsuits.

To be able to benefit from goods from Vietnam that must comply with EU quality standards, businesses must upgrade some products that Vietnam currently does not meet standards for. For example, animal and plant quarantine must be applied to agricultural products, proving that the product is better because there has been bad information related to safety issues in the EU. Thus, although the opportunity is great, businesses need to master market information, rules of origin as well as EU regulations to have a long-term strategy and best approach the market.