Enhancement of IP protection in Vietnam via new Penal code

July 1, 2016, was the day when the new Penal Code 2015 came into existence by replacing the then current Penal Code. The new Penal Code brought a number of transformations as far as trademarks and other IP‘s are concerned. The new Penal Code has enhanced the capability of brand holders in enforcing their trademark and Intellectual Property rights.

The transformations introduced by the new Penal Code 2015, mainly includes:

1. It is for the first time that criminal liabilities may be applied to legal entities (juridical persons, as opposed to individuals) for various crimes, which includes:

• the crime of manufacturing and trading in counterfeit goods (Article 192);
• the crime of manufacturing and trading in counterfeit foods, foodstuffs or food additives (Article 193);
• the crime of manufacturing and trading in counterfeit curative medicines or preventive medicines (Article 194);
• the crime of manufacturing and trading in counterfeit animal feeds, fertilizers, veterinary drugs, plant protection drugs, plant varieties and animal breeds (Article 195);
• the crime of violating copyright and related rights (Article 225); and
• the crime of violating industrial property rights (trademarks and geographical indications) (Article 226).

2. The solutions for handling the criminal liabilities applied to legal entities may include:

• monetary fines;
• suspension of business;
• prohibition on doing business; and
• prohibition on raising capital.

The above mentioned criminal liabilities to legal entities introduced by the new Penal Code have enabled robust and highly effective investigations and prosecutions against organized crime related to trademark and other Intellectual Property. It has also helped in eradicating the repeated crimes of manufacturing and trading of counterfeit goods, also on those goods which are infringing on IP rights, especially copyright, trademarks and geographical indications.

Related to the crime of manufacturing and trading in counterfeit and infringing goods, the new Penal Code 2015 has provided for new, lower thresholds:

Counterfeiting Goods:

The manufacturing and trading of counterfeited goods having values of approximately US$89 or above is enough in constituting the crime of manufacturing/trading in counterfeit goods.

Infringements Goods:

In the previous penal code, the act of intentionally infringing the rights protecting a trademark or geographical indication on “a commercial scale” was enough in constituting the violation of industrial property rights. But, it was difficult to enforce this provision because of the absence of guidelines on when an infringement was considered “on a commercial scale”.

The current Penal Code 2015 has eliminated the phrase “on a commercial scale” and provides the below-mentioned thresholds for the crime of violating industrial property rights.

• the infringer gains an illicit profit of approximately US$ 445 or over;
• the infringement has caused damage to the industrial property right holder of approximately USD890 or over; or
• the infringing goods have a value of approximately US$ 890 or over.

The new Vietnam Penal Code 2015 is a welcome move for brand holders as it enhances the capability of brand holders in enforcing their trademark and Intellectual Property rights.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at [email protected].