Vietnam’s relaxation of the patent first filing requirements is a strong indication of the country’s commitment to developing its intellectual property system and promoting foreign investment. This change has the potential to shorten the patent application process and clarify the application requirements, reducing the time and expense for businesses. Streamlining the regulatory burden on patent filers should also encourage more foreign investors to file for patents in the country.
Investment and patent filing by foreign entities in Vietnam
Vietnam has become a strategic destination for numerous foreign investors due to its investment-friendly policies, stable economic and social conditions, and an extensive network of investment agreements. Despite the ongoing impact of the pandemic, Vietnam has seen an increase in Foreign Direct Investment (FDI) inflows, demonstrating its resilience as an investment destination.
The introduction of global innovative technology into the national market has been a crucial outcome of Foreign Direct Investment (FDI) in Vietnam, transforming the country’s R&D (Research & Development) environment. In order to promote the development of R&D investment in Vietnam, the Ministry of Politics has proposed the implementation of incentives in future legislation through Resolution 50. As a result of this initiative, foreign investors are increasingly confident in setting up R&D centers in Vietnam, which quickens the process of technology transfer.
Foreign investment has not only driven the growth of R&D, but also the number of patent applications at the Vietnam National Intellectual Property Office (“IP Vietnam”). Over the past decade, the number of patent applications has steadily risen, with foreign applicants submitting significantly more applications than Vietnamese applicants. This trend underscores the increasing importance of FDI in the growth and development of Vietnam’s intellectual property landscape.
As a consequence, Vietnamese intellectual property legislation should provide favourable conditions to attract foreign investors. However, there remains issues in the current regulations and some of them are interpreted strictly in practice, leading to difficulties for foreign applicants. Among them is the issue concerning patents’ first filing requirements.
Requirements for initial filings according to current regulations in Vietnam
Article 23b of Decree 122/2010/ND-CP mandates that organizations or individuals in Vietnam who create an invention or utility solution must first apply for a patent in Vietnam. This requirement applies if they intend to file for foreign patents, to fulfill the patent application security control requirements. Failure to initially file for patent protection in Vietnam for an invention or utility solution created in Vietnam, or related to a Vietnamese organization or individual, will result in an inability to secure patent protection in Vietnam.
Moreover, if the relevant authority classifies the invention or utility solution as a confidential invention, the concerned individual or organization must obtain the necessary consent from the corresponding authority before pursuing international protection. Violating this requirement may lead to administrative or criminal sanctions.
There are several unclear issues under the current Vietnamese regulations. Among the most notable issues are: What is the method for ascertaining whether an invention or utility solution has been developed in Vietnam? If IP Vietnam serves as the Receiving Office (RO), does submitting a PCT international application fulfill the initial filing requirements?
The lack of clarity in existing regulations has resulted in stringent application of the rules and additional procedures for applicants, as demonstrated above. Consequently, foreign applicants file in Vietnam initially for legal compliance and protection, even if they do not intend to file an invention or utility solution application in Vietnam. Moreover, the ambiguity in the provisions may create issues with first filing requirements (foreign filing license) in other countries for the same invention, leading to conflicts for the applicants.
New IP law changing on first filing requirements
The amended IP law, which takes effect in 2023, provides substantive changes to patent first filing requirements. In particular, the law has relaxed the current regulations on first filing requirements. The Amended IP Law clarifies the obligation to file an invention/utility solution for Vietnamese individuals with residency in Vietnam or organizations established under Vietnamese legislation. Although the Amended IP Law does not explicitly state it, the draft Decree explains that filing a PCT international application meets the first filing requirements if IP Vietnam is the Receiving Office (RO). This is a significant improvement compared to the previous regulations.
Many applicants are concerned about the Amended IP Law, which requires filing the first application in Vietnam. However, some applicants only want to file their patent applications directly in foreign countries or through PCT routes with ROs other than IP Vietnam. To address this, we suggest establishing a specific procedure that allows applicants to file their first patent application in Vietnam. This would include a request for identification of a secret invention and brief patent specifications. Doing so would reduce costs associated with preparing specifications in Vietnamese and enable them to file applications abroad later.
Conclusion
The draft Decree, coupled with revisions to the Amended IP Law, addresses a plethora of concerns for applicants, especially foreign ones who previously faced obstacles when seeking to protect their inventions/utility solutions in Vietnam. These changes have also boosted the confidence of foreign companies, as they can now easily hire Vietnamese workers or establish R&D centers in Vietnam without worrying about overly strict first filing requirements as stipulated in previous regulations. Experts predict that Vietnam’s lenient and straightforward patent filing process will attract more foreign investors, which will improve the country’s economic condition.
In conclusion, the relaxation and clarification of patent first filing requirements in Vietnam is a positive step towards creating a more efficient and accessible intellectual property system in the country. While some applicants may have concerns, implementing a specific procedure, as recommended, could help address these issues. Overall, the changes in patent first filing requirements signal Vietnam’s commitment to improving its intellectual property environment and attracting more innovation and investment to the country.
Harley Miller Law Firm “HMLF”
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