EVFTA Agreement

The EU is currently one of Vietnam’s leading partners in trade with two-way turnover in 2019 reaching 56.45 billion USD, of which the exports reached nearly 41.5 billion USD and imports from the EU have reached nearly 14.9 billion USD. The commitments on intellectual property between the 2 sides have met the needs and expectations of rights holders for protection. However, at the same time, the Agreement is also flexible enough regarding the time to comply with the provisions and other aspects to enable a developing country like Vietnam which is comparatively weaker in terms of economy and enforcement to the EU, time to adjust.

The EVFTA is the result of the growing bilateral relationship between Vietnam and the European Union. It is the most modest demonstration of the harmonizing relationship which aims to promote many aspects between Vietnam and the EU, especially in the field of commerce and trade. One of the most important benefits that Vietnam will gain through this collaboration and relationship with the EU is the growing standards on IP through the trade agreement’s commitments on intellectual property. However, the difference between Vietnam and the EU are significant in terms of development in trade and commercial aspects. Even in the past, the relationships between EU and Vietnam could not pass because of the roadblocks mainly due to these differences.

It is a comprehensive, efficient and high-quality agreement between the two parties which takes into account the difference in their developmental levels as well. The ratification procedures of the agreement were completed on August 1, 2020and since then, there has been a huge boost to Vietnam’s exports which helped in the market diversification and increase in the export products. The agreement also provided the country with competitive advantages in the global market.

Key parts of the agreement

  • Trademark: The most important change for trademarks is the introduction of a clearly defined “genuine use” requirement for defence against the non-use cancellation. The inclusion of this requirement helps to clear the Vietnamese trademark register and exclude the marks that are not used for commercial use. The present law does not mention the general use specifically and the token marks survive because of this provision. The change brought through the agreement is positive because it ensures that only genuine business owners and competitors play in the market. Simultaneously, the agreement also allows the parties to provide that a trademark can be subject to termination if the name has become generic in the trade of the goods or services for which it was duly registered. The reason of such a termination can be the business owner’s inactivity. This type of termination is not present in the trademark law of the country apart from this free trade agreement.
  • Geographical Indications: One of the most pivotal elements of the agreement is the parties’ commitment to implement systematic registration and protection of geographical indications (GIs). While GIs have long been a key interest and point of interest for the EU members, they have been the subject of little attention and importance in Vietnam.

The EVFTA also allows grace periods for the use of certain GIs such as “Gorgonzola” and “Champagne” in certain prior registered marks in Vietnam for cheese and wine, provided there is actual commercial use in good faith, which shows the effort to harmonize the rights of stakeholders from different jurisdictions.

  • Industrial Designs: Under the EVFTA, Vietnam’s system for ensuring the protection of designs will soon see many amendments, as the country will have to accede to the Geneva Act (1999) of the Hague Agreement Concerning the Registration of Industrial Designs within a stipulated time. Vietnam’s participation in this agreement will benefit design applicants, who will have more options and more flexible requirements.

For designs of components of a complex product, only designs and features of designs that are explicitly visible during normal use of the product are protected under the EVFTA. Although Vietnam has issued corresponding regulations and certain procedural laws on visibility of designs, the protection of visible features should be clarified, either by new laws or by changes in practice.

  • Patent: The EVFTA states that the parties will simplify and develop their patent registration procedures by referring to, the Patent Law Treaty (PLT). Vietnam, as an individual nation, has not yet contracted to follow the treaty. Any future amendments to Vietnam’s patent laws will therefore likely be affected by this treaty.

Further, the agreement requires an enhanced mechanism for patent term extension as compensation for any unreasonable delays suffered by a patent owner while waiting for marketing authorization for a pharmaceutical product from an authorized office. As Vietnam has been cited as having “concerning and increasing marketing approval delays,” it is very likely that a mechanism will be added under which patent protection for human drugs can be extended beyond the term of 20 years.

  • Enforcement of IP Rights: The agreement shall explicitly push Vietnam towards a much higher standard for the enforcement by different authorities and organizations so that the companies are influenced to protect their IP in the country. Currently, while customs authorities can be quite effective in border control measures, IP rights holders typically need to proactively engage them to ensure their full involvement.

Other enforcement issues raised by this agreement that will require changes in Vietnamese law and practice include the application of provisional measures and the presumption of authorship or ownership.

The free trade agreement raised the level of commitments between the two. The opportunities and challenges are presented before both Vietnam and EU because of the agreement. This agreement is set to be one of the highest agreements in the world. The commitments under this agreement are comparatively higher.

Conclusion

Strategically, the negotiation and implementation of the Agreement also send a positive message about Vietnam’s determination to promote deep entrance into the global village after the hard implications of the pandemic. Since its official effective date, although there are undeniable difficulties encountered during the first year, in general, the Agreement has created a favourable and developing environment for the cooperation between businesses of the two parties. Nowadays, with the EVFTA officially come into force, other specialties of Vietnam can enter this dominant market and greatly benefit Vietnam’s businesses and most importantly, increase Vietnam’s image on the world stage. However, without specific instructions, Vietnamese businesses may encounter hindrances in the implementation process and thereby lead to the country of Vietnam may not meet the requirements of the Agreement.

Author: Tanya Saraswat – a student at School of Law, Narsee Monjee Institute of Management Studies, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

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