A Free trade Agreement (FTA) is an agreement between two or more countries where the countries agree on certain obligations that effect trade in goods
and services, and protections for investors and intellectual property rights, among other topics.
I. Overview of EVFTA
1.1. Brief introduction of EVFTA:
1.1.1. Legal definitions:
In 2015 the European Union (EU) and Vietnam agreed in principle on a comprehensive and ambitious trade and investment agreement. The European Union Vietnam Free Trade Agreement (EVFTA) which took effect on August 1 2020 paved the way for opportunities to increase trade between the EU and Vietnam.
The EVFTA is a new generation FTA between Viet Nam and the EU. It is a comprehensive and high-quality agreement which ensures balanced benefits for both Vietnam and the EU, with consideration for the differences in development levels between the two parties.
1.1.2. Members and Ratification process
Viet Nam and 28 European Union member states are the members of the EVFTA. On December 1st, 2015, the negotiation rounds of EVFTA were officially announced to be concluded, and its official full text was published on February 1st, 2016. On 26 June 2018, EVFTA was divided into two Agreements in terms of trade and investment. At the same time, the legal review of Investment Protection Agreement (IPA) and EVFTA’s final text was formally concluded. Both Agreements were signed on 30 June 2019. EVFTA and EVIPA were ratified by the European Parliament on February 12, 2020, and approved by the Vietnamese National Assembly on June 8, 2020. For EVFTA, after ratification, this Agreement came into force on August 1, 2020. For EVIPA, on the EU side, the Agreement will still need to be further ratified by the Parliament of all 27 EU member states (after the UK completes Brexit) to take effect
1.2. Nature & Scope of EVFTA
1.2.1. The nature of EVFTA
Firstly, the EVFTA is a win-win trade and it provides balanced benefits for both Vietnam and the EU. The agreement is expected to promote Vietnam – EU trade relations, helping to further expand the market for Vietnamese exports. With the commitments to abolish nearly 100% of import duties as agreed by the two parties, there are huge opportunities to increase the export of Vietnamese products such as garments and textiles, footwear, agricultural and seafood products and others.
Secondly, the provisions of the agreement comply with the provisions of the World Trade Organization (WTO).
Thirdly, the agreement includes intensive, extensive and comprehensive commitments covering the fields of economy, trade, investment and sustainable development issues.
1.2.2. The scope of EVFTA:
The agreement includes 17 chapters, two protocols and several attached memorandums, with main contents covering the following aspects: Trade in goods, Services, investment liberalization and e-commerce, Government procurement and Intellectual property rights. Besides, the EVFTA also covers other aspects such as rules of origin, customs and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, sustainable development, cooperation and capacity building, and legal-institutional issues.
2. Intellectual property (IP) in EVFTA
- Position: Intellectual Property (IP) is mentioned in Chapter 12 of the EVFTA.
- Nature & scope: IP in the EVFTA specifies rights and obligations between the Parties with an aim at ensuring adequate and effective implementation of those treaties, as well as the balance between the rights of intellectual property holders and the interest of the public. IP in this agreement refers to all categories of intellectual property. IP in the EFVTA also includes plant varieties, which in line with Vietnamese law.
- Specific areas regulated in EVFTA: According to Article 12.2.2 of the EVFTA, there are 7 categories of intellectual property, namely: (a) copyright and related rights; (b) trademarks; (c) geographical indications; (d) industrial designs; (e) patent rights; (f) layout-designs (topographies) of integrated circuits; (g) protection of undisclosed information; and (h) plant varieties.
II. Protection of IP in EVFTA
1. Standards concerning IP rights
A trademark is used to distinguish the goods and services of one trader from those of another; to put it simply, a trademark could be a word, phrase, signature, drawing, symbol, stamp, vignette, logo, picture and/or aspect of packaging that is unique to an organization. Once a trademark becomes a valuable asset, it may become a target for competitors in the region. New companies may try to use a trademark without its owner’s permission thus either unfairly leveraging the equity that he would have accumulated over the years or at worse erode his trademark’s equity.
The EVFTA contains a range of provisions outlining, inter alia, the international treaties related to trademark protection, rights conferred by a
trademark, exceptions and the revocation of a registered trademark. Main issues of Trademark in EVFTA:
(i) International treaties related to trademark:
According to article 12.17 of EVFTA, the parties affirm their rights and obligations under the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (the Madrid Protocol), adopted in 1989. Each
party shall use the classification provided in the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, and shall simplify the trademark registration procedures using the Trademark Law Treaty, the Singapore Treaty on the Law of Trademarks as reference points.
These treaties are in 26 WIPO-administered treaties , Viet Nam has been a member of the Madrid Ageement since 8 March 1949 and the Madrid Protocol since 11 July 2006 . These two treaties govern the Madrid system which makes it possible to protect a mark in a large number of countries by obtaining an international registration that has effect in each of the designated contracting party.
The Madrid Protocol aims to make the Madrid system more flexible and more compatible with the domestic legislation of certain countries or intergovernmental organizations that had not been able to accede to the Agreement. EVFTA also requires the parties to use the classification of the Nice Agreement, which is based on the Classification prepared by the United International Bureaux for the Protection of Intellectual Property (BIRPI). This classification consists of a list of classes, together with explanatory notes; and an alphabetical list of goods and services with an indication of the class into which each of the goods or services falls. These classifications exist so that businesses registering a trademark can identify the nature of the related good or service and seek adequate intellectual property protection. As the Nice classification is used by both Viet Nam and EU, trademarks are easy to be recognized, categorized and registered among the parties.
The Trademark Law Treaty and the Singapore Treaty on the Law of Trademarks are used as reference points to simplify the trademark registration procedures because they aim to standardize and streamline national and regional trademark registration procedures, thus making trademark applications and the administration of trademark registrations in multiple jurisdictions less complex and more predictable
(ii) rights conferred by trademark
Under article 12.18 of EVFTA, “a registered trademark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
- Any sign which is identical with the trademark in relation to goods or services which are identical with those for which the trademark is registered; and
- Any sign which is identical with or similar to the trademark in relation to goods or services which are identical with or similar to those for which the trademark is registered, where such use would result in a likelihood of confusion on the part of the public. Viet Nam’s IP law also acknowledges these rights of owners of trademarks.
In particular, the right to prevent third parties from using without permission a registered trademark can be found in article 125 of Viet Nam’s IP Law, but this article also provides exceptions of this right where third parties use the trademarks just for personal use, or other non-commercial activities such as the use for research or educational purposes, etc… And according to article 129, the use without the owner’s permission of any sign which is identical with or similar to the trademark in relation to goods or services which are identical with or similar to those for which the trademark is registered in the course of trade is considered as trademark infringement.
(iii) Revocation of a registed trademark
Article 12.22 of the EVFTA provides that a registered trademark shall be liable to revocation if:
- The trademark has not been put to genuine use by its owner in a continuous period of five years prior to the request for revocation.
- The trademark, after the date it was registered, has become the common name in the trade for a product or service in respect of which it is registered due to the acts or inactivity of the proprietor.
- The use of the trademark is liable to mislead the public to the nature, quality or geographical origin of the products or services for which it was registered. It is noted in EVFTA that the “genuine use” implies real use for the purpose of trading in the goods or services in question so as to generate goodwill. In general, this implies actual sales and there must have been some sales of the goods or providing of the services during the relevant period of time. It is opposed to token or artificial use designed solely to maintain the trade mark on the register .
It is also noted that for Viet Nam, "revocation" is equivalent to "termination" However in Viet Nam’s IP law, as provided in article 95, a registered trademark shall be terminated in cases where its owner has not put it to use in a continuous period of five years prior to the request for revocation, and in some other cases, but the article does not say whether a registered trademark is terminated if it has become a common name after being registered or if it is liable to misleading the public. In addition, Viet Nam’s IP regulations only require the owners to put their trademarks to use, but do not specifically mention the “genuine use” of trademarks. Viet Nam’s IP law only explains in general the cases where trademarks are being used in article 124, and provides that the owners have the obligation to use their registered trademarks.
In conclusion, Vietnam’s current IP law regarding trademark is largely compatible with the EVFTA commitments. However, there are still some issues related to the revocation of registered trademarks that require Viet Nam to make revision to its current IP law.
1.5. Geographical indications:
Regarding Geographical Indications (GIs), it is an important part of chapter 12 (Sub-section 03) in EVFTA, which deals with obligations and commitments at the TRIPS level. Since the EU Members have a tradition of mass production of agricultural products and food of specific regional quality such as Bordeaux wine, Mozzarella cheese, Parma ham, etc., the EU has a high degree of protection of GIs. Therefore the EU attaches special important to this issue in negotiating FTAs in general and EVFTA in particular. Vietnam and the EU will protect each other. GIs based on a specific listing, in which the GIs of Vietnam are all related to agricultural products, food with high export potential.
Main issues of Geographical Indications in EVFTA:
(i) Scope of application:
Article 12.23 reads as follows: “This Sub-Section applies to the recognition and protection of geographical indications for wines, spirits, agricultural products and foodstuffs which are originating in the territories of the Parties. Geographical indications of a Party, which are to be protected by the other Party, shall only be subject to this Sub-Section if they are protected as geographical indications in accordance with the system referred to in Article 12.24 (System of Registration and Protection of Geographical Indications) in the territory of the Party of origin.” 11
The scope covers four main product ranges stem from territories of Parties: wines, spirits, agricultural products, and food. With respect to EU, that scope of application sets out clear legal frameworks on GIs protection of these four categories of products embodied in its Regulation (EU) No.1151/2012 on quality schemes for agricultural products and foodstuffs (Reg.1151/2012) 12 and Regulation.
(EU) No.1308/2013 establishing a common organization of the markets in agricultural products (Reg.1308/2013) 13 . As for Viet Nam, that provision has a narrower scope of protection in its Intellectual property Law (IP Law). Within domestic law, there has not been any specific mention of GI application for which product ranges; instead, Article 79 of IP Law2005, amended 2009 refers to goods in general. “Goods” is a term that may cover products in both agricultural and non-agricultural sectors.Moreover, the second sentence of Article 12.23 calls upon registration of GIs in compliance with Article 12.24 in the country of origin so as for it to be protected under the FTA. Normally, as set out in IPL VN, 2009, there is an established registration system for GIs in Vietnam to be recognized 14 . Thus, this provision could barely create any difficulty for Vietnam at least in terms of GI registration procedures.
(ii) Scope of protection:
Article 12.27 provides details on standards of bilateral protection of GIs between EU and Vietnam. In principles, once the GI is registered and consistent with protection listed in Annex 12 (List of GIs), it shall be protected against any acts of:
- Using the GI for any product class presented in Annex 12 either does not stem from the country of origin specified in Annex 12 for that GI or does stem from country of origin as such but was not produced or manufactured in accordance with the laws and regulations of the other Party that would apply if the product was consumed in the other Party or even where the true origin of the product is indicated or the GI is used in translation or accompanied by expressions such as “kind”, “type”, “style”, “imitation” or the like;
- Using any means in designation or presentation of a good that suggests it comes from a place other than the true place of origin in a misleading manner;
- Unfair competition under Article 10bis of the Paris Convention. In a broader sense, the “laws and regulations” as stipulated in this article may
also refer to the importing rules of the EU that are not only concerned about GI protection but also about the food safety, animal and plant health which extend in relation to the content of Chapter 6 on Technical Barriers to Trade (TBT) and Chapter 7 on Sanitary and Phytosanitary Measures (SPS). In the short term, this whole clause may be worrisome for Vietnam. However, in the longer term, the synchronized implementation of such comprehensive food security system shall ensure the competitive advantage of Vietnamese products bearing registered GIs in a scenario that they are in conformity with EU standard at least in terms of quality.
(iii) The relationship to trademarks:
According to article 12.30, trademarks with their name are similar to GIs but have been legally registered and protected before the date of entry into force of this Agreement, or before the date when the application of the GIs are filed with the competent authority will be protected.