PM DZUNG INSTRUCTS GVN AGENCIES TO PURCHASE COPYRIGHTED

UNCLAS SECTION 01 OF 02 HANOI 000425

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS AND EB/TPP/IPE JBOGER
STATE ALSO PASS USTR JCHOE-GROVES AND DBISBEE
AMEMBASSY BANGKOK FOR USPTO JNESS
USDOC FOR ITA/MAC/OIPR CPETERS AND 4430/MAC/AP/OPB/VLC/HPPHO

E.O. 12958: N/A
TAGS: ETRD KIPR ECON WTRO VM
SUBJECT: PM DZUNG INSTRUCTS GVN AGENCIES TO PURCHASE COPYRIGHTED
SOFTWARE

REF: (A) HANOI 308 (B) HANOI 309 (C) Hanoi 310

HANOI 00000425 001.2 OF 002



1. (SBU) Summary: On February 22, Prime Minister Nguyen Tan Dzung
issued Instruction No. 04/2007/CT-TTg calling on government agencies
to strengthen software copyright protection in compliance with
Vietnam's international copyright protection commitments. This new
policy delegates specific responsibilities for software copyright
protection among no fewer than nine Government of Vietnam (GVN)
ministries. Perhaps most important, the Instruction compels all
government ministries and provincial administrations to purchase
copyrighted software for use by their employees. Many questions
about how this policy will be implemented, however, remain. Without
adequate budget resources, political will and the designation of a
properly-empowered oversight authority, Instruction 04/2007 risks
falling short of its intended goals. End Summary.

Positive Steps on Copyright Protection in Vietnam
-------------- --------------


2. (U) On February 22, Prime Minister Nguyen Tan Dzung issued
Instruction No. 04/2007/CT-TTg calling for government agencies to
strengthen software copyright protection. This announcement comes
closely on the heels of Vietnam's accession to the World Trade
Organization (WTO) and calls for government ministries and agencies
as well as provincial and city People's Committees to implement
Vietnam's domestic and international commitments on software
copyright protection. Instruction 04/2007 tasks the heads of each
agency (i.e. Ministers and People's Committee Chairmen) with direct
responsibility for rooting out the rampant use of pirated software
in their respective organizations. Software piracy among Government
of Vietnam (GVN) agencies has been a contentious issue for foreign
software industries and an area of focus for this Mission (reftel
A).


3. (U) Instruction 04/2007 also includes a detailed outline of
broader responsibilities for ensuring software copyright protection
in Vietnam among no fewer than nine ministries. Notably, the
Instruction calls for increased enforcement efforts and an expanded
public outreach and education strategy. The Deputy Director for
International Cooperation in the National Office of Intellectual
Property (NOIP),Mr. Mai Van Son, noted that Vietnam's recent steps
to strengthen the IP legal regime (reftels A and B) should help to
increase the effectiveness of this new policy.

Where's the Money?
--------------


4. (SBU) Significantly, Instruction 04/2007, which was drafted by
the Ministry of Culture and Information's Copyright Office of
Vietnam (COV),calls on the Ministry of Finance (MOF) and Ministry
of Planning and Investment (MPI) to provide state budget resources
and guidance to facilitate government agencies' efforts to purchase
legitimate copies of business software. (Note: In 2006, the MOF was
the first major government agency to move towards the legal use of
software when it purchased 15,000 Microsoft Office copyrights. We
understand that the Ministry of Posts and Telematics also intends to
sign an agreement with Microsoft pledging to use only licensed
software. End note.) With software piracy rates estimated to range
between 85 and 92 percent, some projections show that the total cost
for purchasing software copyrights for the two million government
employees will be approximately USD 1 billion. The cost for all
Vietnamese computer users, including private firms and households,
to legitimize their software products ranges closer to USD 5-6
billion.


5. (SBU) In a March 1 meeting, Mr. To Van Long, Director of COV's
Copyright Management Division, said that the GVN has no formal
estimates for the cost of this effort. According to Mr. Long, each
ministry and provincial People's Committee is responsible for
submitting a budget proposal to MPI and MOF to implement this new
directive. No deadline has been set for this process, and it is
uncertain which agency or agencies will be tasked with ensuring that
all GVN bodies submit budget requests in a timely manner.
Recognizing the costs involved with this effort, Long hopes that
foreign software providers will "work with Vietnam to reach an
affordable price and package" to enable it to address the software
copyright problem.

Hurdles to Practical Implementation
--------------

HANOI 00000425 002.2 OF 002




6. (SBU) The ability to implement this new directive in the near
future may be hampered by the recently-promulgated government IT
procurement policy, outlined in the 2006 Decisions 169 and 223
(reftel C),which creates preferences for domestic IT producers. In
order for GVN agencies and ministries to purchase foreign IT
products, including software, they must submit detailed dossiers
explaining why a foreign provider was selected over a local
provider. This lengthy administrative process may prolong GVN
agency efforts to purchase legitimate software and could prohibit
serious efforts to conclude legal licensing agreements with foreign
software producers. Econoff noted that the COV could be an
important voice in pushing for revisions to this government
procurement policy to ensure that it does not unnecessarily hinder
implementation of this new Instruction.


7. (SBU) It is also unclear how the GVN will monitor compliance with
Instruction 04/2007, or if the COV or another enforcement agency
will be empowered to inspect or audit implementation among other GVN
agencies. COV's Long said that the Ministry of Culture and
Information's (MOCI) Inspectorate has the expertise and authority,
and is therefore best positioned to conduct such inspections. When
pressed on the feasibility of the MOCI Inspectorate sanctioning
other, perhaps more influential, government ministries, Long
implored the USG to understand that this would be a "step-by-step"
process.

Comment
--------------


8. (SBU) Instruction 04/2007 is a welcome development that
demonstrates Vietnam's commitment to uphold its obligations under
the WTO TRIPS agreement. Given some of the potential obstacles
outlined above, however, it will take some time to assess the real
impact of this policy. Without adequate budget resources, political
will and the designation of a properly-empowered oversight
authority, Instruction 04 risks falling short of its intended goals.
It will be important for the GVN to take the lead in following
through, as private firms and households will be unlikely to act
until the government first takes action.

MARINE