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