VIETNAM WORKS TO STRENGTHEN IPR ENFORCEMENT

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SENSITIVE
SIPDIS

STATE FOR EAP/MLS AND EEB/TPP/IPE JURBAN
STATE FOR EEB/TPP/IPE FOR HALLOCK, WATTS, AND KEAT
STATE ALSO PASS USTR DBISBEE AND RBAE
4430/MAC/AP/OPB/VLC/HPPHO

E.O. 12958: N/A
TAGS: ECON KIPR EAID ETRD VM
SUBJECT: VIETNAM WORKS TO STRENGTHEN IPR ENFORCEMENT

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1. (U) Summary: Vietnam continues to make progress in
strengthening efforts and capacity to protect intellectual property
rights (IPR). Although IPR enforcement in Vietnam remains weak and
piracy is extensive, the Government of Vietnam (GVN) continues to
take significant steps to bolster its enforcement record, including
taking an active role in addressing broadcast cable signal theft and
internet piracy, and cracking down on the sale of pirated and
counterfeit goods at the retail level. Vietnam is also continuing
to take steps to upgrade its IPR legal framework, including revising
the criminal code to update its IPR-related provisions, undertaking
additional efforts to advance software copyright protection, and
improving the responsiveness of Vietnam's primary IPR enforcement
agency, Market Watch. End summary.

IMPROVING IPR LEGAL INSTRUMENTS & ENFORCEMENT
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2. (U) Two years after joining the World Trade Organization, Vietnam
is continuing its efforts to develop a modern IPR legal regime and
meet its obligations under the Trade-Related Aspects of Intellectual
Property Rights (TRIPs). Last week, Prime Minister Nguyen Tan Dung
ordered his government to implement a detailed plan to control
copyright protection in Vietnam. The PM instructed the Ministries
of Culture, Finance, and Industry and Trade to increase copyright
protection in Vietnam's business and service sectors, prevent the
import and export of items that violate copyright laws, particularly
optical discs, and introduce "strict punishment" for organizations
and individuals that circulate pirated goods. Additionally, the
decree orders all Vietnamese universities and professional schools
to introduce lectures on intellectual property rights.


3. (U) Recently, Vietnamese authorities have conducted increasing
numbers of raids against sellers of pirated and counterfeit goods,
including fake pharmaceuticals, alcohol, cosmetics, gas, fertilizer,
motorbikes, electronics and software. In one widely covered
crackdown, authorities conducted raids on groups selling counterfeit
fertilizer, which emerged recently as a significant problem for
Vietnamese farmers. In another instance, police in central Nghe An
Province confiscated more than 200 motorbikes with infringing
trademarks, including those of Honda's Future Neo and Wave Alpha
scooters. Last week, the Market Management Department (Market
Watch),an IPR enforcement agency under the Ministry of Industry and
Trade, seized 10 tons of smuggled counterfeit and pirated consumer
goods worth an estimated $40,000 from several trucks in northern Bac
Giang Province. It also seized one hundred thousand pirated compact
discs from a shop in Ho Chi Minh City. Authorities said the owner
supplied the discs to a number of other local shops throughout the
city. The National Office of Intellectual Property (NOIP) said
total fines for IPR infringement in 2008 reached 255 million VND
($14,500).

FIGHTING CABLE TV & INTERNET PIRACY
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4. (U) The GVN has also taken strides to reduce cable-TV signal
piracy, which used to be a significant problem in Vietnam. VTC, the
state-owned digital terrestrial cable company, ceased broadcast of
unlicensed content earlier in 2008 after engagement by rights
holders and the USG. The Cable & Satellite Broadcasting Association
of Asia (CASBAA) has commended Vietnam for its progress in
strengthening IPR protection for broadcasters. Even so, pay TV
signal theft remains a problem here, perpetrated mostly by small
cable TV operators.


5. (U) The GVN is also beginning to tackle internet piracy. After
complaints by the Embassy and the Office of the U.S. Trade
Representative, the Copyright Office of Vietnam and the NOIP
reportedly fined national internet service provider FPT and four
other Vietnamese internet sites a total of 20 million VND ($1,150)
and ordered the companies to remove pirated content (mostly Time
Warner movies) from their websites. Both the Copyright Office and
NOIP have reiterated to the USTR their desire to have U.S. rights
holders proactively avail themselves of the administrative processes
in place in Vietnam.

TACKLING SOFTWARE PIRACY
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6. (U) In August 2008, the Ministry of Culture, Sports and Tourism
(MOCST),the Vietnam Software Association (VINASA) and the Business
Software Alliance (BSA) joined forces to create the "Partnership in
Protection of Software Copyrights." The new partnership aims to
decrease software piracy via public awareness campaigns, inspections
and stricter penalties for violations. To spread the message, the
Partnership has been running public service announcements in several

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of Vietnam's largest print and online newspapers, warning against
software piracy.


7. (U) Authorities backed up the public awareness campaign with a
crackdown on violators: in late 2008, MOCST and MPS inspectors
conducted multiple raids, discovering pirated software running on
1200 computers in six provinces. In one such raid in December,
authorities raided a French-invested architecture firm, NKB-archi
Vietnam, where they discovered unlicensed software, including
Microsoft Office, Windows XP, and Symantec Antivirus running on
dozens of computers.

IMPROVING DATA PROTECTION
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8. (U) Vietnam also demonstrated a willingness to modify its IPR
legal regime for data protection. Under previous rules, the Drug
Administration of Vietnam (DAV) did not extend automatic test data
protection to new drugs entering the Vietnamese market. Rather,
pharmaceutical companies were required to request data protection
upon registration of their drug and then await a lengthy review.
After urging by the USTR and U.S. industry, the DAV agreed to modify
their internal procedure. In December 2008, after approval by the
Minister of Health, DAV announced it would extend automatic data
protection to new drugs.

CREATING A MORE RESPONSIVE BUREAUCRACY
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9. (U) On October 22, 2008, MOIT issued Circular No. 12, which
specifies a shortened time for Market Watch to respond to rights
holders' complaints and carry out raids on retailers selling
counterfeit and pirated goods. In the past, rights holders often
waited months for Market Watch to reply. The new law requires the
agency to respond within 10 days and conduct raids within 60 days
(90 days for "complex cases"). If the case involves serious
"criminal elements," Market Watch must refer the case to the
Ministry of Public Security (MPS) for further investigation.

IPR TECHNICAL ASSISTANCE
--------------


10. (U) Enforcing IP law in Vietnam is complicated by a lack of
understanding among retailers of their legal obligations and the
economic impact upon the IP owners from the sale of pirated or
counterfeit goods. This is not necessarily limited to small
mom-and-pop establishments; Market Watch officials tell us that some
of Vietnam's largest retailers routinely peddle infringing goods.
To combat this problem, Post is engaging with Market Watch to
develop two thousand copies of an IPR Outreach booklet. Authorities
will distribute the booklet, likely in March, to retailers and
consumers in areas with high rates of infringing goods. The booklet
describes how to identify a fake or pirated good, explains the legal
and economic consequences of peddling such wares, suggests locations
where vendors can obtain legitimate goods for sale, and notes why IP
protection is important to Vietnam and its citizens. EEB and Post
money is funding this effort. Post also hopes to offer the GVN
technical capacity training in FY09 to improve IPR enforcement.

COMMENT
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11. (U) Despite the recent crackdown, IPR enforcement in Vietnam
remains weak and violations rampant. DVD and CD piracy rates remain
at or above 90 percent. Yet, Vietnam's continued efforts to
integrate into the global economy and improve trade relations
further with the United States have motivated the GVN to make
fulfillment of its IPR commitments a priority. The U.S. Government
enjoys a robust and productive dialogue on IP issues with the GVN.
We have cultivated an open exchange of information and ideas with a
wide range of IP-related government agencies, and continue to build
on that relationship through our bilateral engagement and technical
assistance programs.


12. (SBU) Comment continued: The GVN's strong desire to fulfill its
international obligations and protect the rights of a growing and
creative private sector, in combination with its desire to gain
eligibility to the U.S. GSP preference program and remove itself
from the U.S. Special 301 Watch List, have supported increased IP
enforcement efforts in 2008. We expect those efforts to accelerate
in 2009. The progress made in cooperation on advancing and
protecting IP rights has also fostered closer bilateral relations
with law enforcement agencies and contributed to helping Vietnam's
legal system become a more predictable and reliable venue to seek
recourse and address wrongs. We believe that continued robust

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engagement with the GVN on IPR matters will reap rewards not only
for U.S. rights holders, but also advance our broader rule of law
agenda.


13. (U) This message was coordinated with Ho Chi Minh City.

MICHALAK