VZCZCXRO3382
RR RUEHCHI RUEHDT RUEHHM
DE RUEHHI #1212/01 1860745
ZNR UUUUU ZZH
R 050745Z JUL 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 5774
INFO RUEHHM/AMCONSUL HO CHI MINH 3322
RUEHBK/AMEMBASSY BANGKOK 5833
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 04 HANOI 001212 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EAP/MLS AND EB/TPP/IPE JBOGER 
STATE ALSO PASS USTR DBISBEE AND RBAE 
STATE ALSO PASS USPTO FOR JURBAN AND PFOWLER 
USDOC FOR 4430/MAC/AP/OPB/VLC/HPPHO 
AMEMBASSY BANGKOK FOR USPTO JNESS 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON BEXP PGOV VM
SUBJECT: IPR IN VIETNAM - STRONG GVN WILL BUT WEAK ENFORCEMENT 
 
 
HANOI 00001212  001.2 OF 004 
 
 
(U) This cable is sensitive but unclassified, not for Internet. 
 
REF: A) HCMC 681 B) 06 HANOI 2602 
 
¶1. (SBU) Summary:  During a June 19-20 visit, USTR Director for 
Intellectual Property and Innovation Rachel Bae met with Government 
of Vietnam (GVN) officials to discuss IPR issues relating to 
Vietnam's commitments under the U.S.-Vietnam Bilateral Trade 
Agreement (BTA) and Vietnam's accession to the World Trade 
Organization (WTO).  She pressed the Supreme People's Court to 
complete its draft circular providing criminal remedies for 
commercial scale piracy - a more than five-month overdue requirement 
to meet Vietnam's WTO commitments.  In a roundtable with government 
IPR agencies, officials reported progress on enforcement efforts, 
while noting that additional training and capacity building is 
needed for officials to understand fully Vietnam's new laws and 
obligations.  In separate meetings, IP right holders expressed 
optimism that the IPR environment is improving, and several detailed 
positively their cooperation with enforcement bodies.  Right holders 
did stress, however, that more IPR training is needed for all 
elements of the enforcement system, with some identifying training 
for court officials as a top priority.  GVN officials were 
enthusiastic about continuing to work with the United States to 
address enforcement concerns and are drafting an IPR action plan 
that they will share with the United States for input.  Enhanced 
bilateral engagement in the near future could yield significant 
improvements as Vietnam grapples with the challenges of implementing 
its many new IPR commitments.  End summary. 
 
¶2. (U) In conjunction with the June 19 Annual BTA Review in 
Washington, Office of the U.S. Trade Representative (USTR) Director 
for Intellectual Property and Innovation Rachel Bae met with GVN 
officials in Hanoi on June 19-20 to review and assess Vietnam's 
efforts to implement effectively its BTA and WTO Trade-Related 
Aspects of Intellectual Property Rights (TRIPS) obligations.  These 
discussions supplemented the talks in Washington, and were designed 
to engage directly the relevant GVN agencies responsible for 
implementing these commitments.  In addition to seeking a general 
assessment of the effectiveness of Vietnam's enforcement regime, Bae 
focused specifically on urging Vietnam to expedite its efforts to 
draft regulations providing for the availability of criminal 
remedies for cases of willful copyright and trademark infringement 
on a commercial scale, as well as to express U.S. concerns over 
ongoing piracy of U.S.-owned broadcast content. 
 
SUPREME PEOPLE'S COURT WILL REVISE DRAFT CRIMINAL CIRCULAR 
---------------------------------- ----------------------- 
 
¶3. (U) During a two hour discussion, Bae urged Supreme People's 
Court (SPC) Deputy Chief Justice Dang Quang Phuong, as the chief 
drafter, to act quickly to finalize a draft circular providing 
criminal remedies for commercial scale copyright and trademark 
infringement consistent with Vietnam's BTA and TRIPS obligations. 
Vietnam's criminal code currently lacks the legal provisions to 
cover the scope of copyright and trademark infringement included in 
Article 61 of the TRIPS Agreement, and both sides acknowledge that 
Vietnam must ultimately revise its criminal code.  In the short 
term, however, Bae pointed to commitments Vietnam's negotiators made 
during the WTO accession process which bound Vietnam to issue an 
Inter-Ministerial Circular instituting the necessary provisions in 
order to be TRIPS consistent upon WTO accession.  Despite extensive 
dialogue between USTR and the SPC, including multiple exchanges of 
specific draft language to include in the circular over the past 
year, it is now more than five months outstanding, Bae continued. 
 
 
¶4. (U) Expressing hope that the two sides can quickly resolve the 
outstanding issues, Bae raised several critical changes that Vietnam 
must make in the current draft circular's language to be TRIPS 
consistent.  First, the definition of piracy must be expanded to 
cover, at a minimum, preparing derivative works, broadcast of 
protected works and the use of public performances without 
authorization.  On the second key issue of defining commercial 
scale, Bae provided Deputy Chief Justice (DCJ) Phuong examples of 
how the United States and other countries in the region define this 
term.  Specifically, the definition of commercial scale used in the 
circular must in some way address the right holders' perspective and 
not be limited to the violators' perspective as it is in the current 
version.  Finally, Bae noted that the current draft does not clearly 
provide for the seizure and destruction of infringing elements. 
 
¶5. (U) DCJ Phuong thanked Bae for the examples of how other 
countries have met this important TRIPS requirement, and echoed her 
 
HANOI 00001212  002.2 OF 004 
 
 
interest in quickly making the necessary adjustments to make the 
circular BTA and TRIPS consistent.  Phuong highlighted the 
difficulties he has had in drafting this circular given the 
constraints of the current criminal code, but his comments clearly 
indicated he understood USTR's concerns and requirement that the GVN 
meet its obligations as soon as possible.  Moving to Bae's specific 
points, the Deputy Chief Justice noted that seizure and destruction 
of infringing elements is covered through a provision in the IP Law 
referring to articles in the civil and administrative codes covering 
this issue.  On the definition of commercial scale, he agreed to 
study the language other countries have used, and mentioned that 
Vietnam is considering revising the language from "for profit-making 
purpose" to for "economic gains."  On the issue of expanding the 
definition for piracy, Phuong maintained that it would be difficult 
to expand the definition of Article 131 of the Criminal Code for 
Copyright Infringement, but thought he might be able to resolve the 
issue through another part of the Code.    Ultimately, Phuong 
committed to rework the current draft (without specifying a 
timeframe) and sharing the new version with USTR for comment.  In 
conclusion, Bae thanked him, and encouraged him to fulfill this 
commitment as soon as possible. 
 
¶6. (SBU) In a later meeting with officials from the Ministry of 
Trade's Multilateral Trade Policy Department, negotiators involved 
with Vietnam's WTO accession explained that per Deputy USTR's June 4 
letter, the Ministry of Trade attempted to participate in Bae's 
meeting with DCJ Phuong, but their request was waved off.  Deputy 
Director General Luong Hoang Thai did report, however, that MOT 
requested the Prime Minister's office send a letter to the Supreme 
People's Court urging them to complete the criminal circular as soon 
as possible.  Additionally, Thai agreed that his office would follow 
up with the SPC again to request that they expedite the drafting 
process in accordance with the agreed terms. 
 
IP ENFORCEMENT ROUNDTABLE - GVN SAYING THE RIGHT THINGS 
-------------------------- ---------------------------- 
 
¶7. (U) In a session chaired by National Office of Intellectual 
Property (NOIP) Director General Tran Viet Hung, more than thirty 
representatives from seven ministries, including five of the six key 
enforcement bodies (the Economic Police were not present), updated 
Bae on Vietnam's progress in implementing its new IP legal 
framework, recently expanded through a spate of new guiding 
regulations for the 2005 IP Law.  DG Hung, in his opening review of 
recent and upcoming activities, noted that Vietnam is still in the 
process of developing an independent assessment body to rule on 
alleged cases of IP infringement.  He also listed a number of 
regulations that Vietnam is currently drafting to complete its BTA 
and TRIPS requirements, including a new circular by the Ministry of 
Justice on administrative penalties and the SPC criminal circular on 
trademark and copyright infringement.  The GVN agencies assessed 
that, notwithstanding a few outstanding regulations, Vietnam has 
largely met its BTA and WTO commitments.  In a discussion on the 
criminal, civil and administrative systems, the GVN representatives 
acknowledged that more work was required on the criminal legal 
framework, including redrafting the criminal code.  While right 
holders still predominantly rely on administrative measures to seek 
redress for IP violations, Vietnam issued new guiding documents on 
civil remedies designed to make that a more user-friendly system. 
 
¶8. (U) Bae registered her appreciation for the GVN's hard work and 
cooperation on IP issues, including the extensive data provided as 
part of the Special 301 process.  She continued by saying that the 
draft criminal circular must be finished soon, as it is important 
that the criminal, civil and administrative systems all be strong 
independently.  On the administrative system, Bae flagged as an 
issue a new requirement that right holders must issue a cease and 
desist letter to infringers before enforcement agencies will take 
action (see Reftel A).  Based on feedback from right holders, this 
system is not working and serves to "tip off" violators, Bae 
continued.  She also noted that the existence of six enforcement 
agencies is both a strength and a weakness in the Vietnamese system, 
as it can be confusing for right holders to determine which agency 
is responsible for a specific issue.  Director General Hung 
responded to this point by stating that the Ministry of Trade's 
(MOT) Market Management Board now chairs an inter-agency "Committee 
127" to coordinate enforcement efforts among the various agencies. 
 
¶9. (U) In response to Bae's query, DG Hung noted that Vietnam does 
not yet plan to join the WIPO Internet Treaties.  He continued by 
noting that Vietnam may consider this in future, but they are now 
focused on increasing knowledge and awareness of IP in the Internet 
environment.  Hung also pointed out that U.S. right holders are 
 
HANOI 00001212  003.2 OF 004 
 
 
protected under Vietnam's IP Law (as, under the WTO, they are 
accorded national treatment). 
 
¶10. (SBU) MOT's Market Management Board Deputy Director Nguyen Manh 
Hung noted the acute training needs for his agency, which has more 
than 5000 employees nationwide.  He noted his interest in further 
cooperation with the United States on IP enforcement technical 
assistance.  In response to these requests, Bae noted U.S. interest 
in working with Vietnam to develop and implement an action plan for 
the two sides to further cooperate with an aim of ultimately 
removing Vietnam from the Special 301 Watch list.  NOIP agreed to 
take the lead on behalf of the GVN and will draft a list of items 
they would like to include in such an action plan. 
 
SIGNAL PIRACY - SIGNIFICANT PROGRESS 
------------------------------------ 
 
¶11. (SBU) As part of the IPR roundtable, Bae raised continuing U.S. 
concerns that the GVN has not taken sufficient enforcement actions 
to stop the serious problem of signal piracy by the State-owned 
digital terrestrial broadcaster, the Vietnam Television Technology 
Investment and Development Company (VTC).  Despite frequent requests 
over the past several years by U.S. industry and Post, VTC has 
continued its egregious use of U.S.-owned broadcast content without 
a license (see reftel B for additional background on VTC and signal 
piracy in Vietnam).  Following increased pressure in recent months, 
VTC removed HBO and CNN from its channel lineup in early June. 
Following the roundtable, a Ministry of Posts and Telematics 
official reported that the remaining (four) U.S. channels were also 
removed.  Recent audits confirm that three of the four remaining 
channels have indeed been removed, but VTC continues to pirate MTV 
Asia.  USTR and Post will continue to work with U.S. industry to 
ensure a complete cessation of pirating activities. 
 
RIGHT HOLDERS OPTIMISTIC BUT ENFORCEMENT REMAINS WEAK 
------------------------ ------------------------------ 
 
¶12. (SBU) In a series of separate meetings, U.S. and Vietnamese 
right holders and right holders' representatives described with some 
optimism their experiences with IP enforcement in Vietnam.  Unilever 
Vietnam's Vice President of Corporate Relations Mr. Tran Vu Hoai 
noted his firm's positive cooperation with enforcement agencies, 
with the caveat that Unilever has adopted a very proactive approach 
to reduce counterfeit goods in the market, including educating local 
police and enforcement officials.  He speculated, however, that 
small companies without the resources to dedicate to such efforts 
may have a different experience.  The Vietnam Intellectual Property 
Association (VIPA), a collection of firms and individuals interested 
in promoting IP enforcement in Vietnam, opined that judges and court 
officials, in particular, need additional training on IP 
regulations, characterizing them as "ineffective due to a shortage 
of expertise."  Ideally, VIPA would like for Vietnam to create an 
IP-focused court. 
 
¶13. (U) Several law firms representing right holders here raised 
concerns over the administrative requirement for a cease and desist 
letter.  One lawyer noted that the Decree only requires the letter 
for trademark infringement cases (and not for trademark 
counterfeiting), but GVN authorities have misinterpreted this and 
are demanding a letter for all cases of accused infringement.  While 
one firm was optimistic that recent changes to the civil system 
would lead to an increased use of civil remedies, another noted that 
right holders continue to be hesitant to use this system due to the 
potentially costly proceedings and the uncertain outcome from 
inexperienced courts.  Each of the law firms agreed that enforcement 
here is improving, but much more training is needed to address the 
dearth of expertise and experience among IP enforcement agents. 
 
COMMENT 
------- 
 
¶14. (SBU) All of the government agencies present were clearly 
engaged and dedicated to improving IP enforcement in Vietnam.  One 
consistent message from all of them was the need for more training 
to improve their officials' capacity and understanding of the new 
laws.  GVN officials also consistently expressed a commitment and 
desire to improve IPR enforcement here.  They openly recognized that 
a lack of experience and expertise among their personnel constitutes 
a major hindrance to creating a better environment for foreign and 
domestic right holders.  With that in mind, there is strong interest 
on the part of the GVN to enhance and expand bilateral cooperation 
and technical assistance.  This is a critical time as Vietnam 
finalizes its legal regime and increasingly focuses on 
 
HANOI 00001212  004.2 OF 004 
 
 
implementation.  Enhanced engagement by the United States, through 
the action plan that NOIP has agreed to draft and under the Trade 
and Investment Framework Agreement (TIFA), stands to yield 
significant improvements. 
 
¶15. (U) USTR Director for Intellectual Property and Innovation 
Rachel Bae cleared this cable. 
 
 
MARINE