VZCZCXRO5171
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHHI #0032/01 0130101
ZNR UUUUU ZZH
R 130101Z JAN 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 9001
INFO RUEHHM/AMCONSUL HO CHI MINH 5469
RUCNASE/ASEAN MEMBER COLLECTIVE
RHHMUNA/USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 HANOI 000032 
 
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 
 
HANOI 00000032  001.2 OF 003 
 
 
¶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 
--------------------------------------------- 
 
¶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 
----------------------------------- 
 
¶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 
------------------------ 
 
¶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 
 
HANOI 00000032  002.2 OF 003 
 
 
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 
------------------------- 
 
¶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 
-------------------------------------- 
 
¶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 
------- 
 
¶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 
 
HANOI 00000032  003.2 OF 003 
 
 
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