20:14 (GMT +7) - Monday 21/05/2018

Vietnam Today

Put to one side

Released at: 22:14, 04/02/2018

Put to one side

Photo: VET Magazine

One significant aspect of the deal that may supersede the TPP is the removal of provisions relating to intellectual property.

by Mr. Tran Manh Hung & Mr. Duong Bao Trung (*) / (*)

At the APEC Summit 2017 held recently in Da Nang, the eleven countries remaining in the Trans-Pacific Partnership (TPP) took a significant step towards finalizing a new agreement, referred to as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
In the absence of a key player - the US - this new cross-border deal is reported to have largely incorporated the TPP but “suspended” certain intellectual property provisions, in the hope of reviving them when or if the US rejoins the agreement at some point in the future. Thus, according to Annex II of the TPP Ministerial Statement, the CPTPP is absent many intellectual property-related and drug-specific articles the US rigorously promoted when the original agreement was being negotiated. 
In light of the above, the following important issues in Chapter 18 of the TPP, which concern intellectual property, have been included on the list of suspended provisions in the CPTPP. 

Scope of patentable inventions 

Article 18.37 of the TPP required members extend patent protection to “new uses of a known product, new methods of using a known product, or new processes of using a known product.” This is reportedly one the points the US focused on during the TPP negotiations, to facilitate the protection of drugs invented by US pharmaceutical corporations. However, various countries, mostly developing ones, strongly opposed this approach. 

Copyright and patent term adjustment 

The TPP increased the duration of copyright protection to the life of the author plus 70 years, which is 20 more years than the Berne Convention (Article 18.63). Further, the TPP required signatories adjust the term of a patent to compensate for delays in the process of patent application (Article 18.46). For drug patents, the TPP also mandated members adjust the term of a patent to compensate for the unreasonable curtailment of the effective patent term as a result of the marketing approval process (Article 18.48). When negotiating the TPP, the US is said to have actively called for a longer duration of copyright protection and new statutory reforms that would effectively create longer patent terms and constrain the entry of generic drugs into TPP markets. 

Undisclosed tests or other data

Similar to Article 39.3 of the TRIPS Agreement, TPP members must protect undisclosed tests or other data that authorities obtain as a condition for granting marketing approval for a new drug. However, while TRIPS only generally requires members protect this against “unfair commercial use”, the TPP goes one step further and specifically mandates members forbid third parties from marketing the same or a similar product for at least five years from the date of marketing approval of the drug (Article 18.50). These protections are critical to drug research and sale, and were one of the key proposals some years back. Unfortunately, unless the US decides to join in the CPTPP in the future, this provision is unlikely to be revived.

Legal remedies and safe harbors 

One measure the US adopted to enforce copyright in the network environment is the Digital Millennium Copyright Act (DMCA), which vigorously deals with internet service providers by providing certain safe harbors and appropriate sanctions. The US, therefore, actively imposed similar DMCA standards into the TPP, as displayed in Article 18.82. However, a rigid application of these standards in developing countries was said to be impractical and ineffective. Hence, it was not surprising that this provision is to be suspended when the CPTPP comes into effect.

When the CPTPP enters into force, the TPP chapter on intellectual property will be remarkably different from the original text. That is not to say, however, that the impact of the CPTPP will be lessened, at least from a legal perspective. In fact, the remaining articles of the TPP will still be of significance to Vietnam. We believe that the CPTPP is still going to bring about fundamental changes to Vietnam’s intellectual property laws, which at the current time are considered nascent, ambiguous, and lacking in teeth when it comes to online enforcement. The original TPP guarantees transparency by asking member countries to endeavor to publish all IP-related administrative rulings; expands the scope of trademark protection to sound and scent marks; streamlines trademark and patent registration procedures and guarantees due process therein; and provides for more vigorous protection of copyrighted works in its signatories. These provisions will largely remain intact when the CPTPP’s official text is approved and takes effect. 

What to do from here? Technically speaking, the CPTPP has not yet come into effect. Member signatories are to undertake their own statutory process (ratification) to review the draft CPTPP before approval. Members, especially Japan, are pushing for a mid to late-2018 deadline for entry into force. The road to effectiveness is not risk-free and straightforward, however, as the upcoming elections in some countries (Malaysia and Mexico) may prevent the adoption of the CPTPP. 

For Vietnam, the CPTPP is expected to push fundamental legal reforms in the country, not just in intellectual property but also other areas of law. Therefore, the business and legal communities have been strongly pushing the government to ratify the CPTPP at the soonest possible time. The CPTPP will therefore likely be the focus of the government and the media in 2018. If the agreement goes through, it will be a widely celebrated event.

(*) Mr. Tran Manh Hung, Managing Principal & Director at BMVN International (a member of Baker & McKenzie International), & Mr. Duong Bao Trung, Associate at BMVN International

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