INTELLECTUAL PROPERTY AS REGULATIONS OF THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (RCEP) AND IMPLEMENTATION PROSPECT FOR VIETNAM, THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT, RCEP, IMPLEMENTATION PROSPECT FOR VIETNAM, INTELLECTUAL PROPERTY AS REGULATIONS OF THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT

Intellectual Property As Regulations Of The Regional Comprehensive Economic Partnership Agreement (RCEP) And Implementation Prospect For Vietnam

I. SUMMARY

The Regional Comprehensive Economic Partnership (hereinafter referred to as “RCEP”) is a free trade agreement between the countries of the Association of Southeast Asian Nations (ASEAN) and Australia, China, Japan, Korea, New Zealand. RCEP promises to create the necessary momentum to recover for businesses and people in the region, especially amid the crisis caused by the current COVID-19 pandemic. With the aim of opening up the prospect of cooperation and investment between countries, RCEP has introduced regulations aimed at minimizing impacts and obstacles to trade and investment. In which, the establishment, use, protection, and full and effective enforcement of intellectual property rights (hereinafter referred to as “IP”), mentioned in Chapter 11, is also considered among the important ways to realize the common goal of the Agreement. In this article, the author mentions the main contents surrounding the IP regulations of RCEP, as well as challenges and opportunities for Vietnam as a member state of the Agreement.

Keywords: RCEP, the importance of RCEP, intellectual property in RCEP, intellectual property.

II. QUESTION

Negotiations under the RCEP framework began with 16 countries including 10 countries of ASEAN, China, Japan, India, South Korea, Australia, and New Zealand. Even if India pulled out in 2019, it would still be the largest deal in the world with an estimated 30% of GDP and more than 27% of global merchandise trade. This is also the first free trade agreement between the Asian economic powerhouses including Korea, Japan, and China.

Driven especially by China, the RCEP trade bloc has become prominent in global trade and investment, outpacing the growth rate of large high-income trade blocs in recent years. Once approved, RCEP will create favorable conditions for trade development with commitments on market opening in the fields of goods, services, and investment, harmonizing rules of origin, simplifying customs procedures.

As the US-China trade dispute and the COVID-19 pandemic continue to put a strain on the global supply chain, RCEP is expected to create the necessary momentum for companies to recover through deepening their trade relations between countries. In addition, RCEP also helps facilitate the promotion of countries with small economies in the region and reduces the development gap between ASEAN members.

RCEP consists of 20 chapters and annexes, which is a comprehensive agreement in both scope and depth of commitments. In addition to the general provisions in Chapter 1 and Chapter 20, the main content of the Agreement is the provisions related to trade in goods (Chapter 2); rules of origin (Chapter 3); customs procedures and trade facilitation (Chapter 4); sanitary and phytosanitary measures (Chapter 5); standards, technical regulations, and conformity assessment procedures (Chapter 6); trade remedies (Chapter 7); trade in services (Chapter 8); temporary movement of natural persons (Chapter 9); investment (Chapter 10); intellectual property (Chapter 11); electronic commerce (Chapter 12); competition (Chapter 13); small and medium enterprises (Chapter 14); economic and technical cooperation (Chapter 15); government procurement (Chapter 16); and areas of legal institutions and dispute resolution (Chapters 17-19). In addition, the Agreement is accompanied by a list of member-specific transition periods and technical assistance requirements.

In Chapter 11, the protection and enforcement of IPRs were mentioned as a measure to reduce barriers and difficulties in trade and investment. With the development of globalization, technology and innovation have become the leading important factors determining the comparative advantage and competitiveness of countries and regions in the market. As a result, the protection of intellectual property on an international scale has become a global issue. As the world’s largest free trade agreement, RCEP is no exception to this trend.

Specifically, in addition to the basic principles that have been strictly followed, Chapter 11 of the RCEP has its unique character, with the prominent feature of focusing more on the balance between rights and obligations to prevent the abuse of intellectual property rights. This chapter covers many aspects related to IP such as copyrights, trademarks, geographical indications, patents, industrial designs, genetic resources, traditional and folklore knowledge, domain names. The Chapter also encourages Parties to accede to international IPR Conventions, as well as reaffirms the right to use flexible measures recognized in the Doha Declaration on TRIPS Agreement and Public Health, and also includes provisions relating to Genetic Resources, Traditional Knowledge, and Folklore.

Basically, Chapter 11 of the RCEP builds on the WTO and the TRIPS Agreement. The IP commitments in the RCEP are comprehensive and at a higher level than those in other ASEAN Agreements (eg the ASEAN+1 Agreements).

However, instead of putting pressure to upgrade the system of protection and enforcement of intellectual property rights for members to a new level, requiring members to exchange benefits in negotiation, IP in RCEP is built according to the mechanism based on the IP foundation, the level and the inherent superstructure of the member countries. Accordingly, the commitments in this chapter are not a big IP challenge for Vietnam because, in fact, our country has been and continues to internalize commitments in the next generation of free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union–Vietnam Free Trade Agreement (EVFTA).

III. KEY CONTENTS OF IP AND IPR ENFORCEMENT IN RCEP

3.1 RCEP offers a balanced and comprehensive approach to the protection and enforcement of intellectual property rights

One of the most notable points in Chapter 11 on IP of RCEP is the introduction of a balanced and comprehensive approach to the protection and enforcement of IP rights in the region. Right at the very first article of the Chapter, the protection and enforcement of intellectual property rights must contribute to promoting innovation, technology transfer and dissemination, for the mutual benefit between manufacturers and knowledge users, as well as in ways conducive to social and economic well-being. Thereby, RCEP requires members to take appropriate measures to prevent rights holders from abusing intellectual property rights or using practices that unreasonably restrict trade or adversely affect international technology transfer.

In particular, the enforcement section of the Chapter requires that these procedures be applied in a manner that avoids creating barriers to lawful trade and provides a safeguard against their abuse. Basically, RCEP is committed to harmonizing the level of protection and enforcement of IPRs based on the provisions of the TRIPS Agreement. However, although the principle of balance of interests was enshrined in the TRIPS Agreement, its function was diminished as some developed countries wanted to maintain their competitive position. Especially when a number of RCEP member countries are also signatories to other bilateral and multilateral agreements which requires a high and challenging level of enforcement and rights protection for owners. Hence, RCEP is trying to change this situation by appropriately emphasizing the meaning of fair use, technology transfer, and socioeconomic well-being in the international community.

3.2 RCEP in relation to the TRIPS agreement

It is easy to see that the content of TRIPS has been used by RCEP in the IP Regulation Chapter. For example, under the headings ‘Objectives’ and ‘Principles’ of the IP Chapter, RCEP mainly borrows the text of Articles 7 and 8 of the TRIPS Agreement. In principle, RCEP seems to assume all the tradeoffs and flexibility incorporated in TRIPS. RCEP also recognizes the Doha Declaration on the TRIPS Agreement and Public Health, and the Parties confirm the use of flexible capabilities to promote public health. This is also consistent with the provisions contained in the RCEP Preamble, whereby the Parties recognize that appropriate forms of flexibility are needed based on the level of development between the Parties. RCEP also provides that in the event of a conflict between the provisions of this treaty and TRIPS, the provision of TRIPS shall prevail.

In addition, a new feature of RCEP lies in a more flexible provision regarding exceptions and limitations to copyright. After reiterating the applicable principle of the Three-Step Test (an important principle in TRIPS), Article 11.18 of the RCEP provides that:

“3. Each Party shall endeavor to provide an appropriate balance in its copyright and related rights system, among other things by means of limitations and exceptions consistent with paragraph 1, for legitimate purposes, which may include education, research, criticism, comment, news reporting, and facilitating access to published works for persons who are blind, visually impaired, or otherwise, print disabled.

4. For greater certainty, a Party may adopt or maintain limitations or exceptions to the rights referred to in paragraph 1 for fair use, as long as any such limitation or exception is confined as stated in paragraph.”

Furthermore, RCEP acknowledges that fair use restrictions and exceptions may be compatible with the TRIPS three-step test (which is different from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)).

Besides, RCEP also has a difference when stipulating that in some cases, the language used in some provisions can be interpreted in a limited way, narrowing the flexibility of TRIPS. For example, Article 11.38 on exceptions to patent rights provides limited exceptions to exclusivity as long as the exceptions do not unreasonably conflict with normal exploitation by inventing. The above provisions are similar to Article 30 of the TRIPS agreement. This shows that this provision does not restrict any kind of exception. In addition, Article 11.40 covers the experimental use of inventions. The inclusion of an exception to patent trial use is a remarkable step as previous agreements such as the CPTPP have failed to reach a consensus.

3.3 RCEP in relation to CPTPP

With regard to IPR, both the CPTPP and the RCEP have chapters on the subject. However, these two agreements have significant differences, stemming from the influence of the US and China in the CPTPP and RCEP agreements, respectively. RCEP is known to be China’s first multilateral agreement and it follows the phase one Trade deal between the US and China. Compared to the CPTPP, RCEP’s IP rules are only more or less supplementary than what many RCEP members already have.

Another point worth noting is the inclusion of the suspended CPTPP provisions in the RCEP. For example, the CPTPP provision is suspended for the Rights Protection Technology Measures included in the RCEP. The only difference is that the RCEP does not explicitly criminalize the fraud of Rights Protection Technology Measures as an offense, regardless of the existence of piracy. In addition, RCEP provides the freedom to define the scope of the Rights Protection Technology Measures and their respective limitations and exceptions.

3. 4. Technological protection and enforcement measures in the digital environment, international rules for the protection of genetic resources in RCEP

Although it is stated that the TRIPS Agreement shall take precedence in the event of any inconsistency between RCEP and TRIPS, in practice, RCEP contains commitments not covered by TRIPS or above the TRIPS standards. Specifically, the RCEP sets out provisions relating to technology protection and enforcement measures in the digital environment. In addition, the Chapter also provides provisions on criminal sanctions, helping to clarify the obligations on the enforcement of rights by criminal means in the TRIPS Agreement.

On the issue of technology protection, the parties should provide adequate protection and put in place effective sanctions to deal with interference with effective technological measures that copyright holders, related rights have been used to exercise their rights as well as to prevent acts that are beyond their permission and of the law. On the issue of enforcement in the digital environment, RCEP asserts that civil and criminal remedies should also be applied to the same extent in this environment for infringements of copyright or other related rights and trademark. These are noteworthy points, showing that the legal system is catching up with the global development trend.

Regarding criminal sanctions, in Subsection 4 of Section J, the Chapter sets forth the requirements for criminal procedures and penalties for illegal copying of copyrighted works and importation, trade in counterfeit goods. In particular, the need for criminal prosecution for illegal copying of cinematographic works on a commercial scale was also mentioned. This regulation can be seen as a positive step forward in the enforcement of copyright and related rights in the current digital age.

Another important point in the IP chapter of RCEP is that Section G has been dedicated to setting out international rules for the protection of genetic resources, traditional knowledge, and folklore. In this section, RCEP requires each party to establish appropriate measures to protect the above subjects. This is the first time these issues have been addressed in the IP chapter of a trade agreement. This marks significant progress in the field of international IPR protection, with regard to the core interests of developing countries, which are rich in genetic resources and cultural traditions, but lacks industrial assets, such as pharmaceutical patents, industrial designs, or trade secrets.

3.5 RCEP sets out requirements to improve procedures related to Intellectual Property

Just like the CPTPP or EVFTA agreements where members are always required to improve procedures related to intellectual property, RCEP also offers similar content. The RCEP Agreement requires member countries to continue to review and make efforts to improve administrative procedures on IP rights.

In terms of requirements, issues related to streamlining the procedural requirements for patents, industrial designs, and trademarks were noted. In particular, the parties must endeavor to streamline any procedural requirements relating to certification of translations or confirmation of signatures in applications establishing rights for these subjects. In addition, the Chapter also mentions regulations that require parties to be transparent in the procedures for establishing and enforcing industrial property rights.

In terms of modalities, it is also advisable to organize an online system for filing and processing patent, industrial design, and trademark applications. Accordingly, the disclosure of data to an online system for all steps from application submission to final results to procedures for establishing rights, objections, requests for cancellation/termination, or maintaining legality are promoted, in order to create a transparent and easily accessible legal environment for rights holders.

INTELLECTUAL PROPERTY AS REGULATIONS OF THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (RCEP) AND IMPLEMENTATION PROSPECT FOR VIETNAM. Source: TTXVN
INTELLECTUAL PROPERTY AS REGULATIONS OF THE REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (RCEP) AND IMPLEMENTATION PROSPECT FOR VIETNAM. Source: TTXVN

With these regulations, RCEP has committed to creating more favorable conditions for IPR holders with the aim of attracting stable and long-term investment from outside, including partner countries, into the ASEAN market in general and Vietnam in particular. Barriers will be removed when the protection of IP rights of foreign investors has been carried out in a simpler and more convenient way thanks to the simplification of procedures both in terms of requirements and procedures.

The above commitments put pressure on Vietnamese state agencies, specifically the National Office of Intellectual Property, to upgrade the data system and data portal to meet the requirements from RCEP, although this requirement has been set out in the CPTPP and EVFTA agreements that Vietnam has signed.

3.6 RCEP provides regulations that balance the legitimate interests of rights holders with the interests of users and the community

Not only that but Chapter 11 also contains provisions to balance the legitimate interests of the right holder with the interests of users and the community. Accordingly, RCEP reaffirms the Doha Declaration on the TRIPS Agreement and Public Health adopted on November 14, 2001. In the context of the current COVID-19 pandemic, these regulations are extremely necessary, helping to strengthen the human values ​​of international treaties in general and RCEP in particular, thereby contributing to creating equality between individuals in terms of the right to reasonable access to medicines.

It can be seen that RCEP is an Agreement that upholds the spirit of international cooperation. Unlike other regional trade agreements that force other members to accept strict and high standard IPR protection provisions, RCEP has adopted a more moderate approach to increasing the use and IP protection through cooperation.

Recognizing the significant capacity differences among stakeholders, RCEP requires each party to cooperate and engage in dialogue to facilitate the effective implementation of its IP chapter. This vision is embodied in Section K on Cooperation and Consultation, as well as Section M on Transition Periods and Technical Assistance. In particular, the attached annex clearly lists technical support requirements for certain countries. For example, in Appendix 11B, Cambodia, Laos, and Myanmar are all asking for assistance in setting up an electronic application system for trademark processing, registration, and maintenance; or Vietnam with a request for support to improve professional qualifications to implement the internalization of international treaties that Vietnam have joined as well as promote the participation in new treaties.

In an effort to remove procedural barriers, as well as to remove practical difficulties in enforcement, the IP provisions in Chapter 11 of RCEP aim to promote an environment that promotes innovation and creativity, in order to maintain a fair balance between the legitimate rights and interests of the parties and to encourage the spread of information, knowledge, culture, and arts.

3.7 Implementation Prospects For Vietnam

As analyzed above, the commitments on intellectual property in RCEP are quite similar to the agreements that Vietnam has signed and recently signed such as TRIPS, CPTPP, EVFTA, which Vietnam has now domesticated most of the commitments. Currently, the draft intellectual property law being revised has also integrated many provisions on exceptions, limitation of rights, and enforcement of rights in the spirit of ensuring harmony in the exploitation of rights by rights holders and users. Accordingly, although there are certain different provisions on intellectual property in RCEP, this difference is not significant. Accordingly, Vietnam can fully meet the IP requirements in RCEP. Hence, IP in RCEP is not a big obstacle or challenge for Vietnam when joining RCEP.

IV. CONCLUDE

As the largest free trade agreement in the world, the successful signing of RCEP marks a historic milestone in the process of economic integration and development of ASEAN countries, including Vietnam.

For the enterprise system, RCEP has opened up an export market with many potential, stable, and long-term opportunities. The agreement also creates a binding legal framework, helping to create a level playing field for countries. In particular, Vietnam can receive many benefits from RCEP.

The countries participating in the Agreement are all potential markets with large import demand for agricultural and fishery products, which are products of our country’s strengths. With its commitments to opening up freight and e-commerce, RCEP also makes international trade easier. In addition, the harmonization of intra-regional rules of origin helps Vietnam increase its ability to meet conditions for enjoying preferential tariffs, thereby increasing the competitiveness of our country’s goods when exporting in the region. In addition, with efforts to remove trade barriers, RCEP will also help Vietnam attract potential foreign investment capital.

However, alongside the opportunities are challenges. RCEP will bring great competitive pressure on goods for Vietnam because many other countries in the region have a similar product structure to ours, but their competitiveness is much higher than ours at present. A good example is China. This is a partner with great advantages in terms of rich and low-priced goods and volume. This country poses significant competitive challenges for our country, especially for strong commodities such as agriculture and fishery. Not only that but the challenge is also facing the domestic business when the domestic market is opened through RCEP. This challenge will be even greater when the majority of domestic consumption preferences still prioritize imported goods. Consequently, besides accepting the advantages, businesses need to be prepared to deal with new difficulties.

Nevertheless, these are inevitable difficulties when joining any free trade agreement. Businesses will always face challenges along with the benefits that opening the market brings. To contribute to solving difficulties for businesses when Vietnam joins RCEP, the State and relevant ministries, agencies and sectors should organize training programs to disseminate RCEP information to business departments. In addition, the development of programs to support and improve the knowledge of enterprises in competition and increase product value should also be prioritized.

For the whole legal system in general and IP in particular, basically, RCEP is not a big challenge for Vietnam because the commitments in the Agreement are not too new, and are mainly built on the vision of cooperation for mutual development instead of placing heavy demands on the immediate improvement of the legal system of its members. Accordingly, Vietnam can take advantage of this opportunity to further improve the national legal system, with the tendency to approach developed economies in the region and in the world.

ASL LAW is the top-tier Vietnam law firm for Intellectual Property Services. If you need any advice, please contact us for further information or collaboration.

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