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28 May 2015AsiaTran Manh Hung and Bui Phuong

What the TPP would mean for patent law in Vietnam

The Trans-Pacific Partnership (TPP) is a proposed multinational trade agreement. To date 12 countries are participating in negotiations: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, Japan and the US. Several other countries have ‘shown interest’ in joining. Vietnam officially announced its participation in the negotiations in November 2010.

Various trade issues have been discussed and negotiated over the course of 19 official rounds of talks, the outcome of which has not been made public. The aim of the TPP is to address new and emerging trade issues emanating from 21st-century challenges by enhancing trade and investment among the TPP member countries.

As part of the TPP, Vietnam expects to exploit new opportunities in improved international market access, especially by promoting increased exports for Vietnamese products and inviting foreign investment.

Currently, intellectual property is still a controversial topic among TPP policy negotiators, especially in developing countries such as Vietnam. A last obstacle for IP in Vietnam is the inhospitable legal regime that requires substantial changes to both IP law and practice.

According to publicly available information, it was proposed by some of the negotiating parties that Vietnam should participate in international treaties on patent prosecution procedures.

In particular, it was proposed that Vietnam accept patent protection for new methods of use or new functions of existing products; disease diagnosis and/or prevention methods; plant or animal varieties; and essential biological processes for the production of plants or animals.

All these subjects are excluded from patentability under Vietnam’s current IP legislation.

Pros and cons

The TPP seeks to make some change to the inventive step requirement. Accordingly, the examination of an invention's inventive step shall not be as strict as it is now in some jurisdictions, including Vietnam. Therefore, more patents shall be granted and right owners shall enjoy more benefits from exploitation of exclusive rights.

This is a good incentive for foreign investors to enter the Vietnamese market for their businesses, especially those coming from developed countries.

In order for a step to be considered inventive, improvement or advancement of a subject invention must not be obvious to a person having ordinary skill in the art.

But under the current TPP proposals, ie, in the pharmaceutical area, even a minor modification to an existing drug may be patentable. Such practice would extend the length of the same patent in the market, and as a result, would affect public access to generic drugs.

Furthermore, it has been proposed that the duration of patent protection be extended. The reason cited was to compensate patent owners for unreasonable delays occurring during the registration of a patent.

The TPP construes an “unreasonable delay” as a delay of more than four years in the issuance of a patent, or two years after a request for examination of the application has been filed, whichever comes first. Therefore, in practice, the patent protection term may extend beyond 20 years, which would further prolong the entry of inventions to the public domain, including pharma patents.

“In practice, the patent protection term may extend beyond 20 years, which would further prolong the entry of inventions into the public domain, including pharma patents.”

Sometimes, this period may extend as far as six to seven years due to a backlog in pending applications and the limited capacity of the NOIP’s examiners. Adhering to the proposed definition of “unreasonable delay” means that the protection term for a significant proportion of patents filed at the NOIP would be extended under the new regime.

Sometimes, this period may extend as far as six to seven years due to a backlog in pending applications and the limited capacity of the NOIP’s examiners. Adhering to the proposed definition of “unreasonable delay” means that the protection term for a significant proportion of patents filed at the NOIP would be extended under the new regime.

It is worth noting that although Vietnam is a developing country, drug prices here are much higher than the average for the rest of the world, according to an investigation conducted in 2010 by the World Health Organization. The average income per person in Vietnam, however, is just over $2,000 per year.

If the patent protection period is further extended by a number of years, this will hinder Vietnamese patients’ access to generic drugs due to the higher price tags. Currently, about 20% of Vietnamese patients can afford all of the drugs necessary for their treatments.

In 2013, the US reportedly introduced a revised TPP proposal to address the inability of developing countries to access much-needed medicines.

Some provisions that grant relief, and are optional for developing countries, are as follows:

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