Parallel Import Enforcement in Southeast Asia – VIETNAM

Parallel imports are legal in Vietnam under the Law on Intellectual Property, which states that IP owners cannot prevent others from “circulating, importing, or making best use of products which were lawfully launched to the market, including overseas markets,” with the IP owner’s consent. This means that once the goods legally enter the market, whether in Vietnam or abroad, the IP owner cannot preclude the subsequent distribution of the goods based on its IP rights. This statute legitimates parallel imports and international exhaustion of rights in Vietnam, and it applies to both trademarks and patents, among other IP rights.

Pharmaceuticals

Vietnam has allowed the parallel import of pharmaceuticals since 2004 (in Decision No. 1906/2004/QDBYT) and codified parallel import in the country’s new pharmaceutical law. As a result, the authorization of grey drugs (non-counterfeit drugs sold by someone other than the trademark owner) does not run counter to international treaties to which Vietnam is a party.

Remedies

Many brand owners can still combat parallel imports on grounds not related to IP rights. For example, brand owners can address smuggling of goods without invoices, unidentified origin or sources, improper labelling, and failure to meet registered product quality or specifications.

Trademark owners can also proceed with customs recordal in Vietnam. As part of the recordal process, trademark owners must provide customs with a list of authorized importers. This helps customs authorities recognize counterfeit versions of products and improves the chance that suspicious items will be blocked at the border. However, Customs is on the lookout for infringing products, not parallel imports. If such parallel imports neither infringe the trademark owner’s rights nor violate other legal requirements, such as labelling and anti-smuggling regulations, customs will not stop the inbound shipments.

Importers of pharmaceutical products must obtain a license for the parallel import of pharmaceuticals from the Drug Administration of Vietnam through a simple procedure to guarantee the drugs’ safety. Overall, eliminating parallel imports of drugs is difficult under current practice in Vietnam because the attraction of lower prices of the products may affect the decisions of the authorities.

By Loc Xuan Le, Tilleke & Gibbins, Vietnam, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact vietnam@transatlanticlaw.com

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