1. IPR STRATEGY IN THE FUTURE S.E.A KNOWLEDGE MARKET STI Days, Hanoi, 11 May 2016 Innovation workshop: Changing innovation framework conditions in ASEAN – regional integration and policy options Tran Manh Hung – BMVN INTERNATIONAL LLC (a member of BAKER & McKENZIE VIETNAM)

2. CONTENTS Overview IP valorization in Vietnam, Indonesia, Thailand The future South-East Asia (S.E.A) knowledge market IPR strategy in the future S.E.A knowledge market

3. 1. OVERVIEW Enforcement - actions against infringement Valorization - Use - License - Assignment - Franchising - etc. Rights Establishment - seek for certificates of registration R&D IPR STRATEGY

4. 1. OVERVIEW R egistration VietnamThailandIndonesia Principle First-to-file Average time for obtaining COR (from filing dates) Patents: 4 – 5 years Designs: 12 – 14 months Marks: 1 – 2 years Patents: 5 – 8 years Designs: 15 months Marks: 12 - 18 months Patents: 5 – 6 years Designs: 2 – 3 years Marks: 18 -24 months Necessity The only method to establish rights over patents and designs To enable holders to license and assign certain IP rights Owners can enforce its rights in a more straighforward manner

5. 1. OVERVIEW Different forms of IP valorization Use (Self-exploitation) Assign (may take place among bigger transactions) License/ Franchise ExampleLotteria and its wholly- owned stores LUMIA from Nokia to Microsoft KFC, McDonald’s and their franchise stores Basic ProsFull management over IP assets Obtain full profits gained from the IP assets Increase the value immediately No need to monitor the use of the IP assets Quick expansion with relatively low risk Periodical incomes Utilize local resources and knowledge Basic ConsRequire an extensive management system Require more resources to expand No longer benefit from the IP assets Require regular monitoring of the use of the IP assets

6. 2. IP VALORIZATION IN VIETNAM, INDONESIA, THAILAND Legal Framework Vietnam: WTO Accession Agreements (2007), The Civil Code (2005), Commercial Law (2005), IP Law (as amended 2009), Competition Law (2005), Technology Transfer Law 2006 (to be amended within 2016-2017). Indonesia: Law Number 7 on Trade (2014), Law No. 28 on Copyright (2014), Law No. 14 regarding Patents (2001), Law No. 15 regarding Marks (2001), Law No. 30 regarding Trade Secret (2000). Thailand: The Thai Civil and Commercial Code, Unfair Contract Terms Act B.E. 2540 (A.D. 1997), Trade Secrets Act B.E. 2545 (A.D. 2002), Trade Mark Act B.E. 2534 (A.D. 1991), Patent Act B.E. 2522 (A.D. 1979)

7. 2. IP VALORIZATION IN VIETNAM, INDONESIA, THAILAND Noticeable legal problems/updates in Vietnam Problems: -Lack of specialized laws -Franchise regulations: symbolic, impractical, inefficient Updates: - TPP: license agreement will not have to be recorded to take effects against third parties (Art. 18.27) - A 2016 Draft Law Amending and Supplementing a number of Articles of the Law on Technology Transfer

8. 2. IP VALORISATION IN VIETNAM, INDONESIA, THAILAND Practice Franchising: - 144 foreign companies (from 15 Jan 2007 to 14 Jan 2016) -Most popular sectors: Restaurant; Retail Store VIETNAM

9. 2. IP VALORISATION IN VIETNAM, INDONESIA, THAILAND Practice Franchising: 201220132014 (estimated)2015 (estimated) Total Franchises80090010001100 Local450500540580 Foreign350400460520 INDONESIA

10. 2. IP VALORISATION IN VIETNAM, INDONESIA, THAILAND Practice Franchising -Brand: 370 brands (2013); 500 brands (expected in 2018) -Franchisee: 12,000 franchisees (2013); -Franchise businesses: 1555 businesses (589 are in retail, 447 are food and beverages operators); 85% are domestic. THAILAND

11. 2. IP VALORISATION IN VIETNAM, INDONESIA, THAILAND Case study Enter: Joint venture (1996), Now: Lotteria Vietnam Company Limited. Development -Before 2005: 1 outlet (1998) -> 10 outlets (2005). -After 2005: number of outlets: 20 (2006); 40 (2007); 50 (2008); 92 (2011); 210 (2015) Expansion: 12 provinces (2011) -> 30 provinces (2015) Market share: Fried chickens 30%; Hamburgers 70% Customers: increasing rate: around 40% annually; Strategy: -Adapt to local culture: adding rice; chicken soup; soy chicken; -Apply for trademark registrations: 2 marks in 1994 and 1998 VIETNAM - LOTTERIA

12. 2. IP VALORISATION IN VIETNAM, INDONESIA, THAILAND Case study Enter: First franchise contract (8 June 1993); First restaurant (15 Mar 1994); Franchise agreement was terminated (Mar 1998); Return to Thailand (28 Aug 2011). Number of restaurants: 18 (2015); Expecting: 30 (2018) Revenue: 200,000,000 Baht (2014) Spending per consumer: 150 Baht THAILAND – YOSHINOYA

13. 3. THE S.E.A KNOWLEDGE MARKET Currently Legal framework regarding IP valorisation: incomplete, unspecific High potential In the future: R&D: Crowdsourcing will become a hot trend Better legal instruments due to international integration: TPP, Future AEC treaties Fierce competition: the market will be opened to franchisors around the world.

14. 4. IP STRATEGY IN THE FUTURE S.E.A KNOWLEDGE MARKET Invest in R&D activities, pay attention to crowdsourcing Acquire legal protection for IP assets as soon as possible Understand business partners and market Adapt to local market Seek local expertise (South-East Asia IPR SME Helpdesk, local renowned law firms)

15. Thank you for your attention! Fan page: ‘ASEAN IPR SME Helpdesk' @iprASEAN ‘South-East Asia IPR SME Helpdesk’ www.yourIPinsider.eu Channel: Helpdesk TV To learn about any aspect of IPR in Vietnam or elsewhere in South East Asia, contact us on question@southeastasia-iprhelpdesk.eu question@southeastasia-iprhelpdesk.eu Stay Connected!