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Last updated: Friday, March 22, 2019


Legal Persons in breach of Computer Software Ownership to Face Criminal Charges

Posted: Tuesday, March 20, 2018

According to the Penal Code No. 100/2015/QH13, with specific provisions revised by Law No. 12/2017/QH14, passed by the National Assembly on June 20, 2017, while intellectual property infringements may only result in consequences in the form of civil sanctions under the former law, with the new regulations of the revised Penal Code, the wrongdoers may be subject to criminal prosecution.

For the first time in the penal legislation history in Vietnam, the Penal Code of 2015 has added penal obligations for commercial legal persons. Accordingly, starting from January 1, 2018, commercial legal persons will bear penal responsibilities for the infringements they commit. To be more specific, commercial legal entities will bear penal obligations for violation of ownership rights or related rights, and infringement of brand names and geographic indicators.

As established in Article 225, 2015 Penal Code, regarding violation of ownership rights and related rights, private individuals committing this offense will be subject to a three-year non-custodial sanction or jail term of up to five years. Commercial legal entities found guilty of this wrongdoing will be levied a fine of around VND300 million to VND1 billion. Recidivism by twice or more, and infringing commodities worth VND500 million or more may be subject to a financial fine of VND3 billion or suspension of up to two years. Besides that, various penalties may also apply to a single commercial legal person, such as suspension of business, moratorium, banned activities in specific areas, and capital raising ban.

The revised Penal Code is also more specific on the signaling indications of misconducts relating to intellectual property rights. In addition to indications “on a commercial scale”, the revised Penal Code also makes use of other indications to resolve intellectual property rights infringements, including illicit interests, and losses/damages to the holders/owners of copyrights. Additionally, the historical criminal record or civil offense record of the wrongdoing business will also be used as legal ground for resolving a misconduct. As these indications have been made more specific, right owners as well as relevant regulatory authorities will deal with ownership infringements more easily.

Speaking about the 2015 (revised) Penal Code with its major leaps forward in dealing with ownership right and related right breach, including that for computer software, counselor Pham Duy Khuong said: “This is very important in combating intellectual property right breach, as evidence from addressing intellectual property right infringements over the years has indicated that most of the offenses committed to date are the work of commercial legal persons. Sometimes, these commercial legal entities are even created and put in operation for the sole purpose of abusing intellectual property rights that are registered and protected in Vietnam. It is time for these piracy acts to be put under control and answer to sufficiently strong punitive actions, based on the consequences that such acts may cause, in order to make sure that the intellectual property created through others’ efforts and costs is protected. Hopefully with the new and better rules finally in place, the (revised) 2015 Penal Code, when enforced, will provide effective legal resources for the fight against intellectual property right infringements in Vietnam.”

Aware of on-going developments, the Vietnam Copyright Office is sending letters to thousands of businesses across the country, recommending them to revisit the uses of computer software programs at their own establishments, and adhere to existing laws and regulations on ownership rights, which also helps avoid cyberattack risks.

The Director General of the Copyright Office of Vietnam Bui Nguyen Hung said: “Over the years, enforcement and protection of ownership rights and related rights in general, and ownership rights for computer software programs have achieved impressive results. Nevertheless, computer program piracy is still on-going in different forms and at varying degrees of transgression. This is mostly attributed to the poor awareness and responsiveness for law compliance of many individuals and organizations that provide and use computer programs.”

Hung also informed that, every year, the Copyright Office would recommend businesses in writing to use licensed computer software and give advisory about a primary cause for information systems incidents that happen in many businesses involving the use of computer programs of dubious sources, resulting in computers affected with malwares.

Sources familiar with the Ministry of Culture-Sports-Tourism reveal that inter-agency inspection task forces audited 63 businesses in 2017 and impose administrative fines amounting to VND1.6 billion. “Enforcement and protection of ownership and related rights, and ownership rights for computer software in particular, is one of the biggest concerns that require special attention from the Government. With the newly revised Penal Code coming into effect this year, if lack of awareness and compliance persists, businesses will find themselves in the face of major risks, which may adversely affect their operation, while commercial legal persons may also face penal prosecution”, said Mr. Pham Cao Thai , Chief Inspector, Ministry of Culture-Sports-Tourism.

The most recent updates of the 2015 Penal Code, with increased punitive sanctions for infringements of ownership rights and related rights, including computer software ownership, refresh the government’s resolve in combating ownership right abuse in Vietnam. In addition to avoiding the risk of facing penal charges, compliance and legal use of software may also help businesses to keep their sensitive data safe from cyber attacks that are increasingly targeting businesses in terms of both frequency and severity.

Nam Pham

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