Software Ownership - Key to Higher Corporate Value for Vietnamese Manufacturers

For the first time, the Copyright Office of Vietnam, Inspectorate of the Ministry of Culture, Sports and Tourism (MOCST), Business Software Alliance (BSA) and Vietnam Competition Authority, Ministry of Industry and Trade, met in person with hundreds of local businesses in a workshop titled “Software asset management and better competitiveness for Vietnamse manufacturers” to update on the latest information related to software ownership in Vietnam and the world. In addition to related governments, the workshop was also attended by international law and consulting firms, major local and global software publishers, who contributed advisory insight and efficient solutions on software ownership for the local business community.

 

Remaining high on the government’s priority list, intellectual property rights and software ownership in particular for the last few years have not only been protected by the local law with rigorous regulations but the enforcement of such laws has also been taken equally seriously. Addressing the workshop, Deputy Chief Inspector Mr. Pham Xuan Phuc said that in 2010 the multidisciplinary task force raided 60 companies and checked 2361 computers. Most the inspected companies had some form of illegal use of computer software, for which they received due civil charges and orders to stop illicit use of software. As reported by companies and software publishers, corporate users bought USD1,379,228 worth of software. In 2011 to date, the inspectors audited 50 companies and checked nearly 2000 computers, and as preliminarily reported by companies and software publishers, USD489,775 had been paid by corporate users for software.

 

“Confronting rampant computer software piracy in various places and areas of activities, and under the aggressive leadership of the government, MOSCT, Ministry of Public Security and other agencies, the MOSCT Inspectorate has stepped up efforts with consistent actions, more intensive audit and inspection, and serious punishment of infringements, resulting in considerable reduction of computer software piracy year after year. In the years to come, we will keep up the strong actions to make sure a real deterrence effect is achieved”, added Phuc.

 

According to Mr. Vu Ba Phu, Vice Director General of the Vietnam Competition Authority, the recent approval of the parliaments of US Washington and Louisiana states of a new Act called “Intellectual property rights infringements in information technology” in June 2011, targeting foul play through the use of unlicensed software, has rung an alarming bell for businesses in Vietnam on the potential causality of software piracy. Technically, the Act was enacted to intercept illegal use of software overseas by pressuring US distributers to demand that exporters in a third country to stop using software illegally in their entire business operation chain, from warehousing, transport to accounting and auditing. The Act is applicable to any products that are made directly from the use of software or equipment involved with IPR infringement and products made by users of illicit software in distribution, promotion or sales.

 

Mr. Vu Ba Phu shared: “This seems to have proven a considerably effective protective instrument for developed countries.That said, one cannot be sure that the Act will be effective only in the two states of Washington and Louisiana without being taken to scale in the entire United States and even other parts of the developed world.”

 

Phu also pointed out potential unfavorable implications of the Act on businesses in Vietnam as it may raise a technical barrier to imported goods from Vietnam since most manufacturers and exporters in Vietnam are small and medium sized enterprises, and software ownership takes up a sizable part of their operation costs. This will indirectly affect the competitiveness of both the companies and their products, as manufacturers and distributers who are not able to present a software ownership certificate may face the risk of not being allowed to sell their goods in the US market, particularly textile and sports commodity exporters. Also according to Phu, a second major threat will be the potential adoption of a higher anti-price dumping margin in dumping cases against products imported from Vietnam.

 

For such reason, Phu believes: “Software piracy, if not resolved soon, will leave a stained image and impression on products imported from Vietnam in the US market and the world at large. It will be used as a bargain chip in negotiations by the application of higher standards and a more precautious attitude by US importers and distributers. In a way, this will be a factor that undermines the competitiveness of Vietnamese exporters and products.”

 

As intellectual property rights are increasingly upheld in a knowledge economy and becoming a global concern in a highly integrated economy, respect and compliance will be the preconditions for a company to remain trustworthy. Mr. Vu Ba Phu observes: "Once a change of awareness has taken place, businesses and manufacturers will see the use of licensed software as a part of their social responsibility and a way to conform to common ethics. This will not only pay dividends to the businesses themselves but also build a more reliable image for Vietnamese products and exporters in the eyes of foreign importers and distributers.”

 

“Businessmen can also make a difference in terms of the image of their products and companies in comparison with other businesses and countries by complying fully with software ownership laws. Their products will then be easily entitled being labeled “with licensed software”, just like the “Eco product” labeled ecological products, as a competitive edge and an element to be considered by consumers," Phu further advised the corporate participants at the workshop.