Chapter 12
Shaping the Vietnamese IT market
Property rights, technical standards, privacy protection

A national market for electronics and other IT products and services is a function of the companies and the customers that do business in that market. But, more than that, laws and other formal regulations stimulate and restrict the market behavior of both companies and customers. In fact, the IT market -- like any other market -- cannot prosper without a proper set of rules and an institutional support structure. This was discussed at length in Chapter 8.

In our case studies and interviews in Vietnam's industrial sector we have found only weak institutional support of the new market economy. This seems to be even more apparent in the IT industry than in other branches of industry. For Vietnamese IT production the most obvious lack of institutional support relates to the ownership of computer software.

One reason why there is no real software industry in Vietnam is that there is no real market for software in Vietnam. There are many users of software, but there are relatively few buyers of software. Typically, software is appropriated informally by firms, institutions and individuals, who rarely pay anything for the product.

All persons we have met during our investigation know that there are virtually no buyers of software in Vietnam. The major producers of software, like Microsoft, know that they have thousands of non-paying customers in Hanoi and in other cities in the country. They also know that the central government has not yet created a software market by setting the proper rules and enforcing the law of ownership.

We strongly believe that the intellectual property rights issues in Vietnam must be reconsidered. With an expanding cross-boarder flow of applications programs and other computer software, Vietnam must re- examine its legislation and administrative procedures in these matters to link up more effectively with its major trading partners. The intellectual property regime of Vietnam should be similar to that of other market economies.

It might be useful, at this early stage of Vietnamese software develop- ment, to examine the property rights issues from the vantage point of potential exporters. Such an examination may identify a need for a single national ministerial control mechanism dealing with all economically relevant areas of intellectual property protection. Administrative control could also device strategies for the protection of Vietnamese computer software at home and abroad and help firms and institutions retrieve their investments in software development.

While advancing the protection of Vietnamese computer software, the experiences from other countries in South East Asia. and els'ewhere should be studied. Especially important are the advanced, already developed and implemented property rights regimes. Vietnamese lawyers should also learn how to deal with exclusive rights issues and infringements. The government should improve the commercial and other protection of stored data or databases.

In the near future, it may also become necessary to develop protection against 'unfair commercial practices' in the information industry. Since Vietnamese firms in the IT industry are still weak, foreign competitors may be tempted to use the opportunity to do business in Vietnam by preventing their Vietnamese competitors from acquiring essential information and restrict or delay the supply of key components and other technology.

Vietnam has much to gain by being an active participant in the shaping of 'fair commercial practices' of the information industry and in strengthen- ing the international property regimes in this industry.

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