US embassy cable - 04HANOI966

UNCLAS SECTION 01 OF 02 HANOI 000966 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EB/IPC:DRBEAN, EAP/BCLTV AND EB/ODC 
STATE ALSO PASS USTR BURCKY/ALVAREZ AND BRYAN 
STATE ALSO PASS USPTO FOR URBAN 
STATE ALSO PASS LIBRARY OF CONGRESS FOR TEPP 
USDOC FOR LASHLEY AND 4431/MAC/AP/OKSA/HPPHO 
USDOC ALSO FOR ITA/TD/OTEA/JJANICKE AND ITA/TD/SIF/CMUIR 
 
E.O. 12958: N/A 
TAGS: KIPR, ETRD, ECON, VN, IPROP 
SUBJECT: VIETNAM: MICROSOFT FOCUSED ON IPR 
 
SENSITIVE BUT UNCLASSIFIED PROTECT ACCORDINGLY 
 
REF:  HCMC 367 
 
1. (SBU) Summary.  While disappointed in the lack of 
progress in improving IPR protection in Vietnam, Microsoft 
remains committed to engaging the GVN on this critical 
issue.  Microsoft and Business Software Alliance (BSA) 
representatives are looking at ways to encourage the GVN to 
adopt a legitimate software initiative and asked the USG to 
encourage the Prime Minister to send a letter to all GVN 
agencies ordering them to use only legitimate software.  End 
summary. 
 
2.  (SBU) On March 30, Economic/C and Econoff met with 
Singapore and Bangkok-based representatives of Microsoft and 
the Business Software Alliance (BSA) to discuss Intellectual 
Property Rights issues in Vietnam.  Microsoft employees were 
both regional senior managers and corporate government 
affairs representatives.  Throughout the meeting it was 
clear that while Microsoft is frustrated with the lack of 
progress on IPR issues in Vietnam, it is committed to 
finding opportunities to engage with the GVN and to work out 
a strategy to develop positive momentum for change. 
Microsoft representatives indicated they would continue to 
engage senior level officials, including at the DPM level, 
to prioritize IPR issues. 
 
3. (U) Econoffs explained that the Ambassador and Econoffs 
frequently highlight to GVN officials at every level two key 
points on the importance of IPR to Vietnam: 
 
-- The GVN has prioritized attracting foreign direct 
investment (FDI) to Vietnam.  Strong IPR is a critical 
factor attracting FDI, not only in the IT sector, but also 
across the board.  Econoffs suggested that Microsoft work 
with other international software and hardware companies 
(including its competitors) to deliver a unified message to 
the GVN that IT companies will not look seriously at Vietnam 
until there is better IP protection.  Microsoft noted that 
the Business Software Alliance (BSA) included a number of 
both hardware and software firms and was be a good vehicle 
for making such an approach. 
 
-- Strong IPR enforcement is critical to the development of 
domestic industries that depend on IP - most notably the IT 
sector.  Econoffs recommended Vietnam work with and provide 
assistance to the Vietnam Software Association (VINASA) to 
help this organization develop itself as a stronger advocate 
for the domestic software industry and improve VINASA's 
ability to influence government policy vis--vis IPR. 
 
 
4. (SBU) Microsoft representatives noted that in their 
experience several things have to happen before a country is 
capable of effective IPR enforcement.  First, Vietnam needs 
a strong legal framework that includes significant penalties 
for enforcement.  Additionally high-level engagement on the 
issue is necessary.  Microsoft noted that in some countries, 
a letter from the Prime Minister to all government agencies 
(on IP protection, including the use of legitimate software) 
has been the catalyst for change.  And, of course, there is 
the need for effective enforcement.  Finally, Microsoft 
noted that development of the private sector is also 
important - a domestic constituent base interested in IP 
enforcement is useful in engaging government action. 
 
5. (SBU) Microsoft wants to encourage the GVN to ensure that 
all Government offices use only legitimate software. 
However, cost is clearly a concern for the GVN as well as an 
excuse for the negligible progress the GVN has made in this 
regard.  Microsoft is looking into the possibility of IFI 
funding (ADB, WB etc) or concessionary commercial financing 
for a GVN strategy to implement a legitimate software 
initiative for all or some GVN national government entities. 
Microsoft representatives asked that in our engagement with 
the GVN - perhaps at the next BTA Joint Committee meeting in 
May - we suggest that a positive and tangible step the GVN 
could take on IPR would be to have the Prime Minister send a 
letter to all government agencies instructing them to use 
only legitimate software. 
 
6. (SBU) Microsoft representatives also highlighted their 
concerns about recent GVN comments that it plans to switch 
to open source software (like Linux) to "fix" its IPR 
problems.  While acknowledging that the decision on what 
type of software the GVN wants to use is up to the 
Government, Microsoft asked us to help convey the message 
that the GVN should not switch to open source for the "wrong 
reasons."  Switching to open source does not insulate the 
GVN from the responsibility of ensuring that all software 
used by the GVN is legitimately licensed, Microsoft 
asserted.  Econoffs noted they had already raised this issue 
with the GVN. 
 
7. Comment:  Many of the factors Microsoft mentions as 
essential for strong IPR protection are beginning to come 
together in Vietnam.  While the private sector still faces 
significant disadvantages vis-a-vis the state-owned sector, 
greater attention is being given to the importance of 
fostering the private sector development each day.  New, 
albeit fledgling, business and music associations are 
cropping up with IPR enforcement at the top of their list of 
priorities.  In addition, donors (including the USAID-funded 
Support for Trade AcceleRation (STAR) Project) and the GVN 
are dedicating significant resources toward revising IPR- 
related legislation, including Vietnam's Civil Code, Civil 
Procedure Code and regulations on remedies.  However, the 
GVN is not "leading by example" on the issue of copyright 
piracy.  Government agencies of all shapes and sizes are 
loaded down with pirated software.  An effort by the GVN to 
move toward comprehensive use of legitimate software - even 
if it is done ministry by ministry - would be a significant 
step forward and we should do everything we can to encourage 
and support such an effort. 
BURGHARDT