Patents and petty patents (also known as utility models) are exclusive rights given to creators of inventions which solve technical problems. For companies, patents are an important part of IP portfolios and add legal protection to companies’ unique innovations and technological solutions in manufacturing or industry.
This article details rules in Laos’ Law on Intellectual Property concerning patent content, registration, protection, and enforcement. For SMEs seeking to use their technological innovations in Laos, the information herein represents an important first step in guarding against counterfeiting and IP piracy.
Laos: a background for SMEs
The Lao PDR is a landlocked country in Southeast Asia sharing land borders with China, Vietnam, Cambodia, and Thailand. Its 6.8 million residents live in a developing nation which has seen mono-party Communist rule and endemic corruption since 1975. The country is member of the WTO, ASEAN, the Asia-Pacific Trade Agreement, the East Asia Summit, and the International Organization of La Francophonie (OIF). The Lao PDR ranks 148th in the world in Ease of Doing Business according to a World Bank report in 2014.
Laos’ trade with the EU, although small, is rapidly growing. In 2014, EU exports to Laos grew 53.3% to reach 182 million euros. That year, machinery, appliances, and transport equipment cumulatively made up 63% of EU exports to Laos, particularly non-electrical machinery (25.9%). These figures put the EU as a distant fourth among Laos’ largest trading partners after Thailand, China, and Vietnam. Both machinery and equipment and consumer goods have been identified as ASEAN as target areas for FDI in Laos.
Prior to Laos’ accession to the World Trade Organisation (WTO) 2 February 2013, the country’s intellectual property laws went through considerable amendments. IPRs in Laos are governed by the Law on Intellectual Property No. 01/NA of 20 December 2011 (“IP Law”), protecting copyright and related rights, patents, petty patents, industrial designs, trademarks, trade names, layout designs of integrated circuits, geographical indications, trade secrets, and plant varieties. The new IP Law is based on the World Intellectual Property Organization (WIPO) model law and the requirements of the Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement. Following promulgation of the new IP Law in 2012, it is expected that the Prime Minister will issue guiding decrees on the implementation and interpretation of the new legislation. The Lao PDR is a member of the following international conventions regulating IP matters:
- Patent Cooperation Treaty
- Berne Convention for the Protection of Literary and Artistic Works
- Paris Convention for the Protection of Industrial Property
- Convention Establishing the World Intellectual Property Organization
- ASEAN Framework Agreement on Intellectual Property Cooperation
- ASEAN Trade in Goods Agreement
Patents and petty patents
Definition of patents
Patents are the set of exclusive rights granted inventors or their assignees to exploit an invention for a limited period of time. Patenting an invention publicly discloses information concerning it but also gives the patent holder the right to protect it. Article 3 of the Law on Intellectual Property sets out definitions for patents and petty patents, defining patents as “official certificate from the state organisation issued to protect inventions that are new, involve an inventive step and are capable of industrial application.”
An invention is considered new if it has not existed and has not been disclosed to the public by publication or by use (or by any other means) in Laos or any other country prior to the filing date of the patent application or to the priority date (if priority is claimed; see below for more on priority). An invention has an inventive step when the invention is not obvious to a person having ordinary knowledge in the invention’s field of technology. An invention is considered industrially applicable if it has use in an industry.
Definition of petty patents
Petty patents (known elsewhere as utility models) are the official certificates issued to protect utility innovations. Laos defines utility innovations as “new innovative work[s] derived through technical improvements, which involve simpler [inventive] steps than with inventions.”
In order to receive a petty patent, the utility innovation must be new in the sense that it has not been previously known or used in Laos prior to the date of the application or the priority date (if priority is claimed). To have an inventive step, the utility innovation must involve a new technical improvement, but the level of the inventive step may be simpler than for patents. While the requirement of “novelty” is always to be met, the threshold for an “inventive step” or “non-obviousness” may be much lower or absent altogether for a petty patent. Finally, the innovative work must be industrially applicable, having the same definition as for patents set out above.
Laos excludes certain types of inventions from patent or petty patent protection, including but not limited to:
- Discoveries of existing things or organisms which exist in nature, scientific theories, and mathematical methods.
- Schemes, rules or methods for doing business, performing mental acts or playing games.
- Methods for the treatment of the human or animal body.
Applying for a patent or petty patent
SMEs should apply either to the Department of Intellectual Property in the Lao PDR Ministry of Science and Technology (MOST) or through an international IP registration procedure to which the Lao PDR is a party (such as the Patent Cooperation Treaty). Applications may be filed in either English or Lao, but English applications must be accompanied by a Lao translation which has been certified to be correct within 90 days. If the applicant is applying from outside Laos, they must appoint someone located within Laos as their representative for conducting business related to their application. The application for patents and petty patents must contain the following:
- A request for a patent or petty patent
- Name, address, and nationality of the applicant and inventor and the title of the invention.
- A description of the patent or petty patent and its invention or utility innovation (1)
- One or more clearly defined claims of the subject matter to be covered by the patent
- An abstract outlining technical information.
- Receipt of payment of official fees.
- (if required to understand the invention) Drawings of the invention
- (if the applicant is not in Laos and has no business premises in Laos) A representative with power of attorney, including that agent’s name and address in Laos
- (if applicable) Information on previous applications which the applicant has filed which have used the same patent or petty patent (2)
(1) The Lao Law on Intellectual Property states that descriptions of patents or petty patents must be “in such clear and complete terms as to enable a person of ordinary skill in the relevant field of technology to understand and exploit the invention or utility innovation” and must “disclose the best mode for making or using the invention or utility innovation.”
(2) If an application includes the same subject matter as has been used in a different application for a patent or petty patent in Laos or abroad, the applicant must disclose those applications and must submit relevant documents. In particular, he or she must submit a search or examination report or a copy of the patent or petty patent obtained.
Examination process and length of protection
Laos applies the first-to-file principle, meaning that priority is determined by whoever files the patent, petty patent or industrial design certificate application first, or if priority is claimed, the earliest priority date. An application’s priority date is the date on which that application was filed in another country which is a party to the Paris Convention (or another international treaty to which Laos is a signatory). After filing in a convention country, applicants will have a twelve-month priority period time window in which they may use that priority date in their Laos application, effectively allowing their patent to be evaluated as though it had been submitted in the same time in Laos as it was submitted abroad. Should a patent application using a priority date not be filed within the twelve-month priority period, any subsequent applications will be unable to use that priority date. If priority is claimed, the applicant must submit a copy of the application on which the priority claim is based, certified as correct by the authority which received the application and showing the filing date.
After checking for the completeness of the application, MOST will conduct a substantive examination of the application to determine whether it meets the requirements for patentability or for obtaining a patent or petty patent. The substantive examination for patents and petty patents is based on a search of existing technical knowledge. MOST is required by law to undertake such examination within 32 months for an invention (patent) and 12 months for a utility innovation (petty patent) from the filing date of the application or the priority date (if priority is claimed). All MOST’s expenses to examine the invention or utility innovation are charged to the applicant. In case the application has previously been subject to a search or examination by another authority (in another country) the applicant may submit a copy of that report and request that it be accepted in lieu of conducting a search in Laos.
For applications using priority dates, the relevant Lao authority only conducts a formal examination of the patent application. While the authority does not make a substantive examination, it recognizes and accepts search and examination reports from other IP offices around the world. After consideration and examination of the registration for a patent, petty patent or industrial design application, if it is considered to meet the requirements provided by the IP Law, MOST will issue a patent, petty patent or industrial design certificate.
Exception: temporary protection of inventions and utility innovations at exhibitions
Laos offers temporary protection for inventions and utility innovations exhibited at official or officially recognized international exhibitions if a request for such protection is made and an application is filed within six months from the date on which the goods were first exhibited. If an application for goods thus protected is filed, the application will be considered as having been filed when the goods were first exhibited.
Period of protection
A patent lasts 20 years after the filing date of the application. A petty patent lasts 10 years from the filing date of the application. In order to maintain a patent or petty patent registration, an annual fee must, pursuant to the IP Law, be paid in advance every year by the right holder. The IP Law, however, does not set out the annual fees. The maintenance fees and registration fees for patents, petty patents, and industrial designs are expected to be established by guiding decrees/regulations following the promulgation of the IP Law.
A trade secret is defined as “information which is secret in the sense that it is not known among or readily accessible to persons within the circles that normally deal with the kind of information in question, such as: formula, production process, or any information, which has commercial value because it is secret.” Essentially, it is a commercially valuable piece of information that is not known, or readily ascertainable, and gives the holder an economic advantage over competitors and customers.
To qualify as a trade secret, the Law on Intellectual Property states that information must meet the following requirements:
- The information must be a secret; not known among or readily accessible to persons that normally deal with the kind of information in question.
- The information must have commercial value.
- The proprietor of the information must have taken reasonable steps to keep the information secret.
Protecting trade secrets
Due to their discrete nature, trade secrets are not registered. Instead, trade secrets are automatically granted unlimited protection until their secrecy is lost. When a trade secret is disclosed unlawfully, the owner of said secret can take legal action to seek damages.
Article 60 of Laos’ Law on Intellectual Property grants the proprietor of a trade secret the following rights:
- To prevent the trade secret from being disclosed to, acquired by, or used by others without the proprietor’s consent, in a manner that is contrary to honest commercial practices, EXCEPT:
- Discovery of the information by reverse engineering, laboratory testing, analysis or other similar means; or
- Acquisition of the information without an obligation of confidentiality or trust.
- To protect the trade secret against infringement by initiating court actions and claim damages to compensate for the infringement.
- To prevent the trade secret form being misappropriated.
- To disclose, withdraw or utilize, or transfer the trade secret to other persons.
- To control any person who is in lawful control of the trade secret from employment or a contract or other agreement. It may be that a person’s obligation of confidentiality remains in effect as long as the information remains a trade secret, even if that person’s employment, contract, or other agreement has already concluded. In this event, that person must not divulge the trade secret so long as the confidentiality agreement remains in effect
The most effective line of defence for trade secrets are non-disclosure agreements or confidentiality clauses in employee contracts. These serve to create a legally binding obligation for employees to not reveal trade secrets and serve to prove that the proprietor has taken reasonable steps to keep the information secret.
Protecting your Intellectual Property Rights
SMEs have a number of legal recourses to protect their IPR. In addition to actions taken against those who misuse IPR, anyone can file an objection to a trademark certificate within five years of the publication of that certificate’s registration in the industry gazette. Lao PDR’s Law on Intellectual Property sets out six means of conflict resolution in Article 123:
- Reconciliation between the two parties
- Administrative settlements
- A settlement through the Economic Dispute Resolution Committee
- Action in the People’s Courts
- International dispute settlement
IPR disputes in Laos can be slow, costly, and unpredictable. Endemic corruption, combined with an inefficient bureaucracy, means that SMEs should resort to civil enforcement only once they have exhausted other means. Often a quick and cost-effective solution to IPR issues is mediation with infringers in accordance with tort law. SMEs are encouraged to seek mediation as a first option.
IPR owners may turn to the People’s Court at the district or provincial level to enforce their rights by means of civil litigation. Available remedies include:
- A court order to the effect that the infringer ceases with the infringing acts.
- A suspension of customs clearance goods.
- A judgement of infringement.
- Damages – compensation for infringement and legal fees.
- The destruction/disposal of infringing goods.
- The disposal of tools, etc., used to create/commit the infringement.
The District/Provincial Court’s decision may be appealed to the Appeal Courts and the Supreme People’s Court. Overseas court orders must be recognised and approved by the Laos courts to be effective and executable in Laos. In addition, IPR owners may request the People’s Court to order prompt and effective provision measures (injunction orders) to:
- Prevent an infringement from occurring.
- Prevent the entry into the channels of commerce of goods, including imported goods immediately after customs clearance.
- Preserve evidence in regard to the alleged infringement.
Moreover, an IPR owner may apply for ex parte provisional measures with the People’s Court where any delay is likely to cause irreparable harm to the IPR owner or where there is a demonstrable risk of evidence being destroyed.
Criminal prosecution may be initiated through the Lao police force (economic division), who refer the case to a public prosecutor for criminal court action. The competent court is the People’s Courts at the provincial level (and the Appeal Court and the Supreme People’s Court for appeals). Criminal actions are available for the protection of copyright, patents, industrial designs, geographical indications trade secrets and trade marks. Possible penalties include damages, imprisonment for three months up to two years, and fines of between LAK 500,000 and 10,000,000, equivalent to approximately EUR 50 and EUR 1,000. The infringer may also be subject to additional measures, including suspension, withdrawal of business licenses and seizure of infringing goods and equipment used to commit the infringement.
For more information on Laos IPR and how to best product your products against infringement in the Lao People’s Democratic Republic, check out the guides available at our Helpdesk or contact one of our experts for free, tailored advice.
- Department of Intellectual Property
Ministry of Science and Technology (MOST)
P.O. Box 2279, Vientiane, Laos
Tel: (856-21) 240 784
Fax: (856-21) 213 472
 For more information, see the WIPO website at: http://www.wipo.int/wipolex/en/profile.jsp?code=LA#a6