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Counterfeiters having a royal time in Vietnam

The merchandise -- piles of counterfeit CDs, DVDs and computer software -- was back in the shop in Hanoi's tourist-heavy Old Quarter just a few hours after it was seized in a police raid.

"We paid a bribe to a person I know in the police station, and they let us have it back," said Tuan, the shop owner.

An estimated 97 percent of the software on the market in Vietnam is pirated, the highest rate in the world, according to the industry trade group Business Software Alliance. Yet the country has taken only hesitant steps to address the issue -- and its anti-piracy agency has no enforcement powers.

Pressure for change is likely to grow under a new US trade pact, signed Oct. 17 by US President George W. Bush, which guarantees protection of intellectual property and copyrights.

Tuan, who declined to give his full name, shrugged off the police raid as a routine inconvenience that's part of doing business.

The widespread attitude that counterfeiting is a business, not a crime, is at the heart of the difficulties facing Vu Manh Chu. As head of the Ministry of Culture and Information's copyright department, he is charged with curbing Vietnam's piracy rate.

Chu is the first to admit that the magnitude of the problem dwarfs the country's ability to confront it.

"Vietnam has been flooded with pirated goods of every kind," he said. "We have some responsibilities in this. But Vietnam has a long border and we can't patrol it closely. It allows for easy smuggling into the country."

Misdemeanor fines for pirating intellectual property can run from 200,000 dong (US$15) to 70 million dong (US$5,000) while criminal charges bring one to three years in prison and up to 200 million dong (US$13,000) in fines. Still, only a handful of cases are prosecuted each year because the laws are unclear, Chu said.

With no actual enforcement powers, Chu's copyright department is relegated to sending out warning letters to violators. This year, his department has handled about 500 letters of complaint. A separate ministry is responsible for patents and trademarks.

When raids are conducted by other agencies, violators are usually back in business within days, if not hours, Chu said.

Copyright infringement is a sore point for software giant Microsoft, whose popular Windows and Office programs, retailing for several hundred dollars, are sold on the street for US$1 to US$2.

"We're pirated at all levels -- by multinational companies, government agencies, state-owned enterprises and retail shops," said Ngo Phuc Cuong, Microsoft's chief representative in Hanoi. "They perceive that copying software is an acceptable practice. It's an education problem."

Though Vietnam is not the sole offender, at least in countries like Singapore or Malaysia, some efforts are made at enforcement, he said. "Here we don't feel protected by the law."

That, in turn, can have a chilling effect on Vietnam's own domestic technology industry, said Ahmed Chami, Microsoft's South Asia business development director. "If bright young Vietnamese software entrepreneurs aren't sure that their work will be sold instead of copied, then they won't do it."

Indeed, local software makers have complained bitterly about the widespread use of pirated software and called on the government to take a stronger stand.

Pham Tang Cuong, director of the SCC software company, said he is being bankrupted by domestic pirating. The use of pirated software by state-owned enterprises is widespread, while violations among government agencies are even worse, Cuong said. It costs his company 80,000 dong (US$5) to manufacture a CD-ROM, while a state-run bookstore sells a fake copy for 15,000 dong (US$1), he said.

The message seems to be getting across. Earlier this month, Viet-nam's largest Internet company, state-owned FPT, signed its first copyright licensing agreement with Microsoft, paying an undisclosed amount to have the software legally installed on their computers.

For CEO Truong Gia Binh, it's a matter of self-interest. Respecting international software copyrights is the key to insuring Vietnam's own fledgling software development growth, he said.

"If you don't respect the intellectual property of others, it won't be possible to have a software industry here," he said.

Chu said he hopes the trade agreement will force Vietnam to rework its rules on copyrights to improve compliance. But he said there are no plans at present for the National Assembly to revise laws regulating enforcement.

US officials have promised to provide Vietnam with training and technical help to fight piracy, but so far the FBI has held only one training session, he said.
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