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THE IMPACT OF SARS ON ’s Economy

By Asia-Pacific Economic Cooperation

n the second quarter of 2003, the economy of Vietnam has faced several difficulties such as natural disasters, the war in Iraq and, particularly problematic, severe acute I respiratory syndrome (SARS). As in some other economies SARS has caused negative impacts on economic activities, especially and aviation. The tourism sector makes up about 3.4% of GDP in Vietnam. In 2002, around 2.6 million foreign tourists and business arrivals were registered. In the first quarter of 2003 the figure was estimated at 712.5 thousand, an increase of 11.4% compared to the same period in 2002. However, the number of foreign tourists and business arrivals went down immediately in April because of the SARS alert. In April the number decreased about 50% and in May about 75%, compared to the same period in 2002. Most travel tours, international conferences and business arrivals were canceled and/or postponed in April and May. The occupation rate of hotels with three or more stars went down, to between 20% and 30%. Tourism industry in Viet Nam lost inbound tours from ; ; , China; and as well as from other economies. The tourism industry’s turnover in the first six months of 2003 was 80% of that in the same period in 2002. The SARS alert has not only caused negative impacts on the tourism industry, but also on tourism-related services such as aviation, transportation, retail trade, restaurants, and hotels. Apart from negative impacts on the tourism industry and tourism-related services, the SARS outbreak has also had some negative impacts on the economy as a whole 1 Data about commercial and trade through the interruption of commercial and trade contracts and reduced business contracts are not confidence in economic prospects. However, in the case of Viet Nam, these impacts available in Viet Nam. seem to be insignificant.1 Fortunately, after recognizing the SARS outbreak Vietnam’s government immediately set up a government committee to control the SARS alert. It isolated all SARS patients, set the right treatment for patients, and more importantly cooperated with the World Health Organization (WHO) to warn people about SARS. The WHO has highly appreciated Vietnam because she has responded quickly and provided transparent information on SARS. Therefore, SARS has been controlled and stopped in Vietnam. As a result, Vietnam has managed to maintain rather high economic growth in the first seven months of 2003 compared to the same period of last year. The economic outlook for Vietnam in 2003 is expected to be bright compared to other economies in the region like Hong Kong, China; and Chinese Taipei. As in 2002, Vietnam’s GDP growth rate is driven by domestic consumption and , and a strong performance.

The performance of economic sectors is expected to be as follows:

* ’s performance should be maintained and damage caused by natural calamities should be repaired to ensure production continues. Gross output of autumn-

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paddy and winter-paddy is expected to increase by 25.5% and 2.0% respectively compared to the same period in 2002. Moreover, the fishery industry anticipates a record growth rate. It is estimated that fishery’s gross output in 2003 will reach about 9%. * Industry should show high growth rate compared to the same period in several previous years. Gross output of the sector for the first seven months of 2003 increased by 15.9%, of which the state-owned sector increased 12.1%, the domestic private sector 18.2% and the foreign invested sector 18.1% and is higher than that of previous periods (the same seven months’ growth in 2001 was 14.2% and in 2002 was 13.9%) and higher than the target of (14–14.5%). * The services sector also, remarkably, develops. Retail sales during the first seven months of 2003 reached the growth rate of 10.5% compared to the same period in 2002. In the business services sector is only the tourism turnover decreased (from April to June) due to the SARS alert. It recovered in July after the SARS outbreak was controlled. However, is still lower than that of the same period in 2002. Viet Nam’s tourism industry, together with has used new ways (e.g. reduction in prices, combination of tourist tours with airline travel, advertisement at the South East Asian Games) to attract foreign arrivals to Vietnam. It has also paid more attention to local travelers. The number of foreign arrivals is estimated to be about 2.2 million for 2003, slightly lower than last year’s. The value of for seven months estimated at US$11.4 billion, increased 27.9% compared to the same period in 2002. This increase is mostly because of the high growth rates of main exported commodities in terms of volume as well as of prices. The value of , estimated at US$14.1 billion, increased 34.4% compared to the same period in 2002. The high growth rate of imports is mainly a result of increasing imports of machinery, products, intermediate goods, and fertilizer-these products serve requirements of expending domestic production and of increasing exports. GDP growth rate for the whole year is expected to be about 7.2%, in the planned target range of 7.0% to 7.5% and is higher than the rate of 7.04% in 2002.

About APEC Asia-Pacific Economic Cooperation, or APEC, is the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia Pacific region. It is the only inter governmental grouping in the world operating on the basis of non-binding commitments, open dialogue and equal respect for the Contact Details: views of all participants. Unlike the WTO or other multilateral trade bodies, APEC APEC has no treaty obligations required of its participants. Decisions made Contact: APEC Secretariat within APEC are reached by consensus and commitments are undertaken Address: 35 Heng Mui Keng on a voluntary basis. Terrace, APEC has 21 members — referred to as “Member Economies”— which 119616 account for more than 2.5 billion people, a combined GDP of 19 trillion US Tel: +65 6775 6012 dollars and 47% of world trade. It also proudly represents the most Fax: +65 6775 6013 economically dynamic region in the world having generated nearly 70% of URL: www.apec.org global economic growth in its first 10 years.

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DEADLINE STRATEGIES FOR US PATENT APPLICATIONS

by Dennis Fernandez & Mengfei Huang

eadlines pose a huge threat in the legal industry where human errors, although unavoidable, often become highly consequential when it comes to a client’s D IP rights. Last year, missing a patent filing deadline cost Fish & Richardson US$30 million in a case against client Kairos Scientific Inc. Now in a suit filed by Deposition Sciences Inc, the former Crosby, Heafey, Roach & May face a similar predicament in missing a filing deadline, a mistake that DSI claims caused it to lose its patent rights in eight European countries.1 In the US, applicants have a 1-year grace period after public or private disclosure of the invention to file a patent application. Such disclosures include “offers for sale” of the technology, regardless of whether or not the product has be been built or prototyped. On the international scene, however, many industrialized jurisdictions including and several European countries adhere to international regulations, which do not give applicants the benefit of a one-year grace period. Thus, in these jurisdictions, one must file an application before one discloses his invention to the public. In either situation it is highly advisable for applicants to file early. Foreign filing can be done directly through the foreign patent office under the Paris Convention, resulting in a more rapid patent issuance and possibly a less expensive process. However, foreign filing is often initiated under the Patent Cooperation Treaty (PCT) because applicants using the PCT route can delay filing in foreign offices for up to 31 months from the US filing date. While the overall cost might be higher with the PCT, payment for foreign patents can be delayed considerably. Even though most countries are members of both the Paris Convention and the PCT, it is advisable to ascertain the membership of relevant countries as early as possible. In the US, the one year grace period is not extendable, and the anniversary date from first disclosure is an absolute bar date. Thus, it is critical that owners of IP file their US application prior to this date. The only exception that may justify late-filing would be a recent modification of the invention that differentiates it from the earlier disclosed idea. A company could legally argue that this modification or improvement actually constitutes the invention, and thus is not late. However, companies should not rely heavily on this strategy because by missing the one-year mark, the company loses its rights to the broader concept originally disclosed, and must instead limit the scope of the patentable idea by filing a patent application for a narrower invention. After filing a non-provisional application, there are various due dates that one needs to know. After receiving an official action from the Examiner, the applicant usually has three months to respond to an office action from the USPTO. However, applicants can pay extension fees to extend that deadline up to six months, after which the patent application will be abandoned. Remedial action must then be taken to revive the application. First the applicant and law firm must determine whether the

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abandonment was unavoidable or unintentional. An unavoidable abandonment can arise from circumstances such as non-negligent miscommunication between the firm and the client, whereas unintentional abandonment includes most errors resulting from negligence, such as a clerical error. Where abandonment was unavoidable, a petition demonstrating that the abandonment was unavoidable, as well as a petition fee of currently US$110 (US$55 for small entities, which have less than 500 employees) must be submitted to revive the application.2 Reviving an unintentional abandonment requires the petitioner to simply state that the entire delay in filing the reply was unintentional, however at a significantly larger petition fee of US$1,330 (US$665 for small entities).2 As part of the reparations for abandonment in both situations, the applicant must also file a terminal disclaimer, agreeing to an adjustment of the patent term, accounting for the earlier delay in continuing prosecution; the adjustment thereby reduces the full term (See Fig. 1) by the equivalent period of the application’s abandonment.2

Fig 1. Patent Prosecution Timeline showing the full 20-year patent term

Oftentimes, in order to comply with the one year anniversary from the disclosure date in the US, companies that are coming close to the bar date might find the “quick and easy” nature of provisional applications to be more advantageous than filing a non- provisional application (a regular application). As a simple, inexpensive version of a regular non-provisional patent application that sometimes can be drafted by the client, a provisional does not require claims or a declaration, but still allows the applicant to claim an early priority date for any subsequently filed applications. The provisional has the benefit of an additional priority year separate from the 20-year patent term, giving companies an opportunity to extend their patent terms, which can prove highly lucrative in drug industries, for example, where patents are most valuable at the end of their terms. Establishing an early priority or filing date has strategic value by preventing the development of prior art against the applicant’s case from later publications or other disclosures. In addition, R&D projects usually develop over time, so a provisional would not only defer examination of the invention for up to a year, but also circumvents the need to wait for a technology to be fully developed. With in a year, a series of provisionals can be filed after each new technical development. The non-provisional consequently claims priority to each provisional, thus obtaining the earliest possible priority dates for each development in the invention.

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By petitioning, a provisional can also be converted into a regular application, instead of filing a separate non-provisional within the 12-month pendency period. However the patent term resulting from such a conversion will be measured from the filing date of the provisional. Considered as a regular national filing, a provisional only establishes a domestic priority date for the later filed regular application. Thus, the applicant has twelve months from the filing date to file an application abroad or under the PCT to preserve priority rights. In the absence of a later-filed non-provisional application, the provisional expires after its 12-month pendency period. The tactical value of provisional applications makes it good strategy for highly competitive industries; however, the applicant’s legal rights to priority are only as good as the priority document. A poorly written provisional can provide a dangerous false sense of security, when in fact the applicant’s patent rights are not protected. Like late- filing exceptions, the provisional application offers a possible strategy to ensure one meets application deadlines; however, as shown, these tactics also entail disadvantages and risks for the applicant’s patent rights. Unless greater strategic value may be gained, it is legally advisable to avoid such risks by filing a regular application as early as possible and to adhere to regular USPTO deadlines.

1See Brenda Sandburg, Suit Contends Crosby Heafey Botched Paten, The Recorder, 28 April 2004. 2See The Handbook on Patents and the Patent Process: Volume I, 2002.

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