MOST issues new circular on sanctions for industrial property infringement

Vietnam

On June 26 2015 the Ministry of Science and Technology of Vietnam (MOST) issued Circular No 11/2015/TT-BKHCN (Circular 11), which provides detailed guidance for the implementation of Decree No 99/2013/ND-CP on the Sanctioning of Administrative Violations in the Field of Industrial Property (Decree 99), which has been in force for almost two years.

The long-awaited circular provides further guidance regarding the measures and procedures for sanctioning administrative violations in the field of industrial property. The main changes include the following:

  1. Forfeiture of material evidence and means used for committing infringement - this measure can now apply only to wilful infringement and if it is necessary to prevent material evidence and means used for committing infringement from being dispersed or altered, or to minimise the possibility of subsequent infringement being carried out. In practice, however, it is not always easy to prove that infringement is wilful.

  2. Infringement on the Internet: the circular clearly sets out that infringement on the Internet that is “aimed at consumers or information users in Vietnam” shall be treated as infringement taking place in Vietnam. This is a very encouraging provision but, in practice, it is not always easy to establish that an infringement on the Internet is actually aimed at consumers or information users in Vietnam.

  3. Infringement of well-known trademarks: enforcement authorities, when handling the infringement of a well-known trademark, may rely on their own assessment of whether the infringed mark is well known based on evidence submitted by the brand owner and the criteria defining a well-known trademark under the Intellectual Property Law. However, in practice, enforcement authorities rarely make the decision by themselves. Previously, a mark could be recognised as well known only through a decision of the court following time-consuming litigation proceedings or a decision of the National Office of Intellectual Property (NOIP) following a recordation procedure, which, to date, is not yet applicable. Circular 11 now provides that, when handling a case concerning the infringement of a potentially well-known trademark, an enforcement authority may seek expert opinions from the NOIP and/or seek opinions from a Consultation Council (it is assumed that this would be on a case-by-case basis) to determine whether a trademark is well known. This procedure will hopefully lead to more effective sanctions for infringement of well-known trademarks. 

  4. Unfair competition relating to '.vn' domain names:

  • Under the former regulation, the following constituted an act of unfair competition that could be sanctioned:

  1. Use of a '.vn' domain name containing words that are identical with, or confusingly similar to, a protected trademark, trade name or geographical indication, for and in connection with the advertisement, introduction or offering of identical, similar or related products or services on the website linked to the domain name, thereby creating confusion, causing material damage or diminishing the goodwill of the owner of the protected trademark, trade name or geographical indication.

  2. The registration of a '.vn' domain name containing words that are identical with, or confusingly similar to, a protected trademark, trade name or geographical indication, where, after more than one year from the date of registration, the domain name has not been used for a specific activity, and there is reason to believe that the registrant has registered the domain name with the aim of reselling it for profit or blocking the registration of the domain name by the owner of the relevant IP rights.

    Circular 11 also specifies that the two abovementioned cases are acts of unfair competition. However, in the second case, the requirement to prove that the domain name has not been used for more than one year from registration has been removed. Nevertheless, the complainant will still have to prove that the domain name registrant has not used the domain name and that it seeks to resell it for profit or to prevent the brand owner from registering it.

  • Under Circular 11, the complainant is no longer required to prove the widespread and continued use of the related trademark, geographical indication or trade name for “legitimate business activities in Vietnam”, as long as the related mark, geographical indication or trade name has been used widely and continuously overseas, and the goodwill and reputation of the rights holder and goods or services bearing the related mark, geographical indication or trade name is known to consumers in Vietnam.

  • Under Circular 11, a failed “negotiation for settlement with reasonable conditions” with the domain name registrant is no longer required before filing a complaint. Instead, the rights holder is now required to first send a cease and desist letter to the registrant. This may constitute an impediment to taking action against infringing domain names because, in practice, it is not always possible for rights holders to obtain the contact information of the registrant to send a cease and desist letter. In addition, the service of a cease and desist letter will not be effective if the registrant changes the status quo or transfers the domain name to a third party, because there is no provision preventing it from doing so.

The circular introduces a number of improvements with regard to the handling of industrial property infringement in Vietnam. However, there are still significant issues that may constitute obstacles for rights holders seeking to protect their industrial property rights against infringement.  

The circular came into effect on August 11 2015, replacing Circular 37/2011/TT-BKHCN on the implementation of Decree No 97/2010/ND-CP of September 21 2010 on Sanctioning Administrative Violations in the Field of Industrial Property.

Son Doan, IPMAX Law Firm, Hanoi

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