New procedure for co-ordination in handling cybersquatting cases

Vietnam

On December 27 2011 the Ministry of Science and Technology of Vietnam issued Circular 37/2011/TT-BKHCN (Circular 37), which provides detailed guidance for the implementation of Decree 97/2010/ND-CP (Decree 97) on the Sanctioning of Administrative Violations in the Field of Industrial Property (which became effective over a year ago). Among other important changes, the new circular introduces a detailed procedure for the co-ordination of the activities of the IP rights enforcement authorities and the Vietnam Internet Information Centre (VNNIC) - the authority managing '.vn' domain names - when handling IP infringement cases involving domain names.

Domain name registrations in Vietnam are granted on a first-come, first-served basis. It is usually very difficult for owners of well-known trademarks to take actions against infringing '.vn' domain names. Many actions or attempts to recover '.vn' domain names (eg, 'ebay.com.vn', 'ibm.com.vn' and 'heineken.vn') from cybersquatters have been unsuccessful.

Under the IT Law, disputes over '.vn' domain names must be settled through:

  • negotiation and mediation;
  • arbitration; or
  • the courts.

However, alternative dispute resolution proceedings are non-binding on the parties, so such proceedings will be ineffective without agreement from the domain name registrant. Accordingly, the only option available under the IT Law is to bring a court action against the cybersquatter.

Decree 97 clearly established the power of the IP enforcement authorities (eg, the Inspectorate of Science and Technology and the Competition Administration Bureau) to take administrative action against infringers for "registering or… using a domain name identical with, or confusingly similar to, a protected trademark of another person... that one does not have the right to use, for the purpose of possessing the domain name, or appropriating or prejudicing the reputation and goodwill of the mark …” . According to the decree, infringing domain names must be revoked.

Circular 37 specifies that the following will constitute an act of unfair competition that can be sanctioned:

  • 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.
  • 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 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 to resell it for profit or to block the registration of the domain names by the owner of the relevant IP rights.

Under the procedure introduced by the circular, the IP enforcement authorities, upon receipt of a complaint from the IP rights owner, and based on the results of its own inspection, may issue one of the two following documents:

  • A conclusion as to whether the domain name is identical with, or confusingly similar to, a protected trademark, trade name or geographical indication, and whether the registration or use of the domain name constitutes an act of unfair competition. If it is concluded that an act of unfair competition has been committed, the IP enforcement authority will send its conclusion to the IP rights owner and the domain name registrant, so that they can reach a solution acceptable to both parties, within 30 days of the date of receipt of the conclusion. If the parties cannot reach an agreement within this time limit, the IP enforcement authority will conduct a further inspection and issue a decision of administrative sanction.
  • A decision of administrative sanction against the infringer, which can include the revocation of the domain name.

If a decision of administrative sanction has been issued, and if the domain name registrant does not voluntarily withdraw the domain name within one year of the date of issuance of the decision, the IP enforcement authority will send a notification to VNNIC requesting that the domain name registration be revoked.

It is encouraging that the circular introduces a detailed procedure for the co-ordination of the activities of the IP rights enforcement authorities and VNNIC, and that actions against cybersquatting can be carried out in practice. However, the procedure is complicated and time consuming; it may take over two years from the date of registration of an infringing domain name to obtain its revocation. In addition, a number of uncertainties remain as to when the use or registration of a domain name will constitute an act of unfair competition. For example, it is unclear what type of evidence would be required to prove that a party registered a domain name to make a profit or to prevent the IP rights owner from registering the domain name.

The circular will come into force on February 11 2012. Until the new procedure can show its effectiveness in promoting actions against the bad-faith use and registration of domain names, the registration of '.vn' domain names is still the most-cost effective way - in addition to trademark registration in Vietnam - for mark owners to protect their trademarks from cybersquatting.

Son Doan, IPMAX Law Firm, Hanoi

Get unlimited access to all WTR content