Registration of infringing company names is prohibited

On April 15 2010 the Vietnamese government passed a new law prohibiting the registration of company names which infringe a third party’s rights. Decree 43/2010, effective from June 1 2010, regulates the company registration procedure and provides that a company must not use a trade name, trademark and/or geographic indication belonging to another entity as its company name.
Although Vietnam’s IP Law makes provision for trade name infringement, resolving trade name disputes can be difficult. In practice, the infringer tends to rely on the fact that the relevant business licensing authority has approved the infringing trade name as a defence to infringement claims. At the same time, the business licensing authorities argue that they cannot assist rights holders, as there is no specific regulation granting them the power to intervene in these cases.
Under the decree, an IP rights holder can file a request with the relevant business licensing authority (usually the Department of Planning and Investment at a provincial level), drawing its attention to the infringing company name. The request must be supported by evidence of the holder’s rights in the name or mark (eg, a trademark registration certificate), as well as an expert opinion from the authorized body (eg, the Vietnam Intellectual Property Research Institute) confirming that the company name in question is infringing.
Within 10 days of receipt of the request, the business licensing authority must give notice to the infringer, requesting a change of company name and giving the infringer two months to comply with the requirement. If the infringer fails to comply within this period, the business licensing authority will send a notification to an enforcement authority (eg, the Inspectorate of Science and Technology) competent to handle the matter in accordance with the IP law.
Remedies for trade name infringement under the law include:
  • an order prohibiting the infringer from using the infringing company name;
  • a monetary fine; and
  • a temporary suspension of the infringer's business licence.
This new mechanism for resolving trade name disputes will be welcomed by rights holders in Vietnam. It sends a clear message to the business community that when choosing a company name, businesses must take steps to ensure that it does not infringe another entity’s IP rights. It is also further evidence of the government’s commitment to strengthen the position of rights holders in Vietnam.
However, the two-month period to comply with the business licensing authority's notice appears to be generous; arguably, a one-month period would be more appropriate. Further, the involvement of two authorities in the enforcement procedure is likely to cause delay and increase the rights holder’s burden, as it will be necessary to follow up with the business licensing authority and then with the enforcement authority. However, most infringers should respond positively to the initial request from the business licensing authority. In any event, the new law constitutes a significant boost for IP rights holders.
Han Le, Rouse, Ho Chi Minh

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