South-East Asia IPR SME Helpdesk

Case study 12 - IP infringement by using confusingly similar marks in Vietnam

Background: 

A Dutch company used its trade mark ‘XXXX-LON’  registered in Vietnam for a wide range of products and services and it entered into a licensing contract with its subsidiary in Vietnam (the Subsidiary), whereby the Subsidiary is authorized to use the trade mark ‘XXXX-LON’ for steel frames and other steel products under Class 06.

The Subsidiary discovered that many companies in Vietnam have been trading and marketing some construction materials similar to their products and called them ‘XXXX-LINE’, which sounded very similar to its trade mark ‘XXXX-LON’.

After investigating, the Subsidiary found out that it was one of its previous Vietnamese sub-contractors (the Vietnamese Company) to have filed an application for registration of the trade mark ‘XXXX-LINE’ for services under Class 35: "Trading in metal sheets" and Class 42 "Processing metal sheets", and marketed their products, including aluminum sheets, steel sheets, steel ceilings, aluminum ceilings and steel frames, as ‘XXXX-LINE’.

Action taken:

The Subsidiary twice requested an inspection at the Vietnam Intellectual Property Research Institute (VIPRI) under Vietnamese Ministry of Science and Technology, as it was aware that according to Vietnam Intellectual Property Law, IPR holders and other related organizations and individuals have the right to request an IP inspection to protect their legitimate rights. After conducting the inspection, VIPRI concluded that the sign ‘XXXX-LINE’ used by the Vietnamese Company in the market for its steel frames was confusingly similar to the protected trade mark ‘XXXX-LON’ of the Subsidiary.

After that, based on the above inspection results, the Subsidiary requested the Market Surveillance Authority to handle the case against the Vietnamese Company for administrative violation.

The Vietnamese Company, however, claimed that they had applied for registration of the trade mark ‘XXXX-LINE’ at the National Office of Intellectual Property (NOIP) and that since there was an ongoing dispute concerning the trade mark registration, they requested the Market Surveillance Authority to suspend the handling of the case.

Outcome:

  • According to Article 51 of Decree No. 119/2010/ND-CP, a written inspection result is one of the sources of evidence for the competent agency to handle the case. Written inspection results cannot be considered as proof of infringement or as decision to end a disputes. Therefore, the two inspection results issued by VIPRI can only be considered as an expert opinion on the similarity of the two marks in question. The final conclusion whether the sign ‘XXXX-LINE’ is infringing the trade mark ‘XXXX-LON’ still relies under the authority of the Market Surveillance Authority.
  • In relation to the argument of the Vietnamese Company according to which since they had applied for registration of the trade mark ‘XXXX-LINE’ at NOIP, under Class 35 and 42 is not related to the protected trade mark ‘XXXX-LON’ for goods under Class 06. As requested by the Market Surveillance Authority, NOIP officially confirmed that there was no dispute concerning the registration of trade marks ‘XXXX-LON’ and ‘XXXX-LINE’. Therefore, the Market Surveillance Authority continued to inspect the Vietnamese Company without any suspension.
  • During on-site inspection, the Market Surveillance Authority found numerous aluminum frames affixed with the sign ‘XXXX-LINE’ in the warehouses of the Vietnamese Company, valued VND 50 million (approx. EUR 2,000). The Subsidiary proposed to determine the quantity of infringing products based on the actual value of commercial contracts signed possibly worth billions of VND. However, the proposal was refused because so called “on-the-spot evidence” were only goods directly related to the infringement at the time of inspection, hence, goods which have been sold before the inspection are not considered as “on-the-spot evidence”.
  • The Subsidiary also complained for not being able to participate to the inspection at the Vietnamese Company’ warehouse. The request to participate to the inspection was rightful as the law stipulates that industrial property right holders have the right to do so. However, the laws also provide that the competent agency has the discretion whether to permit the participation and this complaint was not considered relevant.
  • After the inspection, the Vietnamese Company appealed the inspection minutes and asked for a review. This appeal is rightful according to laws. However, the inspection minutes were kept unchanged after the appeal.

IP Lessons:

  • Consider registering your trade marks in Vietnam to make sure that it is legally protected in the countries you are operating in. Once they are registered, it would be possible to fight infringements and enforce your rights.
  • Protect your IP by using contracts when dealing with local partner such as your local subcontractors and keep all records in writing.
  • South-East Asia, being comprised of developing economies and changing laws, and being a prolific global manufacturing hub, is currently a challenging arena for IPR enforcement. EU SMEs seeking to protect their IP rights in the South-East Asian region shall consult with legal service providers with local expertise who would be able to navigate the legal and operational considerations in place in the country in order to best serve their needs for enforcement.
  • Understanding of local practice is also very important to achieve successful results in IPR enforcement and reassess expectations in terms of damages.
  • Each EU SME will have different IPR enforcement needs, and the efficient communication of these needs, a clear understanding of both the legal and commercial outcome sought by the company, and quick access to updates on the region’s changing laws, will be key in protecting IP in South-East Asia.

 

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