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How to Protect Your Products in Vietnam

South-East Asia IPR SME Helpdesk

Tran Manh Hung

June 6, 2017

6 June 2017 Copyright © 2017 South-East Asia IPR SME Helpdesk.

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• Tran Manh Hung leads the Firm’s Intellectual Property Practice in Vietnam. Under his influential leadership, the Firm has consistently been voted the top IP law firm in Asia by PLC Which lawyer? and most recently one of the top patent practices in Vietnam by Asia IP for 2016. Ranked as a leading lawyer by Chambers Global and Chambers Asia, Hung has successfully represented some of the world’s largest multinational companies in contentious and non-contentious aspects of IP law, including patents, designs, trademarks, copyright, unfair competition, anti-counterfeiting, anti-piracy, domain names, commercial IP involving franchising and licensing arrangements, trade secrets, and technology.

• As a respected and highly recommended advocate for IP rights, he continues to successfully represent leading international companies regarding a broad range of IP related matters. He has worked closely with Vietnamese government authorities to vigilantly enforce IP rights and obtain an IP registration in Vietnam for a new and highly contentious drug manufacturing technique. He has also been called upon by the Vietnamese Government to help review and revise the country's IP Law and the Criminal Code's IP provisions.

• In addition to authoring several publications, Hung has orated on various aspects of IP matters in Vietnam, Hong Kong, Tokyo, Austria, U.K., and the US. He speaks regularly at IP/franchising workshops and seminars, and lectures to law students on lawyering skills at Hanoi Law University, Diplomatic Academy of Vietnam, Hanoi Foreign Trade University, and the MBA Program for CFVG. He was also the Chairman of the Legal Committee of the American Chamber of Commerce (Hanoi Chapter).

• Hung has been ranked as the Strongly Recommended IP Lawyer by Global3000, as well as receiving high recognition by Asialaw, and Managing IP Asia. He was featured as the leading lawyer by Vietnam Central Television. He received the award “Lawyer of the Year” from the Vietnam Lawyers' Federation, the Ministry of Justice and Legal Magazine. Hung was listed in the 2015 edition of Who's Who Legal in the field of Franchising.

• Hung has been practicing law in Vietnam since he graduated from Hanoi Law University in 1995 with an LL.B. in Economic Law. In 2000 he received his LL.M. in International Economic and Business Law from Kyushu University (Japan) under a scholarship from the Japanese Government.

• He speaks fluent English and Vietnamese and is proficient in Japanese.

Tran Manh Hung

Principal Partner

BMVN International LLC

+84 4 3936 9398

[email protected]

Speaker’s bio

mailto:[email protected]

1. IP Legal Framework

2. Acts of IP infringement

3. Overview on IP Enforcement Law in Vietnam

4. Best Practices

5. Legal Update

6. Case Study

Main contents



1. IP Legal Framework



IP Legal framework



Copyright and

related rights

Industrial property

Right to plant

varieties

• Work

• Performances, audio and visual fixation, and broadcasts and satellite signals carrying coded programmes

•Patent

•Industrial designs

•Trade secret •Trademark

•Trade name

•Geographical indication

•Design of semi-conducting closed circuits

•Plant varieties

• Main legislation: • Law on Intellectual Property

• Main guiding Decrees • Copyright: Decree 100/2006/ND-CP, 85/2011/ND-CP

• Plant varieties: Decree 88/2010/ND-CP, Decree 98/2011/ND-CP

• Industrial Property: Decree 103/2006/ND-CP, Decree 122/2010/ND-CP

• Main international treaties /conventions

• TRIPS

• Berne Convention

• Paris Convention

• Madrid Agreement

IP Legal framework



2. Acts of IP Infringement



• Copyright infringement

• Industrial property infringement (patent infringement, ID infringement, trademark infringement, trade secret infringement,…)

Acts of IP Infringement



Unauthorized Use of an IPR

Other acts of infringement

e.g. Bypassing TPMs in copyright, unauthorized collection of a trade secret. Fair Use

• Trademark infringement products may either be in the form of “infringing goods” or “counterfeit”.

Art. 213: Counterfeit mark goods means goods or their packages bearing a mark or sign which is identical with or indistinguishable from a mark or geographical indication currently protected for those very goods, without permission from the mark owner or organization managing the geographical indication.

Infringing goods vs. Counterfeit goods



Infringing goods



Counterfeit goods



3. Overview on IP Enforcement Law in Vietnam



Enforcement measures for IP right holders



Criminal prosecution

Administrative Sanction

Customs cooperation

Civil enforcement

Trademark Offences that are handled under administrative procedures



Offences Sanction

Principal Additional

Production, import, trading,

transportation or storage for

sale of trademark infringement

goods.

• Warning; or

• Fine between VND 500,000 and

500 million (approx. EUR 19 –

19686)

• Seizure of infringement products and

materials/equipment

• Suspension of trading in infringing

goods or services, between 1 and 3

months.



sale of counterfeit trademark

goods

• Fine between VND 4 million and

500 million (approx. EUR 157–

19686)


materials/equipment

• Suspension of trading in infringing

goods or services, 1 and 3 months;

and/or

• Confiscation of material evidence and

means used in the commission of

violations.



sale of stamps, labels or

articles bearing counterfeit

marks

• Warning; or

• Fine between VND 500,000 and 60

million (approx. EUR 19 – 2362)


materials/equipment.

Criminal prosecution



Note: Currently, criminal penalties are not applicable to organizations, such as corporate entities. However, the new Penal Code which may be adopted by the National Assembly in a few years may provide for criminal penalties on organizations.

Offence Penalties

Intentionally infringe upon

industrial property rights to

marks currently under protection

in Vietnam on a commercial

scale (Art.171 – the Penal Code

- Law No. 15/1999/QH10

amended and supplemented by

Law No. 37/2009/QH12)

Principal penalties • Fine between VND 50 million and 1 billion (appox. EUR 1968 –

39372) or • Non-custodial reform for up to 2 years; or

• Prison term of between 0.5 and 3 years.

Additional penalties • Fine between VND 20 million and 200 million (appox. EUR

787– 7874) ; and/or • Ban from holding certain posts, or practicing certain

professions, or performing certain jobs, between 1 and 5

years

Civil enforcement



• Loss and damage caused by acts of infringement of industrial property rights comprise of material loss and “spiritual loss”

• Can a trademark owner claim for “spiritual loss”?

Enforcement authorities



Enforcement Agencies Criminal enforcement authorities: Police, Prosecution Institutions, and Criminal Courts Administrative enforcement authorities: MMB, MOST, Customs, Police, People’s Committee Civil Courts

Powers of seizure • trademark infringement goods; • raw materials, materials and means mainly used for

producing and trading those goods.

Powers of disposal

4. Best practices





Prevention – Detection - Response

Prevention

Detection Response

• Register core IP rights

• Trademark: register marks as in use

• Conduct clearance searches

• Monitor Official IP Gazettes to be aware of potential conflicting marks / potential oppositions

• Audit the trademark portfolio regularly

• Aware of non-use vulnerability



Prevention

• Always keep eyes on the marketplace

• Perform searches for products using online platforms

• Utilize market surveys for a holistic picture

• Customs recordal: monitoring the exportation/importation of goods bearing the trademark.

Detection



• Administrative actions is preferable for low value cases

• For counterfeit: request for enforcement • Counterfeits for cosmetics, foods, etc. are subject to higher sanctioning levels.

• For infringement: need to obtain VIPRI's opinion to confirm the infringement. Next course of action: to send a C&D letter or request for raid action.

• Criminal sanctions can be considered for large scale counterfeiters.

Response



5. Legal update



Penal Code 2015



• No “commercial scale” threshold

Art. 226.1 : A person who intentionally infringes upon industrial property rights to a brand name or geographical indication protected in Vietnam and earns an illegal profit of from VND 100,000,000 to under VND 300,000,000 or causes a loss of from VND 200,000,000 to under VND 500,000,000 to the owner of such brand name or geographical indication, or with the value of infringing goods at from VND 200,000,000 to under VND 500,000,000

• Criminal sanctions on culpable corporate entities

Art. 226.4.a: Any corporate legal entity that commits an offence specified in Clause 1 of this Article despite the fact that it previously incurred a civil penalty or has a previous conviction for the same offence which has not been expunged shall be liable to a fine of from VND 500,000,000 to VND 2,000,000,000 […]

EU- Vietnam Free Trade Agreement



• The EU-Vietnam Free Trade Agreement (EVFTA) was signed on 02 December 2015.

• Expected to take effect from the beginning of 2018.

• EU’s innovations, artworks and brands shall be better protected against infringement through stronger enforcement provisions in Vietnam.

• High focus of Geographical indications: • Vietnam will recognize and protect 169 GI from EU.

• The EU will recognize and protect 39 GI from Vietnam.

6. Case Study



• A Korean company engaged a number of OEM factories in Vietnam to produce jackets bearing the M trademark, and export all those jackets back to Korea.

• While the Korean company is the owner of the M trademark in Korea, a French company is the registered owner of the trademark in Vietnam.

• The French company claimed that the Korean company’s factories, by producing M -branded jackets in Vietnam, has infringed upon their trademark rights.

• The MOST ruled that under the TRIPS Agreement, a primary function of trademark is to protect customers from confusion, but the Korean company’s factories export all products to Korea and hence, customers in Vietnam are not aware of those products. Therefore, the local factories' production activities do not cause a likelihood of confusion to Vietnamese customers, or an actual damage to the French company.

OEM for exporting



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