Bad faith (Malicious) – a legal basis for trademark opposition or invalidation in Vietnam

“Bad faith” is a legal term that was added to Articles 96 and 117 of Vietnam’s amended IP Law in 2022 in order to address the following issues: (i) to close legal loopholes that had been identified from the “first-to-file” principle – a mechanism that grants protection titles to the those earliest filed trademark applications, including those made in bad faith and (ii) effectively curbing trademark squatting – a growing trend in emerging economies like Vietnam. With the provision of “bad faith,” a legitimate trademark owner has an additional important legal basis to challenge the validity of a trademark filed or registered by a third party in bad faith (with malicious intent) in order to regain its trademark rights under trademark opposition or invalidation proceedings.

The elements, criteria, and requirements that must be met to determine whether a trademark has been filed/registered with “bad faith” (malicious intent) will be detailed in legal documents such as decrees and/or guiding circulars of Vietnam. In fact, “bad faith” is a key legal basis in the laws of many jurisdictions throughout the world to prevent the abuse of the “first-to-file” principle for trademark squatting or trademark appropriation, intellectual property theft, particularly with respect to well-known and recognized trademarks.

An applicant is presumed to have filed a trademark application in bad faith/on a dishonest basis under the IP laws of numerous jurisdictions throughout the world under the following circumstances:

Copying, imitating or translating another party’s well-known trademark;

Registration in bad faith of a trademark that has been utilized by another party and exerts certain influence;

Registration of a trademark which violates the previous rights of another party;

The organization or individual acting on behalf of the trademark proprietor files a trademark application in his or her own name with no authorization;

Any natural person, entity or other organization wishing to gain the exclusive right to use the mark for its goods or services in the process of production and business activities needs to file a trademark application with the trademark office. An application for a trademark registration in bad faith filed with the intention of not being used is not allowed for protection.

Previously, Vietnam’s IP legislation did not identify “bad faith” as a legal basis to refusing a trademark application or invalidating a registered trademark. Consequently, there is no ground for handling trademark applications in bad faith (e.g., abuse of reputation, unfair competition, etc.). Due to the lack of specific regulations on “bad faith”, Vietnam’s trademark opposition and/or invalidation rulings have become dubious. In most circumstances, “bad faith” evidence is only accepted when there is clear proof that the applicant was aware of the legitimate owner’s trademark through a business relationship (such as sales/purchase contracts, agency contracts, etc.). The proliferation of trademark squatting for illicit profit has been fueled by the absence of legislation against bad faith of the applicant. A person resident in Ho Chi Minh City, for instance, filed roughly 200 trademark applications, the majority of which were for well-known trademarks of foreign trademark owners, and many of the applied-for trademarks were granted protection. Obviously, the “first-to-file” principle has been abused negatively by third parties to register for trademark appropriation of the legitimate trademark owners, particularly for well-known brands. As a result, numerous trademark owners either lost their trademarks, were forced to purchase back their own brands, or were compelled to abandon the Vietnamese market.

By Nguyen Vu QUAN

Partner & IP Attorney

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