Case study 13 – Customs seizures of goods suspected of IPR infringement in Vietnam
A German company, owner of a trade mark (“XXX”) protected in Vietnam since 1995 for uninterruptible power supplies, suspected that a consignment infringing its trade mark was being shipped to Hai Phong Port in Vietnam. The shipment contained a large amount of uninterruptible power supplies bearing the sign “XXX-UPS’’, imported by a local company (the Vietnamese Company).
The German company authorized a local law firm to act as its IP representative to request the Customs Department of Hai Phong City to postpone customs clearance for the shipment in question. According to Vietnamese Law on Intellectual Property, the organisation or individual requesting the postponement of customs clearance has to fulfil the obligations as below:
- To prove that they are IPR holders;
- To supply sufficient information to identify goods suspected of IPR infringement or to detect goods showing signs of IPR infringement;
- To file written requests to customs offices and pay the fees and charges as prescribed by law;
- To pay damages and other expenses incurred in cases where the controlled goods are found not infringing IP rights.
Once the above obligations were fulfilled by the German company, Customs issued a decision to postpone clearance for the shipment in question. The time limit for postponement of customs clearance is 10 working days from the day on which the customs office issues the decision. In case the requester has a plausible reason for postponement, this time limit may be extended but must not exceed 20 working days (provided the requester pays an additional sum of money for guarantee).
Immediately after the customs clearance postponement, the German company, the shipper and the customs office proceeded to unload the consignment to compare both marks. The suspected sign “XXX-UPS” was found printed as one word but was deliberately presented to make consumers think that it is a combination of two words because “XXX” was in red colour while “UPS” was in yellow colour. Besides, “UPS” is the abbreviation of the product “Uninterruptible Power Supplier”. Therefore, “UPS” does not play a role in distinguishing the brand. Besides, although the trade mark consists of both text and graphics, the text is prominently displayed, readable and thus becomes the main component of the mark. Hence-forth, it can be concluded that the goods imported by the Vietnamese Company were bearing counterfeit marks.
Specific fines for the import of goods bearing counterfeit marks are based on the value of the goods bearing the mark. Additional penalties may be:
- Suspending the trading of infringing goods and services from 1 to 3 months; and
- Forced re-exportation of the infringing shipment.
However, in case of expiration of the prescribed time limit, if the German company does not initiate civil lawsuit and Customs do not decide to handle the case according to the procedures for handling administrative violations committed by the Vietnamese Company, Customs bears the responsibility to:
- Continue customs clearance for the shipment; or
- Force the person requesting the postponement of customs clearance to compensate the owner of the whole shipment for damage due to improper postponement of customs clearance and payment of expenses for warehousing, goods preservation and other incurred expenses for the customs offices and other concerned parties.
- The trade mark regimes in South-East Asia are generally understood to adopt the ‘first-to-file’ system, which means that the first person to file a trade mark application in a particular South-East Asia country will own that right in this country once the registration is granted. Hence, take steps to register your trade mark as soon as possible to ensure you own your legitimate rights in case of potential disputes in the future.
- Seek the advice of a local lawyer or trade mark agent to ensure adequate protection of your trade marks in relevant classes. Understanding of local practice in trade mark registration and enforcement is also very important to achieve successful results in IPR enforcement.
- EU SME may consider different avenues for IPR enforcement according to the specific case and needs. Do consider customs seizures for counterfeit items that are already known to be sourced from outside the country or exported to another country to protect your mark against infringements. Customs seizures allow you to seize counterfeit goods in bulk and from the source, prior to distribution.
- Customs seizures is available in Vietnam and also many other jurisdictions in South-East Asia. EU SMEs shall consult with a local lawyer to understand customs seizure procedures and liabilities.