Genuine Goods, Trademark Infringement: The Rule One Proteins Victory in Vietnam

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Selling real products doesn’t automatically give you the right to advertise using someone else’s trademark. The Rule One Proteins case in Vietnam clearly demonstrates this important principle of intellectual property law. This case, in which KENFOX IP & Law Office successfully represented the trademark holder, shows that even when the goods are genuine, unauthorized use of the trademark for advertising and sales is infringement.

Background: Rule One Proteins and the Vietnamese Market

Rule One Proteins, LLC (RULE ONE), a US-based company with roots tracing back to the founders of the renowned Optimum Nutrition (ON) brand, has established itself as a leader in the sports supplement industry. Their “RULE 1 PROTEINS” brand enjoys significant popularity in Vietnam, recognized as a best-selling supplement, especially for muscle milk products. This success has led to numerous Vietnamese companies importing and distributing genuine Rule One Protein products.

However, Muscle Up Joint Stock Company (Muscle Up), a Vietnamese company, while dealing in genuine “Rule 1 Proteins” products, found themselves on the wrong side of intellectual property law. They were advertising and offering these genuine products for sale on their website using the “RULE 1 PROTEINS” trademark – all without authorization from RULE ONE.

The doctrine of exhaustion vs. the right to “use” a trademark

Many businesses operate under the assumption that purchasing genuine products grants them a free pass to promote and resell those goods as they see fit. This often stems from a misunderstanding of the “doctrine of exhaustion” in IP law. This doctrine, also codified in Vietnamese IP law, states that once a trademarked product is lawfully placed on the market (even internationally in many cases), the trademark owner’s control over its subsequent distribution is exhausted. This allows for the free resale of genuine goods and prevents trademark owners from unduly restricting parallel imports.

However, the crucial distinction lies in the act of “using” the trademark, particularly for advertising purposes. Vietnamese IP Law clearly defines “use of trademarks” to include advertising goods bearing the protected mark. Crucially, the law stipulates that only the trademark owner or those with their consent have the right to “use” the trademark.

Muscle Up’s misstep and VIPRI’s initial misjudgment

Muscle Up, in their efforts to boost sales of genuine Rule One Protein products, took the common step of creating website listings with product images and descriptions featuring the “RULE 1 PROTEINS” trademark. They believed that selling genuine goods exempted them from any infringement claims.

KENFOX IP & Law office submitted a request with the Vietnam Intellectual Property Research Institute (VIPRI) for “expert opinions” (assessement conlcusion on trademark infringement likelihood). Initially, VIPRI seemed to lean towards the above common misconception. Their initial assessment concluded that if Muscle Up was indeed selling genuine products, then their advertising activities would be considered “legal acts” and not infringing. VIPRI’s first conclusion essentially hinged infringement solely on the counterfeit nature of the goods.

KENFOX IP & Law Office corrects the course

KENFOX IP & Law Office, representing RULE ONE, recognized the flaw in VIPRI’s initial assessment. They expertly petitioned VIPRI for a re-assessment, arguing persuasively that the act of “advertising” constitutes “use of the trademark” and requires authorization, regardless of the product’s authenticity. They highlighted that advertising falls outside the exhaustion principle concerning the mere circulation of lawfully marketed goods.

KENFOX successfully argued that allowing unauthorized advertising, even for genuine products, would severely undermine the trademark owner’s control over their brand image and value. Imagine countless dealers freely using a trademark for advertising – it would create confusion, potentially mislead consumers into believing these dealers are officially authorized, and ultimately erode the trademark’s exclusivity and reputation.

Victory and voluntary compliance

VIPRI, convinced by KENFOX’s compelling arguments and legal grounds, reversed their initial conclusion. They confirmed that Muscle Up’s unauthorized use of the “RULE 1 PROTEINS” trademark for advertising on their website constituted trademark infringement, even though the products were genuine.

With this revised assessment, KENFOX sent a Cease and Desist (C&D) letter to Muscle Up. Recognizing the strength of the VIPRI’s expert opinion and their infringement, Muscle Up voluntarily complied, removing all infringing content from their website.

Key takeways for IPR holders

From the above case, the following key considerations can be withdrawn therefrom.

Selling genuine goods doesn’t grant automatic trademark use rights: Merely selling authentic products bearing a trademark does not automatically give you the right to use that trademark in your advertising, marketing, or promotional materials without the owner’s consent.
“Use” of a trademark includes advertising: Vietnamese IP Law, and likely many others, defines “use” of a trademark broadly, including advertising goods bearing the mark. This is a crucial distinction often overlooked.
Doctrine of exhaustion is limited: The principle of trademark exhaustion allows for the free circulation and resale of genuine goods after their initial lawful sale. However, it does not extend to the unauthorized use of the trademark for subsequent advertising and promotion by resellers.
Seek permission for trademark use: As a general rule, always seek explicit permission from the trademark owner before using their trademark, especially for advertising purposes. This is crucial even if you are dealing in genuine products.
Control over brand image is critical: Trademark owners have a legitimate right to control how their brand is presented and marketed. Unauthorized advertising, even by genuine product sellers, can dilute brand value, cause consumer confusion, and damage reputation.
VIPRI Assessments can be re-evaluated: Even if an initial assessment from VIPRI is unfavorable, it’s not the final word. With strong legal arguments and compelling evidence, these assessments can be successfully challenged and reversed.

Closing thoughts

The Rule One Proteins case serves as a vital reminder for businesses operating in Vietnam and beyond. While the doctrine of exhaustion allows for the resale of genuine goods, it does not grant the automatic right to use the trademark for advertising and promotional activities without the trademark owner’s permission.

QUAN, Nguyen Vu | Partner, IP Attorney

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