Handling of trademark infringement found in an e-commerce website in Vietnam, some noteworthy points

1. What kind of legal action can be taken in cases where the trademark rights of our client are infringed, e.g. seeking a preliminary injunction, bringing an infringement suit, bringing a criminal lawsuit, filing a complaint (under competition law) etc. (Subject to our client having a trademark in Vietnam)?

As provided in Vietnam IP Law, subject to nature and severity of trademark infringement, those who commit acts of infringement of trademark rights of another entity or individual shall be tackled in line with (i) administrative route, (ii) civil route or (iii) criminal route. In the event of imports of counterfeit / infringing goods into Vietnam, the trademark owner should consider taking border control actions to track inbound shipments and seize counterfeit/infringing goods at Vietnam’s border gates.

Preliminary injunction (or “Injunctive relief”) is available under the laws of Vietnam and may be sought on request of IPR holders or at the discretion of the Vietnamese competent enforcement authorities in line with civil route (under Article 200.2, Vietnam IP Law) or administrative route (under Article 200.3, Vietnam IP Law). Despite the availability of legislation, practice indicates that obtaining such relief is currently very difficult, even impossible. No award of injunctive relief has been reported and known to date in Vietnam.

Filing a complaint under the competitive law (or taking actions against an alleged unfair competition act pertaining to industrial property field) is often applicable where a commercial indication in general and a trademark in particular has not been registered, but widely used in commerce in Vietnam. Taking actions against an alleged unfair competition act requires plentiful evidence to be provided to support the widespread use and public awareness of a commercial indication (g. a trademark). Thus, the IPR holders do not choose to take unfair competition act (or file a complaint under the competitive law) if their marks have been already registered in Vietnam. In trademark infringement proceedings, if the trademark has been registered in Vietnam, the trademark owner just needs to provide evidence that his mark has been registered for requesting an enforcement action. This will be simpler and less onerous than demonstrating the specific use of a mark by presenting multiple proofs if the mark in question has not been registered.

2. Should we send a Cease & Desist letter upon finding an infringement in the e-commerce website in Vietnam? Is delivery a warning to alleged infringers effective?

Sending the Cease & Desist (C&D) letter to infringer(s) is an informal option to deal with IPR infringement. As a matter of practice, for small-scale infringements or unwitting infringement cases, taking into account that IPR awareness in Vietnam is not high, a C&D Letter may be helpful and serve as a cost-effective option to stop the infringements. In a nutshell, serving the alleged infringer with a C&D letter is recommended if:

(i) IPR infringement is not serious, or

(ii) IPR Infringement seem to be unintentional, or

(iii) IPR holders wish to save time and cost, or

(iv) IPR holders do not want to take strong actions against the infringement for any reason.

However, for large-scale infringement, IPR holders are advised to take aggressive enforcement actions, i.e. submitting the case to a competent enforcement authority for handling under administrative or civil route. In case the IPR holders determine to bring a case to a competent Court in Vietnam for hearing, they are advised to firstly consider taking enforcement actions against the infringer under Administrative Proceedings to secure as much infringment evidence as possible for civil actions to be subsequently taken (if any).

3. In some countries, major online shopping malls run owned Intellectual Property Centers monitoring that counterfeit goods are sold in online shopping malls and take effective actions to stop the sale of counterfeit product where there is the report by trademark owner or the other party. Please let us know whether there is the same or similar way (Intellectual Property Centers) to protect the trademark right (provided that our client has the trademark in Vietnam)

To our knowledge, large online shopping malls in Vietnam may have their own Legal Divisions in charge of general legal issues (e.g. receiving and managing consumer complaints, checking/monitoring compliance of the traders on their e-commerce website, etc.), but not Intellectual Property Centers which are merely assigned to monitor that counterfeit goods to take proper actions thereagainst.

Generally, online shopping malls or owners of e-commerce websites must be liable, under Article 36, Decree No. 52/2013/ND-CP on e-commerce, “To take timely remedial measures upon detection or receipt of reports about business acts in violation of the law on the e-commerce trading floor” and “To assist the state management agencies in investigating illegal business acts, provide registration information, history of transactions and other documents about the subjects committing violations of the law on the e-commerce trading floor”. As such, e-commerce website owner of online shopping malls are legally obligated to take actions if they receive reports of business behavior in violation of the e-commerce floor / website rule triggered by the sellers.

We are aware, as illustrated from various popular e-commerce websites in Vietnam, that sets out detailed rules in its “Regulations on operation of the application of the e-commerce trading floor” to deal with reports from the public as follows: “To respond promptly upon detection and receipt of a report on illegal business activities on an e-commerce trading floor. Removing from the website/application of information on selling counterfeit goods, counterfeit goods, smuggled goods, goods infringing intellectual property rights and other illegal goods and services when or receiving requests with reasonable grounds/basis”.

With this in mind, in principle, if trademark rights have been secured in Vietnam, the owners may report on a third party’s sales of counterfeit goods, counterfeit goods, smuggled goods, goods infringing intellectual property rights and other illegal goods and services in the e-commerce trading floor/website for the website owners to take proper actions under the laws of Vietnam to protect legitimate rights of the trademark owners.

4.What kind of legal action can be taken where counterfeit goods bearing our client’s mark sold by infringer and our client’s mark is not yet filed in Vietnam, but registered or used in Korea or Japan or any other countries.

Vietnam’s trademark regime adopts a first-to-file basis, protection for unregistered trademarks is only granted in limited cases. In detail, an unregistered trademark may be enforced against third parties’ infringement when (i) it is recognized as a well-known mark in Vietnam under Article 4.20 and Article 75 of the IP Law of Vietnam or (ii) it is falls within the scope of “unfair competition” under Article 130 of the IP Law of Vietnam.

As a matter of practice, without a Vietnam trademark registration, the client’s trademark rights over may be considered not being established in Vietnam. In addition, it is practically almost impossible to enforce against an alleged trademark infringement based on well-known status of a mark which has been not registered in Vietnam. In such scenario, taking action against an alleged infringer under the unfair competition laws may be an alternative.

In respect of anti-unfair competition proceeding, in Vietnam, it can be taken under one of the following proceedings, (i) the Civil Proceedings before a competent Vietnamese court, and (ii) the Administrative Proceedings before the Inspectorate of Ministry of Science and Technology of Vietnam (“IMOST”). However, weakness, inexperience on IP-related matters by the Vietnamese Courts, complicated procedures, delays, costly expenses and a lack of predictability in the outcomes have resulted in reluctance/unwillingness from the IPR holders to take actions against unfair competition acts under Civil Proceedings in Vietnam. In such sense, enforcing against unfair competition acts under Administrative Proceedings is more advisable.

5. What are drawbacks if taking enforcement based on unregistered rights in Vietnam?

The following factors may adversely affect the outcome of the unfair competition proceeding in Vietnam:

(i) Rights conferred to a trademark on which enforcement action is based have not been established through the registration procedure in Vietnam. We note that although the anti-unfair proceeding may be predicated on the wide use of the trademarks, the lack of a trademark registration in Vietnam might still weaken the owner’s position since the authority may raise questions or become hesitating in issuing decisions on the case, as the current enforcement practice of Vietnam indicates.

(ii) No explicit regulation is available on how abundant the evidence is required to prove the wide use. Thus, it is largely dependent on the viewpoint of the IMOST, and they may seek expert opinions from other authority, for example, the IP Office, on the matter.

(iii) The alleged infringer has used the alleged infringing sign for a long time in commerce in Vietnam without any confusion which has caused to the public.

6. What documents the IPR holder needs to provide for actions against unfair completion acts in Vietnam?

The following facts and information should be given to us to demonstrate the wide use of an unregistered mark in Vietnam:

(i) Information of the first use of the mark (time and location) and the duration of use of the mark, both globally and in Vietnam;

(ii) An estimate of the value of the mark, if possible – this is often difficult, but independent estimates/evaluations will be particularly useful if available;

(iii) Details of the major economic indexes (g. annual output, turnover, sales volume, profits and market share, etc.) of goods/services bearing the mark in the recent years;

(iv) Details of the sales/distribution network (countries where trademark-bearing goods have been sold), including sales network in Vietnam (list of distributors/resellers, if available);

(v) Details or estimates of the advertising expenditure on the mark throughout the world/the region, and particularly in Vietnam;

(vi) Samples of advertising materials, demonstrating use of the mark worldwide and in Vietnam (if any);

(vii) Evidence of recognition of the mark as being well-known by the Courts or the Trade Marks offices in other countries (if any);

(viii) Any other information capable of establishing the mark’s widely recognized status; and

(ix) Documents (emails, photos, etc.) showing consumer confusion (if any).

We note that proving the wide use of the unregistered trademark is critical in winning an unfair competition case in Vietnam. However, in some cases, from our experience, the IMOST may ask for evidence on possible damage caused by the alleged infringer’s conducts. Therefore, apart from collecting the above-mentioned evidence as much as possible, please be also well-prepared for some evidence on the possible damage. Of note, evidence relating to Vietnam would be of significant weight.

7. What are the procedures suggested by you in terms of unfair competition taken by the competent enforcement authority in Vietnam?

Regarding the procedures conducted by the IMOST, it will be as follows:

(i) A petition accompanied by evidence (including infringement evidence) supporting the unfair competition claims must be filed with the IMOST;

(ii) The petition is reviewed for acceptance; we note that in some cases, the IMOST may seek expert opinions from other authorities, such as the IP Office of Vietnam, to determine on whether the case should be accepted or not;

(iii) After the acceptance of the case, an Inspection Team is established to conduct an inspection against the alleged offender. If the alleged offender is found to have committed an act of unfair competition, a sanction will be issued against the offender, according to which, the offender may be ordered to cease the unfair competition acts and possibly imposed a monetary fine for their offence.

8. What recommended steps to take against an alleged infringement found in an e-commerce website in Vietnam?

Upon detection of an alleged infringement in an e-commerce website in Vietnam, the steps recommended to take are as follows:

(i) Conducting a check on the alleged offender;

(ii) Documenting evidence of the infringement with a bailiff’s witness;

(iii) Serving the alleged offender with a Cease & Desist Letter (optional);

(iv) Submitting the case to the Vietnamese enforcement authority for handling unfair competition act.

For more detail, please contact KENFOX at info@kenfoxlaw.com or kenfox@kenfoxlaw.com

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