Trademark and trade name are both important business signs to identify the source of products and services. In practice, in Vietnam, it is quite common for a third party using someone’s trademark, especially those are of certain reputation, as a trade name.
Trade name, under Article 4.21, Vietnam IP Law 2005, revised 2009 means “the designation of an organization or individual used in business activities in order to distinguish the business entity bearing such trade name from other business entities in the same business sector and area”. Unlike a trademark, rights to a trade name are established through their use rather than under a formal registration system. In Vietnam, a company name or a business name also serves as a trade name. It is not difficult to set up a company with a company name or a business name or a trade name similar or, even identical to a prior trademark of another entity. In the trade name aspect, provided that a later trade name which is not is the same as another enterprise’s name that has been registered will be accepted for use as a name (a business or trade name) in a later-established enterprise. As a result, a trade name similar or, even identical to a trademark of another entity is not a rare phenomenon in Vietnam.
What you should do if you are concerned about a business/trade name similar to a trademark?
The act of registering and using a trade name that is identical with or similar to a prior registered trademark is mainly regulated under Law on Enterprise 2014 (i.e. Article 39 on prohibitions when naming enterprises, Article 42 on used names and confusing names) and Vietnam IP Law 2005, revised in 2009 (i.e. Article 78 on distinctiveness of trade names). To settle a trademark-based domain name dispute where a corporate name or trade name that a prior trademark, on 05/4/2016, the Ministry of Science and Technology and the Ministry of Planning and Investment issued Joint Circular No. 05/2016 / TTLT- BKHCN-BKHDT on detailing and guiding measures against corporate names that infringe industrial property rights.
Ways to resolve a trademark-based trade name dispute
Whether or not the later trade name infringes upon the right of other’s prior registered trademark mainly depends on the following factors: the popularity of the prior registered trademark and the likelihood of confusion as to business entities, business activities or commercial origin of goods or services. Under Article 19, Circular No. 11/2015/TT-BKHCN, to be eligible enforce against a trademark allegedly infringing a trademark, it is required to prove that (i) the trademark holder has made a prior use of his mark in a public and stable manner in its lawful business activities in Vietnam and has its reputation for the goods or services bearing such trademark and (ii) the corporate name/trade name used by a third party is identical or confusingly similar to the owner’s prior mark used for identical or similar goods or services and (iii) the use of such a corporate name or trade name can mislead consumers as to the business entity, business activities, commercial origin of goods or services, geographical origin, manufacturing method, function, quality, quantity or other features of goods or services or conditions of goods or service provision.
According to KENFOX’s years of experience in safeguarding rights, the following steps could be taken to deal with a trademark-based trade name dispute disputes.
(1) Warning and negotiation
In general, for the infringement with clear facts and less serious circumstances, it may be resolved through a warning letter and negotiation. Some infringers knew the existence of the trademark of the right holder, but tried to “free ride” when they register their own trade names. Prior to serving an alleged infringer with a warning letter, an investigation should be conducted to secure evidence of use of the alleged infringing evidence. As a next step, to put more weight on the infringer to obtain their voluntary compliance, the trademark owner is advised to obtain an expert opinion (or assessment conclusion) on a likelihood of trademark infringement from Vietnam Intellectual Property Research Institute (“VIPRI”). The VIPRI is an institute under Ministry of Science and Technology of Vietnam (“MOST”) which is accredited for delivering expert opinions/assessment conclusion at the trademark owner’s request, on the trademark infringement of the third party. VIPRI’s confirmation of the infringement would significantly support the trademark owner’s claim against infringement and likely convince the enforcement authorities to conduct inspections/raids.
The warning letter puts the alleged infringer on notice of trademark owner’s concerns, explains the nature of the infringement, outlines trademark owner’s rights in the trademark(s) and requests that they cease all uses of the infringing signs (gathered in the investigation), then, change the corporate/trade name. Our experience is that warning letters are highly effective when they are accompanied by persistent follow-up. In our most recent warning letter campaign most of infringers issued with a warning letter and then subsequently chased with follow-up calls either provided us with an undertaking or ceased the infringing activity.
(2) Bringing a trademark-based trade name dispute to the Vietnamese enforcement authority for settlement under administrative proceedings
In Vietnam, most of the IPR infringement cases have been settled under administrative proceedings since this measure seems to be more feasible and more effective in terms of time and cost. Purpose of the administrative proceedings is to stop the infringement and impose a monetary fine or warning on the infringer. The monetary fine shall be paid to the State Treasury, but not to the IPR holders.
It is a good choice to take administrative investigation when the problem cannot be resolved through warning and negotiation, or the infringement is more serious and the trademark owner wants the alleged infringer to be punished accordingly. In the practice of administrative proceedings in the past few years, a more commonly happened situation was that the alleged infringing enterprise changed their corporate or trade name voluntarily as being persuaded by the officer of the Vietnamese enforcement authorities and under the administrative power when the suspected infringing products were detected and seized. In the practice of administrative investigation in the past two years, it is felt improvement of the level of law enforcement by enforcement authorities in Vietnam. Now, existence of infringing products become unnecessary, as long as there is the act of registering and using the registered trademark of another person as trade name which is determined to have constituted infringement, the enforcement officers would explain to the alleged infringer about the infringement issue and legal consequences if the alleged does not voluntarily change their corporate name or trade name.
Of note, in Vietnam, before submitting a trademark-based trade name dispute to the Vietnamese enforcement authority for settlement, the trademark owner is advised to obtain an expert opinion (or assessment conclusion) on a likelihood of trademark infringement from Vietnam Intellectual Property Research Institute (“VIPRI”). The VIPRI is not an enforcement authority, it is an institute under the MOST which is accredited for delivering expert opinions/assessment on trademark, patent or industrial design infringement. Although the Vietnamese enforcement bodies may determine to take actions against a possible IPR infringement at their own discretion, practice indicates that they often rely on the VIPRI’s Assessment Conclusion to initiate enforcement actions. An Assessment Conclusion in favour of the trademark owner would be supportive, likely to convince the enforcement agencies to confirm a violation and then, take enforcement actions.
Under the laws, the Vietnamese enforcement authorities may apply two procedures, namely, (i) requesting the alleged infringer to change the corporate names or remove infringing elements in corporate names or (ii) revoking Business Registration Certificates of companies whose names infringe the industrial property rights under procedures as set out under Joint Circular No. 05/2016/TTLT- BKHCN-BKHDT
(3) Civil litigation
Even if a warning letter is issued or an administrative proceeding is initiated, it may be difficult to obtain an ideal result for a serious infringing act but with delicate situation in similarity determination. Under such circumstance, the trademark owner is advised to resolve the dispute by submitting a civil lawsuit to a competent Vietnamese court for hearing. Although it is relatively costly and time-consuming, civil litigation can ensure that a trademark-based trade name dispute is dealt with. If it is found that it constitutes infringement or unfair competition, the court will order the later trade name holder to change the name of their enterprise within the prescribed time limit. Under civil proceedings in Vietnam the trademark holder may request the court to force the defendant to pay damages. Nowadays more and more attention has been paid to the protection of intellectual property rights in Vietnam. To obtain higher damages, the plaintiff must provide the Court with evidence proving that they have been actually and directly damaged due to the IPR infringement caused by the infringer in Vietnam, such as loss in property and/or decrease in income, profits and/or losses in business opportunities and/or reasonable expenses for prevention and remedy of damage. The proof of damage based on which compensation is made must be clear and legitimate evidence, showing the direct causal nexus between the infringement and the damage.