Vietnam and the EU: a background for SMEs

Vietnam is the easternmost country on the Indochina Peninsula in south-east Asia. With an estimated population of 90.5 million in 2014, it is the world’s 13^th most populous country. Forecasts in 2005 and 2008 predict Vietnam to be one of the world’s fastest-growing emerging economies by 2025, a position supported by 2012 figures GDP figures topping USD 138 billion, with a nominal GDP per capita of USD 1,527.

Vietnam now operates a diverse, modernised economic structure, with manufacturing, information technology, and high-tech industries forming a large, fast-growing part of national economy and is also the third-largest oil producer in south-east Asia.

Vietnam’s key exports to the EU include footwear, textiles and clothing, coffee, rice, seafood, and furniture, totalling approximately EUR 22 billion each year. EU exports to Vietnam primarily consist of high tech products such as electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products, totalling approximately EUR 5.8 billion annually. Vietnam and the EU launched negotiations on a Free Trade Agreement in 2012 which are ongoing.

Vietnam has made a concerted effort to bring its national legislation into line with international IPR standards in recent years. Accession to the World Trade Organisation (WTO) in 2007, and its compliance with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) signified a marked improvement to IP protection in the country.

Vietnam is also a member of the following international conventions regulating IP matters:

• The Paris Convention for the Protection of Industrial Property
• The Madrid Agreement concerning the international Registration of Marks
• Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
• Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
• The Patent Cooperation Treaty
• International Convention for the Protection of New Varieties of Plants
• Agreement on Trade-Related Aspects of Intellectual Property Rights
• The Berne Convention for the Protection of Literary and Artistic Works

As a result, Vietnam’s IP legislation is now considered to be relatively comprehensive, covering most aspects of protection of IP in accordance with international standards. Enforcement mechanisms are still relatively underdeveloped however and much work remains to be done to strengthen deterrent measures and raise awareness amongst Vietnamese consumers.

Trade marks in Vietnam

A trade mark is a sign such as a word, device, brand, shape, colour or any combination of these elements, which is capable of being graphically represented and being used by a person in the course of trade to distinguish his goods or services from another person’s. Vietnamese law provides protection for any trade mark which constitutes a visible sign in the form of letters, words, drawings or images, including holograms, or any combination of these, represented in one or more colours. Marks must be distinctive, i.e. consist of one or more easily noticeable and memorable elements, or of many elements forming a noticeable and memorable combination. Three-dimensional marks can also be registered in Vietnam, however sound and smell marks are not yet recognised.

However, marks which comply with the above requirements, but are identical or confusingly similar to national flags, names of political organisations and real names, or would cause misunderstanding or confusion as to the origin, properties, quality, or other characteristics of the goods or services are not eligible for protection. Marks must also not be identical or confusingly similar to another person’s mark already registered or used for identical goods or services.

Vietnam is a member of the Madrid Protocol and therefore any trade marks already registered in other member countries may be extended to Vietnam via the Protocol mechanism through the applicant’s home office (or original office of registration in a member nation). Furthermore, as a member of the Paris Convention for the Protection of Industrial Property any local registrations for trade marks enjoy a ‘right of priority’ based on the date of any prior applications in other Convention member states within a 6 month period.

Vietnam operates a ‘first-to-file’ system for trade mark registration, and it is therefore essential for trade mark applicants to register early, ideally before entering the Vietnamese market, so as to diminish the risk of potential trade mark hijacking through so called ‘bad-faith’ registrations by third parties.

Trade mark registration grants the right holder exclusive rights to use the registered mark in business activities related to the classes for which it has been registered . Protection lasts for 10 years from the date of filing in Vietnam, or the priority date where appropriate. This protection can be extended indefinitely for further, consecutive 10 year periods.

Obtaining trade mark registration in Vietnam

As we have already discussed, where the mark is already registered in a member state, applications can be made for trade marks via the Madrid Protocol system through the applicant’s home trade mark authority. Further information on the Madrid Protocol and associated procedures can be found on the WIPO website.

Domestic applications must be made in Vietnamese, although any documents relating to power of attorney, or evidence of right to register or priority right may be supplied in their original language. Any other supporting documents may also be submitted in a foreign language, although they must be translated if requested by the authorities.

Applications are made with the National Office of Intellectual Property (NOIP), and must include the following documents:

• A request made in the standard form provided by the NOIP
• Documents, samples, and information identifying the trade mark
• Relevant fees and charges
• Documents detailing power of attorney, where application is filed by a representative
• Documents demonstrating rights of ownership, where the trade mark has been acquired from a third party
• Documents demonstrating the priority right, where applicable

The fee for trade mark registration in Vietnam is approximately EUR 25, excluding legal fees, for each class registered . Additional classes may be registered for EUR 4 each. This fee includes; filing fee, publication fee, examination fee, and searching fee. Other fees may arise however, depending on the details of the application. Upon approval, there is also a granting fee of approximately EUR 22 for a single class, with an additional EUR 4 for each extra class.

The registration process typically takes up to 15 months from the date of filing, and once granted the protection runs from this date (or the priority date where applicable).

Enforcement

Should your trade mark be infringed in Vietnam, there are three main avenues of enforcement which can be pursued; administrative actions, civil litigation, and criminal prosecution. This being said however, private mediation via legal professionals is often more effective and should be considered as a viable first action in the event of an infringement.

Administrative actions

Administrative actions are both cost-effective and time-efficient, and this is usually the most common route for companies to take when infringement has been discovered. It is a good way to deal with small-scale infringers and to gather evidence for larger scale infringements. Due to the nature of the remedies available and speed of case handling, administrative actions are an especially effective method of putting an immediate stop to on-going IPR infringement.

Administrative actions involve different government bodies, depending on the nature of the infringement, if the correct enforcement bodies are contacted and involved, they are usually quickly able to assess the situation and issue appropriate penalties. These include cease and desist orders, revocation of business licenses, monetary fines, and/or the confiscation and destruction of infringing goods. These penalties may not be as severe as those available through civil litigation or criminal prosecution, however they do offer a practical, realistic chance of stopping infringers quickly, and in some cases obtaining damages.

Civil litigation

Civil litigation is usually only used in the event of larger scale infringements and very few cases are brought before Vietnamese civil courts. This is partially due to the lack of proper IP training and human resources within the judicial system, resulting in somewhat unpredictable case outcomes. Vietnamese authorities are working to improve the civil system however, working in cooperation with international organisations and government agencies.

In civil actions, right holders can request provisional measures such as preliminary injunctions, as well as claim actual damages or loss of earnings . Where actual loss cannot be determined however, the maximum award is currently set at approximately EUR 18,000.

Criminal prosecution

As with civil actions, criminal prosecutions are relatively rare in Vietnam, however they also provide for the harshest penalties for infringers.

For trade mark infringement, criminal charges may be brought against infringers for the reproduction or distribution of work to the public which is both intentional, and equivalent to a ‘commercial scale’. The term ‘commercial scale’ has yet to be officially defined in law however and there is not yet sufficient case law to give an accurate estimate.

Criminal cases usually take around 12 months, with a further 12 month appeal proceeding. Penalties for copyright infringement include a monetary fine of up to EUR 38,000 and imprisonment up to three years. As such, favourable rulings can provide a valuable deterrent to potential future infringers.

However, criminal proceedings for trade mark infringement will only be actioned on the request of the ‘victim’ as defined by Vietnamese law. As ‘victims’ in Vietnamese law, for the purposes of legal proceedings, must be individuals, company owned marks cannot be defended in the criminal courts. As such, it is unlikely that SMEs will be able to make use of the criminal court system unless trade marks have been used on license or through a similar agreement with an individual who is then definable as a ‘victim’ for the purposes of a criminal action.

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@southeastasia-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The South-East Asia IPR SME Helpdesk is co-funded by the European Union.

To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.