New enforcement decree in Vietnam

A new Decree 198 updates enforcement rules based on new commercial practices, especially online. It involves:

•           Clarifying unclear provisions

•           Adding consistency with subsequent legislation enacted after 2013.

Examples of what Decree 198 covers include:

1.         The definition of counterfeit goods is amended. A detailed new definition is created. It especially includes goods with no active ingredients, as well as goods bearing fraudulent label information and counterfeit labels and packaging. A consistency change is the removal of the term "Intellectual property counterfeit goods” which comes from Article 213 of the 2005 Intellectual Property Law from the definition of counterfeit goods. These are already handled by another Decree No. 99/2013/ND-CP on administrative IP violations. This change removes an overlap/duplication, so avoids different outcomes arising from different decrees/laws.

2.         Administrative fines are mainly increased under the new decree. Some minor violations are moved to lower levels of fine (acts of trading counterfeits, goods, services infringing IP rights and banned goods, services on the internet).

3.         A new offence of trading counterfeit goods online is included with fines specified. Specifically this change is in adding e-commerce applications on mobile platforms (“mobile applications”) as the subject of e-commerce IP violations. Compulsory removal of mobile application from application stores is one of the remedial measures.

4.         The administrative enforcement role of the General Department of Market Surveillance under the Ministry of Industry and Trade (MMB) is confirmed. 

The new rules take effect on 15th October. Many administrative IP cases are filed with this department both ex officio cases and complaint based cases. Sometimes administrative complaints ask the case be dealt with by the MMB, in other cases, in collaboration with other authorities.

Wide-ranging trademark dispute in Vietnam escalates to court

A civil lawsuit by Ngan Anh Enterprise against the National Office of Intellectual Property (NOIP) in the Hau Giang Province Court is an interesting challenge to the government's approach to deciding trademark similarity.

Ich Nan Pharma Co. Ltd makes and sells a food supplement with anti-aging properties under the mark “Bảo Xuân & device” was registered under Reg. No. 0172843 covering medicines and nutritional foods used in healthcare in Class 5.

 

Ngan Anh Enterprise makes and sells a skin cream with whitening properties. Ngan Anh filed an application covering cosmetics in Class 3 which was refused for being confusingly similar to Ich Ngan's prior mark “Bảo Xuân & device”. The two products are shown - there is no obvious similarity.  

Over several years a series of enforcement actions were undertaken by Ich Nhan leading to the following decisions against Ngan Anh -

·       Following Ich Ngan's compliant on 8 Oct 2012, the Vietnam Intellectual Property Research Institute (VIPRI) made an assessment that the mark used by Ngan Anh infringed Ich Nhan’s mark.
·       On 9 November 2012, in a Working Minutes of the MMB of Hau Giang Province, Ngan Anh admitted infringement and undertook not to manufacture, trade in cosmetics bearing “Bảo Xuân” mark.
·       On 13 November 2012, in an Official Letter for an administrative penalty against Ngan Anh, the MMB of Hau Giang Province stated that Ngan Anh also promised to destroy all infringing products within 40 days.
·       In May 2013, the Hanoi MMB issued many sanction decisions against drugstores trading in the cosmetic products bearing the Bảo Xuân mark manufactured by Ngan Anh.
·       On 10 June 2016, the Inspectorate of Ministry of Science and Technology issued a sanction decision against Ngan Anh for manufacturing the infringing cosmetic products

After refusal of its trademark application in 2015, Ngan Anh filed a case against the National Office of Intellectual Property (NOIP - Defendant), in the Hau Giang Province Court. The case related to the NOIP refusing to grant their trademark registration for the mark Bảo Xuân. The NOIP's refusal was based on Article 74.2e and 74.2g of the IP Law that there was a conflict with another registered trademark for associated goods/services - Bảo Xuân in the name of Ich Nhan.  Ngan Anh argued in the lawsuit against the NOIP to reverse the decision on the basis that the goods are different - theirs are class 3 cosmetics while Ich Nhan registered for class 5 medicines. The Court of Hau Giang Province ruled in favor of Ngan Anh Enterprise in 2016.

The NOIP has now filed an appeal against the Court’s decision on the basis that the Nice Class system is not absolutely determinative of similarity.  The case pits virtually the entire Vietnam enforcement system against Ngan Anh.  The products have an identical mark, which is probably the source of Ich Nhan's concern, but the goods are arguably not the same.

The effect of MSG in Vietnam

A case in Vietnam illustrates the bureaucractic complexity of trademark disputes under an administrative  IP enforcement system.

AJINOMOTO is a trademark of Ajinomoto, Inc for Monosodium Glutamate (MSG). A trademark dispute commenced in March 2015 when Ajinomoto Vietnam filed a request to the Market Management Bureau (MMB) in the city of Danang for action against AJINO-TAKARA branded MSG made by local company Ha Trung Hau Co., Ltd.
 
After several months of dispute and after the assessment by Vietnam IP Research Institute (VIPRI) on 28 July 2015 that AJINO-TAKARA is similar to AJI-NO-MOTO, Danang MMB seized AJINO-TAKARA products. The National Office of IP of Vietnam (NOIP), as requested by MMB Danang, then also released a letter on 10 September 2015 indicating that AJINO-TAKARA is similar to AJI-NO-MOTO. Based on this, MMB Danang confirmed the administrative trademark infringement. 
 
Ha Trung Hau Co., Ltd brought an appeal against the assessment results of VIPRI and NOIP.  The appeal was brought to a meeting of the People’s Committee of Danang. It is possible to bring IP disputes to this, the local government executive. This illustrates the competing bureaucratic overlaps in Vietnam. Not only that, it seems concerns were expressed at the People's Committee about the problem of using similarity assessments issued by the NOIP and VIPRI and whether the dispute should be in the civil courts. However, the MMB then sought instructions from the Department of Science and Technology (DOST) of Danang who confirmed the infringing acts of Ha Trung Hau Co., Ltd pursuant to Article 129 of the IP Law. DOST is the Ministerial department that oversees IP. Therefore the People’s Committee of Danang made an administrative decision to fine Ha Trung Hau 500 million dong (US$22,000) for trade mark infringement.
 
Ha Trung Hau Co., Ltd then filed a lawsuit against this administrative decision claiming the dispute should have been filed in the civil courts. The court has temporarily suspended the administrative decision of the People’s Committee of Danang. The case will continue.