Second ISP liability case in Vietnam; this time against Alibaba subsidiary Lazada

 

Vietnamese publisher First News is taking legal action against e-commerce platform Lazada.  The claim by the Saigon-based company is that many Lazada merchants sell fakes books, and despite repeated notices to take them down, the problem has worsened. 

This is the second ISP liability case filed recently in Saigon. See here for details of a similar recently filed TikTok case. It is thought they are the first such civil cases in the country.  

Some of the fakes seen include classics such as Dale Carnegie’s "How to Win Friends and Influence People" and the "Chicken Soup for the Soul" books. The prices of the copyright infringing books are half the prices of the originals they say and many buyers have apparently complained.  First News first reported on this at an event they ran in July when they announced some 700 fake books available on various e-commerce platforms in Vietnam.

First News is a publisher of many books including Vietnamese translations. It previously sued and won compensation from English language schools for reprinting it’s books locally, so is experienced at enforcing its copyrights.  Lazada is owned by Chinese e-commerce giant Alibaba, and is generally regarded as one of the more efficient e-commerce platforms for dealing with fake items in the SE Asian region. 

Vietnam has long had a pirated book problem. This includes unauthorized photocopying and illegal print piracy. From historic classics like Graham Greene’s the Quiet American to Lonely Planet travel guides, sold on streets of Ho Chi Minh City to tourists, to ELT books for those learning English, as well as journals and academic text books for students. 

ISP liability in Vietnam is split into different types of ISPs. E-commerce platforms have a specific liability under a specific Decree 52 on e-commerce regulation.  This requires platforms to take timely remedial measures upon detection or receipt of complaints about business acts in violation of the law on e-commerce platforms. E-commerce platforms must eliminate from their portals any counterfeits, illegally imported goods or IP infringing goods upon detection or receiving a fair complaint. This is therefore a form of statutory liability, without use of the concept of safe harbour.  

The law suit alleges Lazada's local operating company, a company called Recess, which is a Vietnamese subsidiary of Alibaba, repeatedly assisted in the sales of pirated books and was on notice of First News’ warnings. The case was filed in the Ho Chi Minh City District 1 People’s Court.  This court has heard copyright cases before so has some experience. It is the correct forum for two local companies to litigate this issue. 

Conversely the Tiktok case was filed in the Ho Chi Minh City Court (a provincial/city-level court) as it is a dispute between a local party and a foreign one. The grounds will also likely differ as TikTok is probably not regarded as an e-commerce platform but another form of ISP (i.e. “ an online social network service”) so not governed by Decree 52 but a different set of rules, namely Joint Circular 07.  However the underlying principles should be the same.  Platforms and IP owners will eagerly await the outcomes of both. 

 

 

When the music stops - TikTok's legal dance with a Vietnamese music titan

Major online Vietnamese content platform VNG is suing TikTok in Vietnam. VNG Corporation is a Vietnamese tech platform, founded in 2004, which focuses on digital content, online entertainment, social networking, and e-commerce. One of it’s subsidiary is app and web based a music streaming service, Zing MP3. Zing also owns rights to certain music especially Vietnamese music.

TikTok is huge in SE Asia, a relatively uncontentious region in the current global political environment. Its owner Bytedance counts Vietnam as one of its fastest growing countries. It has avoided political risk there by blocking certain content (it faces a double whammy risk of being big tech and Chinese, both highly sensitive in Vietnam). By steering clear of risk Vietnam is supposedly now among its most profitable markets in Asia.

VNG accuses TikTok of using music owned by Zing  without consent, in a number of its short videos. These are likely user posted videos probably with accompanying Vietnamese music. An analysis report from Zing showed a total of 150 Zing music tracks used in more than 11 million videos on TikTok's website and app. VNG says it sent a cease and desist letter alleging copyright infringement to Tiktok and requested Tiktok to review and remove all the music owned by Zing.

The case was filed in the People’s court of Ho Chi Minh City. The complaint demands removal of the music videos both from the TikTok app and also it’s website, as well as a damages claim for 221 billion VND (over USD9 million).

This is a huge damages claim, probably not likely to be upheld by the court. However copyright cases make up most of the infringement seen in the courts in Vietnam so judges do have some experience of this area. The case could take a year or so if it proceeds to trial. in most countries such ISP cases settle, on the basis that the ISP removes the content. Settlements have happened in other copyright litigation cases in Vietnam.

New IP law amendments and counterfeiting report in Vietnam

Its been a busy week in Vietnam’s IP world. The International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy initiative (BASCAP) is a business driven program focused on stopping counterfeiting. It has released its first report on IP in Vietnam. Focusing on the prevalence of fake and pirated goods, the report identifies a series of problems that cause the widespread proliferation of fakes in Vietnam. They cite a large grey economy, corruption; weak enforcement systems and poor consumer awareness.  They report cites some recent developments but adds that more needs to be done. Their recommendations include:

• Better enforcement systems
• Legislative reform
• Use of international technical assistance
• The need for more capacity building in IP institutions

Vietnam's IPO is broadly supportive of the report. Progress has been made and there is more to do. they said at BASCAPS's report launch. 

In a separate step Vietnam’s Ministry of Industry and Trade has recently released amendments to the IP laws to comply with the CPTPP (see here for background). Among the amendments are:

1. Patent Novelty destroying disclosure exceptions are narrowed.

2. Trademark License recordal will no longer be compulsory

3. Legal Fees are limited in scope in Vietnam, but now, where a case is lost when a Court finds no infringement, the winner may claim losing appropriate lawyers’ fees.

The draft law has been submitted to the National Assembly for their review and adoption.

Vietnam civil copyright decision

A copyright dispute in Vietnam indicates that civil litigation is increasingly common. This month the Hanoi People’s Court ruled in a civil decision on copyright.

 

It concerned a musical called Tinh Hoa Bac Bo (Quintessence of Tonkin). This is an open-air water stage musical about the region of Tonkin, in north Vietnam. It premiered in late 2017 and met with critical success and awards. The show was produced by Tuan Chau Hanoi JSC. It is alleged to have reproduced components of another musical play called Ngay Xua (Back Then). This was produced by TCHN and directed by renowned director Viet Tu in June 2017. Tu’s show was not a success and stopped running after 10 shows. Tu used to be an employee of Tuan Chau Hanoi JSC.

 

Expert evidence from the Vietnam Stage Artists Association was provided during the case. TCHN defended in court that The Quintessence of Tonkin was a separate product solely researched and created by directors Hoang Huu Nhat Nam and Dao Thuy Phuong Thao. Nam argued that he was the author of The Quintessence of Tonkin, and had already been granted an independent copyright for his work by the Copyright Office on July 31, 2017.  However when summoned to give evidence he did not appear.

The panel of judges decided that The Quintessence of Tonkin was a derivative work of Back Then. They awarded Viet Tu VND660 million ($28,000) in damages from TCHN. They calculated 10 percent of ticket sales, royalties, and interest for late payment.

 

There has already been an appeal and a separate defamation case has been filed by Name against Tu in in the People's Court of Binh Thanh District, Ho Chi Minh City.

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.

Domain name cases and cybersquatting in Vietnam

On 8 June 2016, the Ministry of Information and Communication (MoIC) and Ministry of Science and Technology (MoST) jointly held a meeting to sign a new circular on handing domain name infringements. For some time domain name infringements have been impossible to handle effectively due to uncertain ministerial responsibilities for enforcement of decisions. See here for more detail. 

However this new joint circular surprised everyone. It only covers (i) domain names identical or similar to others' IP along with content on associated websites which infringe others' IP; (ii) domain names used for publishing content infringing IP laws. This is inconsistent with a previous 2015 Circular which covered bare cybersquatting (registering domain names similar without actually using the names or merely intending to resell the names or to prevent the IP holders from securing the names).  

This is disappointing. The most typical problem has not been addressed. To enable administrative action, IP holders must prove infringement on the associated websites. The MoIC has in effect sent a message: cybersquatting disputes must be resolved in court, not through the administrative route. This is in fact consistent with what the Law on Information Technology says but there is still arguably a conflict between the Law on Intellectual Property and the Law on Information Technology. Only serious content infringements will be resolved by the administrative authorities, less serious cybersquatting must go to the civil courts.

Vietnam Civil Copyright Case

On 12 May 2015, the Court of Hai Chau Ward in Da Nang City awarded compensation of  VND14,000,000 (approx. US$700)  in an action for infringement of copyright in a photograph. Although the case itself is relatively straightforward and the amount of compensation modest, the decision is noteworthy because copyright infringement actions of this sort rarely reach the courts in Vietnam, owing partly to the lack of detailed regulations for the assessment of infringement and damages and partly to the complex court procedures that exist. 

 

On 20 July 2014, a photographer,  Mr Mac Bao Khanh,  found that his work ‘Da Nang – toward future’, a photograph of Da Nang City Bridge, had been modified and was being used, without his consent, by Toan Cau Xanh Ltd. for advertising purposes. He subsequently initiated communications with Toan Cau Xanh Ltd. in an attempt to resolve the issue amicably and then, after a series of unsuccessful discussions, commenced copyright infringement proceedings in the Court of Hai Chau Ward, claiming  compensation of VND 25,000,000 (approx. US$1,146).

On 9 March 2015, the Court of Hai Chau Ward established a price assessment committee, made up of representatives of five relevant organizations, to evaluate the photograph in dispute. The committee valued the photograph at VND20,000,000 (approx. US$917).

 

At the trial on 12 May 2015, the Defendant argued  that: (i) the photograph in dispute had been downloaded from a tourist forum, not from Mr Khanh’s personal website; (ii) Mr Khanh had asked for a royalty of only VND200,000 (approx. US$9) per day in a deal with Vnexpress, a local newspaper, so the compensation being sought in this action was unreasonable. In its verdict issued on the same day, however, the Court found in favour of Mr Khanh and  ordered Toan Cau Xanh Ltd. to pay compensation  of VND14,000,000 (approx. US$700). Hopefully, the case will serve as an useful precedent, encouraging copyright owners to seek relief from the courts when their copyright is infringed.

Vietnam civil trademark infringement litigation

Hoa Sen Group, a Vietnamese building material manufacturing group has sued Ho Tat Minh Enterprise for IP infringement in the Tay Ninh Province People's Court on 2 March 2015. Tay Ninh is 100 km NE of Saigon in the Southern part of Vietnam.

Hoa Sen Group alleges that Ho Tat Minh Enterprise has used their trademark on its signboard (left) and in price quotes. Although Hoa Sen Group arranged several meetings to try to resolve the dispute amicably, Ho Tat Minh Enterprise refused to settle. Ho Tat Minh Enterprise maintains that they are making fair use of the HOA SEN mark as they are selling Hoa Sen Group's products.

Hoa Sen Group, the plaintiff, registered the infringed mark at the National Office of Intellectual Property (NOIP) so have grounds for pursuing the case. Vietnam's legal system does not directly address the issue of "honest use", however, an equivalent is regulated in Article 125.2h of  Vietnam's Law on Intellectual Property, which states that IPR holders shall not have the right to prevent others from using in an honest manner people's names or marks descriptive of the goods or services. Tay Ninh Province People's Court is still considering the case.

Civil domain name trial in Vietnam

 

 

IP Komodo has written before about the growth shoots in civil IP litigation in Vietnam. The lack of Domain Name arbitration procedures has given the Da Nang City People’s Court a chance to hear an IP trial. Da Nang is the largest city in Central Vietnam and has a regular stream of IP work.

The plaintiff French building materials company Lafarge sued defendant, Pham Thi Ngoc Han of Da Nang, over the domain name www.lafarge.com.vn.  His website redirected traffic to http://lafarge.jimdo.com, where he displayed construction related advertisement. He also used a similar logo to the L LAFARGE logo.
 
In April 2014, the Da Nang City People’s Court ordered revocation of the domain name and gave Lafarge priority to register a new domain name within 10 days. The basis was unfair competition because the defendant committed “an act of unfair competition and an infringement of the rights over the mark LAFARGE”.
 
This is the second such domain name case following a 2010 decision of the Hanoi People’s Court revoking a domain name www.samsungmobile.com.vn.

  

Civil copyright litigation continues to grow in Vietnam

The tradition of filing civil copyright litigation in Vietnam continues - see here for previous cases.  The latest is the famous Dale Carnegie performance-based training organization.

Last week Dale Carnegie Vietnam organized a press conference at its school. It announced the filing of a copyright piracy case in February in the Ho Chi Minh City Peoples' Court against a prevous trainer at the school called Hieu. He had been found using the school’s copyrighted training curriculum for his own private business after he left. He had been given the materials only for teaching the school’s students or partners. However Hiew made the mistake of soliciting Dale Carnegie’s clients to his private school. He even undertook at one point to cease this, but did not. So Dale Carnegie Vietnam decided to sue Hieu for copyrght piracy.

The case follows well trodden path of copyright cases and should bode well for those contemplating civil litigation for IP violation in Vietnam.

 

New Vietnam rules on enforcement execution

In late August a new Decree on Sanctioning Administrative Violations in the Field of Industrial Property was issued. It replaces previous weak rules with stronger ones on executing enforcement decisions. 

 

Trade name enforcement was complicated by the requirement that infringers had to be requested to change a trade name first. The Business Registration Agency (BRA) could not just revoke an infringer’s business registration if it infringed.  Under the new decree the BRA has the power to do so, upon request by the enforcement authority, in cases where the infringer does not voluntarily change its company name within 60 days from the enforcement decision.

 

A second change involves domain names.  Existing rules allowed revocation of an infringing domain name. But infringers had 1 year to voluntarily withdraw.  The enforcement authority had to request VNNIC (the .vn registry manager) to revoke the domain name. That was clearly far too long. Now the registrant has 30 days from the enforcement decision. If he does not then  the enforcement authority can ask VNNIC to revoke the domain name.

 

The new decree also introduces a more detailed penalty system based on levels of value of infringing goods seized which further differ between individual or business infringers.

 

Vietnam's enforcement system is terribly complicated, with great reliance on the authorities to do a lot of work to enforce decisions. So enforcement can be cumbersome and slow. But the new Decree makes for some improvements.

A rare civil copyight litigation case in Vietnam

Tri Viet-First News Company a Vietnamese publisher who owns and licenses a number of titles for publication in Vietnam, has sued the Australian International Language School and Viet Nam Australia Society English Centre in the Ho Chi Minh City Peoples' Court (left) for illegal copyright infringement over 11 English-language titles and CDs. The accusation is that the two foreign language centres copied thousands of course books, materials and CDs. The copies even bore the First News logo, its address and the names of the publishers on their copies. Warning notices last year had apparently been ignored so the company sued for damages VND380 million (US$18,100).

IP civil litigation is still rare in Vietnam. How the court deals with evidence, the damages calculation and the injunction will be of great interest to IP holders and IP attorneys.

Vietnam - preliminary injunctions

IP Komodo reported here on the slow development of rules for preliminary injunctions in Indonesia. In Vietnam injunctions in IPR infringement cases (including ex parte) are in theory possible under rules of the Civil Procedure Code (which calls them emergency measures). But the rules are not entirely clear and there are no cases showing how injunctions would work. Many practicalities would be in the judge's discretion therefore.

The lack of injunctions granted is partly due to the lack of civil IP cases, because the market is not developed enough to sustain major civil IP litigation yet. Most IPR cases still tend to be dealt with by the administrative authorities. But changes will come as they are coming elsewhere in South East Asian IP litigation and once disputes of sufficient size appear, we can expect the civil courts will likely see their first injunction applications in the coming years.