Alert 359 - Vietnam - Trade name infringement will be treated seriously


On 15 April 2010, the Vietnamese Government passed a new law, prohibiting the registration of company names which infringe a third party’s rights. Decree 43/2010, effective from 1 June 2010, regulates the company registration procedure and provides that a company must not use a trade name, trade mark and/or geographic indication belonging to another entity as its company name.

Background

Although Vietnam’s IP Law makes provision for trade name infringement, resolving trade name disputes can be difficult. In practice, the infringer tends to rely on the fact that the relevant business licensing authority has approved the infringing trade name as a defence to infringement claims. At the same time, the business licensing authorities say they cannot assist rights holders as there is no specific regulation granting them the power to intervene in these cases.

The Decree

Under the Decree, an IP rights holder can file a request with the relevant business licensing authority (usually the Department of Planning and Investment at a provincial level), drawing their attention to the infringing company name. The request must be supported by evidence of the rights holder’s rights in the name/ mark (for example, a trade mark registration certificate) as well as an expert opinion from the authorised body (for example, Vietnam Intellectual Property Research Institute) confirming the company name in question is infringing.

Within 10 days of receipt of the request, the business licensing authority must give notice to the infringer requesting a change of company name and giving the infringer two months to comply with the requirement. If the infringer fails to comply within this period, the business licensing authority will send a notification to an enforcement authority (for example, the Inspectorate of Science and Technology) competent to handle the matter in accordance with the IP law.

Remedies for trade name infringement under the Vietnam IP Law include an order prohibiting the infringer from using the infringing company name, a monetary fine and a temporary suspension of the business licence.

Our comments

This new mechanism for resolving trade name disputes will be welcomed by rights holders in Vietnam. It sends a clear message to the business community that when choosing a company name, businesses must take steps to ensure that it does not infringe another entity’s IP rights. It is also further evidence of the Government’s commitment to strengthen the position of rights holders in Vietnam.

The two-month name change period is generous and we consider a one month period would be more appropriate. Further, the involvement of two authorities in the enforcement procedure is also likely to cause delay and increase the rights holder’s burden as it will be necessary to follow up first with the business licensing authority and then the enforcement authority. However, we consider that most infringers will respond positively to the initial request from the business licensing authority and even if they do not, the new law is a significant boost to rights holders.