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TRADEMARK PROTECTION
Crucial to compete
In
recent months, trademark infringement has received significant
coverage in business-related press. Examples include Vietnamese
brands like Trung Nguyen Coffee and PetroVietnam who, upon
attempting to register their trade names and trademarks in the
United States, found that they had already been registered by other
entities; both companies' difficulties in reclaiming those
trademarks are well-known. In the domestic market, the brand names
of "La Vie" drinking water of the Lavie Joint Venture Company and
"The Golden Pig" animal feed of VIC Trade Company Ltd. and their
trademarks have been repeatedly copied and imitated.
The
purpose of this bulletin on the issue of trademarks is to provide
lawmakers, law enforcers and businesses themselves with a general
understanding of the issue, as strong protection of intellectual
property (IP) rights is crucial if Vietnam is to compete in the
global marketplace. Poor trademark protection negatively affects
local businesses in both domestic and foreign markets, and limits
the attraction of foreign investment.
Incomplete legal framework
Over the last decade,
Vietnamese lawmakers have made a number of attempts to develop a
legal framework for IP rights. The Civil Code enacted in 1995
contains a section on IP rights which includes trademarks (Section
VI) and a series of implementing decrees and circulars were
subsequently promulgated. However, as IP is only covered in a small
section of the Civil Code, these laws are fairly general, and there
are many subordinate regulations which are inconsistent with one
other. This is divergent from the practice in many developed
countries, in which the IP rights legal framework is a detailed set
of laws that are clearly separated into sections dealing with
patent, trademark and industrial design. Businesses in Vietnam also
cite specific policies and procedures that constrain them developing
trademarks, such as the cap on tax-deductibility for marketing and
advertising expenses at 10% of total expenses stipulated by the
Corporate Income Tax Law.
Weak
mechanisms for protection from trademark infringements
Enforcement of trademark
laws falls under the responsibility of a number of government
agencies, including the National Office of Intellectual Property (NOIP),
the Court, Market Control Bureau, Economic Police, Technology and
Science Inspection, Border Army, and Customs; there is no single
agency that has primary responsibility. Judges are generally not
knowledgeable about IP issues, and thus must consult with many other
agencies before judgments can be made. This makes the trademark
infringement appeals process through the Court time-consuming and
inefficient. As a result, most victims of trademark violation
negotiate informally with administrative organizations such as the
Market Control Bureau or Economic Police or directly with the
violating party. This unofficial approach is time- and
cost-intensive, and is vulnerable to corruption. The administrative
punishment for trademark violation is anywhere between 2 to 100
million dong ($140 $7,000 USD), which many businesses say is not
enough of a deterrent. In rare cases where criminal procedures
apply, the penalty is still only between 20 to 200 million dong
($1,400- $14,000 USD)(*).
Limited
capacity of government agencies to manage trademark registration and
enforcement
As Vietnamese businesses
become more aware of the importance of having a trademark, the
number of applications for trademark registration is increasing
rapidly—in 2003, the NOIP (Vietnam's national trademark registration
agency) received almost 16,000 industrial property registration
applications. With a staff of 140 people and no representative
offices anywhere else in the country, the NOIP is ill-equipped to
handle this workload. In 2002, the NOIP launched a website that
provides basic statistics of IP registration and quite a few legal
documents; however, it does not contain basic guidelines, forms and
procedures for registration, and many IP professionals feel that
unless the website is consistently maintained and regularly updated,
it will not be very helpful.
Limited
understanding of trademark issues among businesses and lack of
available quality consulting services
Though they are starting
to recognize the importance, Vietnamese companies themselves are
reluctant to invest in developing a trademark. According to branding
experts, trademark and brand name development is so important that
it should be done in parallel with product development; businesses
in Vietnam, however, tend to put most of their energy into product
development, and only think of registering the trademark when the
product is being successfully sold on the market. This is
illustrated by the Saigon Tiep Thi study finding that only 16% of
Vietnamese companies have a designated marketing function, 80% do
not have a brand manager and 74% invest less than 5% of their
turnover in developing and protecting their trademark and brand
name.
Expertise in trademark
development is also lacking, not only within companies themselves,
but among local consultants as well. Most consulting firms only
register trademarks for clients; very few specialize in developing
brand names and trademarks. Some Vietnamese business owners say that
foreign consultants have expertise in the technical aspects of
developing a trademark, but are limited in their understanding of
local culture and mindset and thus are unable to provide effective
trademark development services.
(*) National Office of Industrial
Property of Vietnam, “Enforcement of Industrial Property Rights in
Vietnam." Hanoi, March 31, 2003.. |
