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Regarding acts of unfair competition, Article 130 of the Law on Intellectual Property 2005, as amended and supplemented in 2009, 2109 and 2022, clearly states the following cases:

“Article 130. Unfair competition behavior

The following acts are considered unfair competition acts:

a) Using commercial indications to cause confusion about business entities, business activities, and commercial origins of goods or services;

b) Using commercial indications to cause confusion about the origin, production method, features, quality, quantity, or other characteristics of goods or services or on the conditions for providing goods and services;

c) Using a trademark protected in a country that is a contracting party to an international treaty that prohibits the representative or agent of the mark owner from using such a mark that the Socialist Republic of Vietnam is not authorized to use. Also, a member, if the user is the representative or agent of the trademark owner, and such use is not consented to by the trademark owner and without good cause;

d) Registering, seizing the right to use or using a domain name identical or confusingly similar to another’s trademark, protected trade name or geographical indication that it does not have the right to use for the purpose of seizing domain names, taking advantage of, or damaging the reputation and reputation of respective trademarks, trade names, or geographical indications.

Commercial indications specified in Clause 1 of this Article are signs and information intended to guide the trade of goods and services, including trademarks, trade names, business symbols, business slogans, geographical indications, packaging designs of goods, and goods labels.

Acts of using commercial indications specified in Clause 1 of this Article include attaching such commercial indications to goods, goods packages, means of services, business transaction documents, means of transport, advertising facilities; selling, advertising for sale, stockpiling for sale, or importing goods bearing such trade indications.”

It can be seen that the law on intellectual property stipulates acts of unfair competition. However, not all acts of unfair competition are governed by intellectual property law; only acts of unfair competition related to industrial property rights are specified in Article 130 of the Law on Intellectual Property in 2005, as amended and supplemented in 2009, 2019, and 2022. Acts of unfair competition that violate the law on intellectual property only became illegal in 2019. On the other hand, acts of unfair competition not related to industrial property rights will only be considered a violation of competition law.

2. Common Types of Unfair Competition in Vietnam IP Landscape

Trademark Infringement and Misrepresentation: Copycatting established trademarks, names, or logos to deceive consumers and siphon market share is a rampant issue. This can range from blatant replicas of popular brands to subtle variations designed to exploit brand recognition.

In Vietnam's dynamic market, trademark infringement and misrepresentation rear their ugly heads like copycat chameleons. Imagine walking into a store thinking you're grabbing your favorite brand of sneakers, only to discover slightly tweaked logos and blurry fonts. That's trademark infringement at its simplest. But it goes beyond physical goods. Fake websites mimicking established brands, social media accounts spreading false promises, and even product names that sound suspiciously similar – all these are designed to deceive consumers and steal market share. This not only erodes trust in legitimate businesses but also stifles innovation, as companies hesitate to invest in unique trademarks when copycats can easily reap the rewards. Addressing this growing problem requires a vigilant eye, strong legal frameworks, and robust consumer education to ensure Vietnam's brand landscape flourishes with authentic voices, not deceptive echoes.

 

Industrial Design Copyright Violations: The piracy of innovative product designs, particularly in high-tech sectors like electronics and fashion, stifles creativity and undermines the competitive advantage of original inventors. These infringements transcend mere imitation; they represent a brazen appropriation of the creative spark that fuels technological advancement and aesthetic distinction. Imagine, for instance, toiling tirelessly over a novel smartphone design, only to see its essence replicated within weeks by unscrupulous competitors. Such acts not only devalue the original creator's intellectual property but also stifle the very spirit of inventiveness that propels a nation forward.

The consequences of these violations are far-reaching. For legitimate businesses, the loss of market share and brand recognition can be crippling, hindering investment and potentially leading to job losses. Consumers, meanwhile, are often duped into purchasing inferior products under the guise of authenticity, eroding trust in both the brand and the marketplace as a whole. Moreover, the rampant disregard for intellectual property rights sends a chilling message to potential foreign investors, potentially hindering crucial capital inflows that are essential for Vietnam's continued economic expansion.

 

Trade Secret Misappropriation: Stealing confidential business information, such as manufacturing processes, formulas, or customer data, provides an unfair advantage to competitors and erodes trust within the marketplace. Such acts are not mere commercial transgressions; they are the antithesis of fair competition, eroding the incentive to invest in cutting-edge technologies and stifling the entrepreneurial spirit that drives progress.

 

False Advertising and Misleading Information: Disseminating deceptive claims about a product's origin, quality, or benefits to gain an edge over competitors harms consumer trust and undermines fair competition. These are not isolated incidents; they represent a pervasive issue that erodes consumer trust, tarnishes brand reputations, and undermines fair competition

Consider the recent case of "Thần Dược Trị Bách Bệnh" (Miracle Elixir Cures All Illnesses), a supposedly all-natural tonic heavily promoted on social media platforms. Slick testimonials touted its ability to cure everything from chronic pain to terminal illnesses. However, an investigation by the Ministry of Health revealed the product contained potentially harmful chemicals and no trace of the miraculous properties advertised. This blatant deception not only endangered consumers' health but also cast a shadow of doubt on the entire natural medicine industry.

Such cases are not limited to the realm of health products. "Pump and dump" schemes involving manipulated stock prices, fake discounts on online shopping platforms, and exaggerated claims about the effectiveness of beauty products are all manifestations of this pervasive issue. The consequences are multifold. Consumers suffer financial losses, potential health risks, and a general erosion of trust in the marketplace. Legitimate businesses struggle to compete against deceitful practices, stifling innovation and fair competition.

 

Cyber Squatting and Domain Name Abuse: Registering domain names identical or confusingly similar to established brands to divert traffic and gain an unfair advantage is a growing concern in the digital realm. 

The recent case of BMW Vietnam serves as a stark illustration of this growing menace. In 2019, a Vietnamese individual registered the domain name "bmw.com.vn," capitalizing on BMW's renowned brand recognition. While adding the regional suffix seemingly differentiated the domain, the intent was clear: to mislead consumers and potentially profit from their confusion. BMW, recognizing the potential damage to its brand reputation and consumer trust, sought legal redress.

The Vietnamese courts, in a landmark decision, ruled in favor of BMW. The court recognized that the domain name was "confusingly similar" to the BMW trademark and that the registrant had acted in bad faith. This victory for BMW not only protected its brand but also sent a powerful message to the digital community: Vietnam's legal system stands firm against cybersquatting and domain name abuse.

Such acts of domain name abuse often extend beyond mere profit-seeking. In a recent incident, a political activist group registered a domain name deceptively similar to that of a government agency, utilizing it to disseminate false information and propaganda. This tactic highlights the potential for cybersquatting to disrupt public discourse and erode trust in official institutions.

The implications of these transgressions are multifold. Businesses face a daunting challenge in defending their online identities, incurring significant legal costs and potentially losing valuable brand recognition. Consumers are vulnerable to deception, lured into fraudulent websites, or exposed to misleading content. Moreover, the prevalence of cybersquatting erodes confidence in the integrity of Vietnam's digital infrastructure, hindering its ability to fully harness the opportunities of the online world.

 

3. Challenges and Future Outlook: Unfair Competition in Vietnam's IP Landscape

​Unfair competition casts a long shadow over Vietnam's burgeoning intellectual property (IP) landscape, threatening its potential for sustainable economic growth and global competitiveness. While progress has been made in addressing this issue, several key challenges remain, demanding focused attention and innovative solutions.

  • Weak Enforcement: Inadequate resources and bureaucratic inefficiencies hamper the legal system's ability to enforce IP laws effectively. This emboldens infringers and discourages legitimate businesses from seeking legal recourse.
  • Corruption: Entrenched corruption within certain sectors compromises the integrity of the legal system and undermines fair competition. Combating this requires robust anti-corruption measures and increased transparency.
  • Public Awareness: Consumers often lack the knowledge and tools to differentiate genuine products from counterfeits, making them vulnerable to deception and misleading information.
  • Technological Advancements: New technologies introduce novel forms of unfair competition, such as domain name hijacking and online piracy. The legal framework needs to evolve to keep pace with these evolving threats.
  • Harmonization with International Standards: Differences between Vietnam's IP framework and international standards hinder foreign investment and integration into the global IP system. Aligning domestic laws with international norms is crucial to attracting foreign investors and fostering collaboration.

Despite these challenges, Vietnam displays a strong commitment to tackling unfair competition. Several promising initiatives point toward a brighter future:

  • Enhanced Legal Framework: Recent revisions to the IP law and the establishment of specialized IP courts demonstrate the government's commitment to strengthening legal protections.
  • International Cooperation: Vietnam's active participation in global IP treaties and agreements promotes knowledge sharing and collaboration with other countries in combating unfair practices.
  • Technology and Enforcement Modernization: Investments in technology-driven enforcement tools and training for government officials can significantly improve the effectiveness of investigations and prosecutions.
  • Private Sector Engagement: Public-private partnerships can leverage the expertise and resources of businesses to raise awareness, develop training programs, and support enforcement efforts.
  • Empowering Consumers: Educational campaigns aimed at consumers can equip them with the knowledge and tools to make informed choices and report instances of unfair competition.

By addressing these challenges and seizing the opportunities presented by emerging solutions, Vietnam can create a level playing field that fosters genuine innovation, attracts foreign investment, and enables its IP landscape to flourish. The future of Vietnam's IP landscape hinges on its ability to overcome these obstacles and embrace a culture of respect for intellectual property, where creativity and ingenuity, not deception and exploitation, drive economic growth.

 

4. Conclusion:

Unfair competition remains a significant challenge in Vietnam's IP landscape, but the government, businesses, and international partners are actively working to address it. By strengthening legal frameworks, raising awareness, and investing in enforcement, Vietnam can create a more equitable environment for innovation and sustainable economic growth. The future of Vietnam's IP landscape hinges on its ability to tackle unfair competition and foster a level playing field that rewards genuine creativity and entrepreneurship.

If you need further explanation on this subject, please don't hesitate to contact us through email at dung@luatminhkhue.vn or phone number: +84986 386 648. Lawyer To Thi Phuong Dzung.