1. Differentiating Counterfeit Goods Crimes

In Vietnam, tackling counterfeit goods involves navigating two key articles within the Penal Code: Article 192 and Article 226. While both address intellectual property (IP) infringement, they differ based on the intent behind the act and the specific rights violated. Here's a breakdown to help you understand the distinction:

Article 192: Manufacturing and Trading of Counterfeit Goods

This article focuses on counterfeiting acts that aim to deceive consumers. It applies when someone illegally produces or trades goods that imitate the appearance of a protected brand with the intention of misleading consumers about the product's origin and quality.

Here are some key characteristics of crimes falling under Article 192:

Deception is Central: The counterfeit good closely resembles the genuine product in terms of branding, packaging, and potentially even functionality. This similarity aims to trick consumers into believing they are purchasing an authentic product.
Impact on Quality: Counterfeit goods often lack the quality control and standards of the original brand. This can lead to safety hazards or a diminished product experience for consumers.

Article 226: Infringement of Industrial Property Rights

This article deals with a broader range of IP infringements, not just counterfeiting with the intent to deceive. It applies to situations where someone exploits the rights associated with a protected brand, even if the imitation doesn't entirely mislead consumers.

Here are some scenarios that might fall under Article 226:

Free Riding on Brand Reputation: Someone uses a trademark or logo similar to a well-known brand to benefit from its established reputation and attract customers, without necessarily replicating the entire product.
Lower Quality Imitations: Someone produces a good that imitates a protected trademark but clearly identifies itself as a separate brand. However, the quality of the imitation might be inferior to the original.

Key Distinction: Intent and Deception

The main difference between the two articles lies in the intent to deceive consumers. Article 192 is stricter and applies when there's a clear effort to mislead consumers about the product's origin and quality. Article 226 covers a broader spectrum of IP infringements, including those that exploit a brand's reputation without necessarily deceiving consumers entirely.

2. Criminalizing IPR Infringement

In the past, enforcing intellectual property rights (IPR) in Vietnam faced challenges due to the lack of clear criteria for criminalizing infringement. However, the 2015 Penal Code, revised in 2017, introduced significant changes that strengthened the legal framework for IPR protection. This article explores the key elements that now define IPR infringement as a criminal offense in Vietnam.

The Shift from "Serious Consequences" to Measurable Criteria

Before 2017, the law required an IPR infringement to cause "serious consequences" to be considered a crime. This vagueness made it difficult for authorities to determine the severity of an infringement and pursue criminal charges. The revised Penal Code replaces this ambiguity with a set of quantifiable criteria, providing more clarity and predictability for both rights holders and potential infringers.

The Four Pillars of Criminal IPR Infringement

The current legal framework establishes four main criteria to classify an IPR infringement as a criminal offense:

Commercial Scale: The infringing activity must be conducted on a commercial level, implying a certain level of organization and potential for significant profit. Casual or small-scale infringements are unlikely to meet this threshold.
Earning Illegal Profit: The infringer must gain unlawful financial benefit from their actions. This could involve direct sales of counterfeit goods or the unauthorized use of copyrighted material for commercial purposes.
Causing Loss to the Owner: The legal owner of the IPR must demonstrably suffer financial losses due to the infringement. This loss could be a result of reduced sales, brand damage, or lost licensing revenue.
Value of Infringing Goods: The value of the counterfeit goods must exceed a minimum threshold set by law. This threshold varies depending on the type of IPR infringed (higher for trademarks and geographical indications compared to copyrights).

Benefits of Clearer Criteria

The introduction of these quantifiable criteria offers several advantages:

Enhanced Enforcement: Clear guidelines allow authorities to efficiently identify and prosecute criminal IPR infringements, leading to stronger enforcement.
Increased Predictability: Businesses and rights holders can now better assess the potential consequences of IPR infringement, promoting responsible behavior.
Stronger Deterrence: The defined criteria act as a deterrent, discouraging potential infringers by highlighting the risk of criminal prosecution.

3. Types of IP Rights Covered Under Criminal Law

Vietnam's legal system offers a robust framework to protect IP rights. However, it's important to understand that criminal penalties don't apply to all types of IP infringements. Here's a breakdown of the IP rights that fall under the scope of criminal law in Vietnam:

Protected Rights

Copyrights and Related Rights: The unauthorized reproduction, distribution, or communication to the public of copyrighted works (literary, artistic, musical, etc.) without the right holder's permission can be considered a criminal offense if it meets the established criteria (commercial scale, illegal profit, etc.). Additionally, violations of related rights, such as the rights of performers, producers, and broadcasters, can also be criminalized under certain circumstances.
Trademarks and Geographical Indications: The unauthorized use of registered trademarks or geographical indications on goods or packaging to deceive consumers about the product's origin can be prosecuted as a crime if it fulfills the legal requirements outlined in the Penal Code.

Excluded Rights

Industrial Designs and Patents: Although crucial forms of IP, infringements of industrial designs and patents don't currently fall under the scope of criminal law in Vietnam. These violations are typically addressed through civil lawsuits.
Trade Secrets: Misappropriation of trade secrets isn't classified as a criminal offense under Vietnamese law. Civil remedies are the primary means of seeking legal recourse for trade secret violations.
Unfair Competition/Passing Off: Acts of unfair competition, such as imitating a competitor's branding or marketing strategies to mislead consumers, aren't currently criminalized in Vietnam. These cases are generally handled through civil litigation.

Reasons for the Distinction

The decision to focus criminal enforcement on specific IP rights likely stems from factors like:

Severity of Harm: Copyright and trademark infringements often have a more direct impact on consumer trust and market competition compared to other IP violations.
Enforcement Challenges: Effectively investigating and prosecuting complex patent and trade secret cases might require specialized resources and expertise.

4. Transferring Cases to Criminal Authorities

In Vietnam, tackling intellectual property (IPR) infringements often involves collaboration between different entities. While administrative authorities might conduct initial investigations, more serious cases can be transferred to criminal authorities for further investigation and potential prosecution. This section explores the process of transferring IPR infringement cases to criminal authorities in Vietnam.

Who Can Initiate the Transfer?

Several parties can initiate the transfer of an IPR infringement case to criminal authorities:

Administrative Enforcement Agencies: These agencies, such as the Intellectual Property Office of Vietnam or market surveillance authorities, might gather evidence during investigations. If the evidence suggests the infringement meets the criteria for criminal prosecution (commercial scale, illegal profit, etc.), they can file a request to transfer the case to the criminal justice system.
Rights Holders: The owner of the infringed IP right can also play an active role. They can submit a formal complaint to the authorities, providing evidence and requesting the case be transferred for criminal investigation.

Factors Determining Transfer

The decision to transfer a case from administrative to criminal proceedings hinges on several factors, including:

The severity of the Infringement: Cases involving large-scale counterfeiting operations or significant financial losses are more likely to be transferred for criminal prosecution.
Evidence of Criminal Intent: The presence of strong evidence suggesting deliberate and planned infringement activities strengthens the case for criminal investigation.
Public Interest: If the infringement poses a significant threat to public safety or consumer welfare, authorities might be more inclined to pursue criminal charges.

The Transfer Process

The specific procedures for transferring a case can vary depending on the agency involved and the type of IPR infringement. However, it typically involves submitting a formal request to the relevant criminal investigation agency, accompanied by supporting evidence.

What Happens After Transfer?

Once the case is transferred, criminal investigators will take over. This may involve further investigation, gathering additional evidence, interviewing witnesses, and potentially detaining suspects. If sufficient evidence is found, the case might proceed to trial, and the infringer could face criminal penalties such as fines or imprisonment.

The Importance of Collaboration

Effective communication and collaboration between rights holders, administrative enforcement agencies, and criminal authorities are crucial for the successful transfer and prosecution of IPR infringement cases.

5. Criminal Procedure for IPR Enforcement

While the previous sections explored the criteria for criminalizing IPR infringement and the transfer process, delving into the specifics of criminal procedures goes beyond the scope of a general overview. The complexities of criminal litigation require expertise in Vietnamese law. However, here's a general outline to provide a basic understanding:

Applicable Laws

2015 Penal Code (amended 2017): This code establishes the legal framework for criminal offenses, including those related to IPR infringement. It defines the specific crimes, penalties, and procedures for investigation and prosecution.
Criminal Procedure Code 2015: This code outlines the legal procedures followed by law enforcement agencies during criminal investigations, trials, and appeals.

Key Stages of Criminal IPR Enforcement

Investigation: Upon receiving a transferred case, criminal investigators gather evidence, interview witnesses, and potentially detain suspects. This stage can be crucial in building a strong prosecution case.
Prosecution: If the investigation yields sufficient evidence, prosecutors file formal charges against the infringer. Pre-trial procedures might involve motions and hearings before the case goes to trial.
Trial: The trial itself follows established courtroom procedures, where both the prosecution and defense present their arguments and evidence. The court then issues a verdict, which can be appealed.
Sentencing: If convicted, the infringer faces penalties as outlined in the Penal Code. These can range from fines to imprisonment depending on the severity of the offense.

Additional Considerations

Complexity of Procedures: Criminal litigation involves complex legal procedures and requires expertise in Vietnamese law. Rightsholders are strongly advised to seek legal counsel from lawyers specializing in intellectual property matters.
Time Constraints: Criminal investigations and trials can take time. Rights holders should be prepared for a potentially lengthy process.

Importance of Legal Expertise

Navigating the intricacies of criminal procedures requires a thorough understanding of Vietnamese law. Consulting with experienced IP lawyers is vital to ensure a case is presented effectively and maximizes the chances of a successful outcome.

6. The Importance of Constant Vigilance

The fight against intellectual property (IP) infringement in Vietnam necessitates unwavering vigilance from both rights holders and enforcement agencies. While the legal framework provides a robust foundation for protection, a proactive approach is essential to safeguard valuable IP assets.

Why Constant Vigilance Matters

Dynamic Landscape: Counterfeiting operations constantly evolve, employing new tactics and technologies. Continuous monitoring allows rights holders to stay ahead of emerging threats.
Early Detection, Effective Action: Prompt identification of infringements enables faster intervention, minimizing potential losses and brand damage.
Deterring Repeat Offenders: Consistent enforcement efforts send a strong message to potential infringers, discouraging them from engaging in illegal activities.
Building a Strong Case: Vigilant monitoring helps gather evidence over time, strengthening the legal case against infringers when pursuing civil or criminal action.

Strategies for Constant Vigilance

Market Monitoring: Regularly monitoring online marketplaces, physical stores, and production centers can help detect potential infringements early.
Consumer Engagement: Encourage consumers to report suspected counterfeits through dedicated channels, fostering a collaborative approach to protection.
Brand Protection Measures: Implement robust trademark registration strategies and consider anti-counterfeiting technologies for products.
Collaboration with Authorities: Rights holders can build relationships with enforcement agencies to facilitate communication and coordinate efforts against counterfeiting.
Benefits of Constant Vigilance
Safer Products for Consumers: By combating counterfeit goods, consumers are less likely to encounter potentially unsafe or substandard products.
Fair Market Competition: Vigilance fosters a more level playing field, protecting legitimate businesses from unfair competition.
Preserving Brand Reputation: Proactive efforts safeguard brand image and consumer trust in the marketplace.
Enhancing Innovation: Effective IP protection encourages investment in research and development, leading to further innovation.

7. Conclusion

Vietnam's legal framework demonstrates a firm commitment to protecting intellectual property rights. This article explored key aspects of criminalizing IPR infringements, empowering rights holders to understand the criteria, navigate the transfer process, and appreciate the importance of collaboration with enforcement agencies. While the specifics of criminal procedures require legal expertise, this overview equips you with a foundational understanding. Remember, constant vigilance from both rights holders and authorities is crucial to effectively combat counterfeiting, fostering a more innovative and competitive business environment in Vietnam. By working together, we can ensure that creativity and intellectual property are valued and protected.

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