With the goal of becoming even more integrated into the world, the National Assembly of Vietnam has approved and ratified the newest amendment to the 17-year-old Intellectual Property Law. This amendment proves to be the most significant change to the law thus far. Here are a few of what we believed to be the most impactful of them.
The most recent addition to Vietnam's IP Law is "sound trademark". In countries like the United States and the United Kingdom, the sound of a Nokia phone booting up or the Harlem Globetrotters' court-entrance song, "Sweet Georgia Brown," are examples of trademarks that are not so much considered as marks per se in the rest of the world. As a result, it is unheard of (pun intended) to have it here in a developing nation like Vietnam given the inherent ambiguity and complexity of the matter. However, it won't be long until official guidance on the registration of this issue is supplied, and Vietnam will soon possess its very first sound trademark. We are hopeful for the future of the newest addition to the roster. The nation's attempt to adhere to international treaties and accords, including the CPTPP and EVFTA, is demonstrated by the recognition of sound mark protection, which will also give businesses more powerful tools to safeguard their intellectual property.
2. Third-party's Opposition
In addition to retaining the previous mechanism - known as third-party opinion, the 2022 IP Law introduced third-party objection. This allows a third party to object to an industrial property registration application. However, it is stated in the following Decree stated the Vietnam IP Office will only view this written opinion as "references", as it is not obligated to handle these opinion letters. The distinction between these two procedures is that, although the right to request a third party's written opinion may be used from the moment the application is published in the Official IP Gazette until the date the protection title is granted, the right to file an opposition is limited depend on the type of industrial property its oppose. For further detail, the right to file an opposition will only be available for use for three, four, five, and nine months, respectively, counting from the trademark, industrial design, layout design, and invention.
3. The definition of "well-known trademark" modified
Well-known trademarks are considered to be a type of passive trademark, with their ability to enforce themselves without registration - which is one of the conditions to be considered as a mark in Vietnam. It was a great concept, however fell short in execution in Vietnam. In the past, a mark could only be considered well-known if it satisfied two requirements: first, it had to be widely known among "consumers," and second, its reputation had to be well-established over all of Vietnam. As stated in the 2022 IP Law, the phrase "Consumers" refers to the general public rather than the "relevant public sector." Therefore, a trademark has to be extensively known by the Vietnamese general public throughout the entirety of the nation in order to be regarded as well-known. The trademark owner was obliged to provide supporting documents based on the eight criteria listed in Article 75 in order to establish the reputation of their mark. Because of this requirement, most trademark owners are unable to prove that their mark satisfies Vietnam's requirements for being a well-known trademark, referencing the lack of a guide on how to prove the establishment of said reputation.
In contrast to the TRIPS Agreement, this regulation is widely thought to set an excessively stringent requirement, which results in a situation where a mark cannot be recognized as well-known in Vietnam due to its inability to prove its popularity among the general public throughout Vietnam, despite being widely used in Vietnamese commerce and has been recognized as well-known in many countries. Thus, this rule has long been criticized as a legal roadblock that keeps the owner of well-known trademarks from exercising the rights that they should have under the unique protection mechanism of a well-known trademark.
As a result, with the new amendment, the word "consumer" is now replaced with "relevant public", with a clearer definition as an effort to reduce ambiguity. Furthermore, its example includes Consumers who are important to goods/services that display the mark; Producers or providers of products or services with the mark; Manufacturers or suppliers of goods/services bearing the mark; etc. More importantly, the requirement of fulfilling all 8 criteria has now been abolished in favor of only satisfying several of them in order to recognize well-known trademarks. Therefore, a massive legal roadblock has now been remove, providing with owners new way of protecting their intellectual property.
4. The introduction of Electronic Title
With the introduction of Decree 65, unless the owner/applicant explicitly indicates his/her preferences within their application, a protection title will be provided in paper format. This highlights a significant change in the way protection titles are issued in Vietnam, with electronic issuance now the norm. The shift to this format fits nicely with current trends of digitization, which could result in fewer paper documents and more effective administrative procedures. Applicants who may have particular needs or preferences for the original format are protected by their express decision to choose a paper-based protection title. This movement has the potential to enhance the effectiveness of intellectual property management, especially after the various delays due to the overt amount of registration.
5. "Bad faith" as an official opposition
In accordance with the former IP Law, if an applicant lacked the necessary capacity to register the trademark or if the mark itself did not meet the requirements for protection at the time of approval, all trademark protection was nullified. But for the first time, acts of "bad faith" are recognized under the Amended IP Law as a separate legal basis for contesting and nullifying a trademark application or registration. In particular, if the applicant applied for the trademark application in bad faith, or with malicious purpose, the protective title is nullified totally. As of now, there has not been guidance from the Ministry of Science and Technology on how to interpret and apply this "bad faith". The more detail through this separate Decree will make handling opposition and dismissal of the trademark registration more straightforward.
In summary, this will definitely be a new turning page for Vietnam, as it has been reported that the issue of "trademark squatting" (the act of registering known marks overseas in an effort to sell or undermine the rightful owner of said mark) is causing hesitant for foreign entities to invest in Vietnam. This phenomenon is not new, per se, it happened rampantly in China and other Southeast Asian nations. As such, it is welcoming for the Government to finally address such an issue.
In addition to bad faith, a new clause is included stating that a trademark registration certificate may be rendered void entirely or in part if the mark is amended in a way that alters or broadens its original meaning as stated in the registration application
6. Administrative Sanction
Unsurprisingly, the National Assembly chose to keep administrative punishments in place in addition to additional measures to curb IP infringement. In contrast, in one of the previous drafts of the amended law, administrative penalties were removed as a way to safeguard intellectual property rights. This action was met with strong opposition from a number of academics and legal experts who contended that owners would be dissuaded from protecting their rights because civil action is typically more costly and time-consuming than administrative fines. Furthermore, intellectual property infringement has proven to have a detrimental impact on consumer safety and social development in addition to the legal benefits that IP rights holders receive. While some consider this as a controversial move, this sparks a new trend toward more civil-oriented enforcement, thus reducing the burden on the state on an already more complex area. Now, the state can concentrate its personnel on areas like customs, counterfeiting, etc.
Article 1.79 of the Amended IP Law also introduces criminal culpability of commercial legal organizations in cases of intellectual property infringement, thereby intensifying the penalties for violation. This implies that if a legal entity's intellectual property breach could qualify as a crime under Vietnamese law. Furthermore, criminal prosecution for IP infringement is no longer restricted to individuals. The purpose of this modification is to provide uniformity between the Amended IP legislation's specific rules and the criminal law, specifically the Penal Code of 2015. The end game is, of course, to increase penalties in IP as well as reduce potential crime in the future.
7. Other notable provision
- The assignment of moral right
For every author, he or she has moral rights and economic rights in regard to his or her work. As such with the name suggested, economic rights can be freely transferred so that the author can hope to profit from their work from distribution rights, performance rights, copyright, etc. However, regarding moral rights, the prior IP Laws only permitted the transfer of the right to publish a work or the permission of another person to publish a work. Other moral rights could not be transferred under the previous IP Law. These rights included the ability to choose a workpiece's title, include a real name or pseudonym in the workpiece, have the real name or pseudonym announced when the workpiece is published or used, and guard against the integrity of the work being misrepresented by others.
The capacity to assign the right to select a workpiece's title to entities (or people) that receive the economic rights of that workpiece is now possible according to the Amended IP Law. This could result in a significant development concerning the preservation of the works that are still protected by copyright, notwithstanding the author's passing. There have been instances of derivative works that flagrantly violated the original's work integrity, which is able to have gone awry because the authors are no longer with us or are too sick to reply. The new amendment which permits the assignment of moral rights, is intended to deter similar kinds of violation and strengthen the safeguards for the author's work beyond their passing
- Previously expired trademark consideration time reduced
A trademark application will not be granted protection under prior IP law if it is confusingly similar to or identical to the registered trademark of another person for products or services that are similar to or identical to those for which the registered trademark has expired but is still active, within the last five years. The redesigned IP Law has cut this term to less than three years because it indicates that the five-year period is excessively long and no longer appropriate. This will open up more avenues for trademark registration, now that the possible challenging marks are now greatly reduced in number.
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.
