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After successfully commercializing their branded products over several years, numerous trademark owners aspire to rejuvenate the visual identity of their brands. They seek to enhance the appeal and accessibility of their marks to the general public by introducing modifications to certain elements. However, a common misconception prevails among many owners who believe that once a trademark is registered, they have unrestricted freedom in its usage. This oversimplified perspective stems from a disregard or inadequate comprehension of intellectual property regulations, ultimately imposing a substantial cost on the trademark owner.

 

1. Typical trademark disputes caused by improper trademark use in Vietnam

#1) ASANZO vs. ASANO

The recent trademark dispute between Dong Phuong Trading and Manufacturing Co., Ltd (the plaintiff) and Asanzo Vietnam Electronics Joint Stock Company (the defendant) was heard by the People's Court of Ho Chi Minh City. The plaintiff alleged that the defendant's utilization of the "ASANZO, device" sign infringed upon their trademark "ASANO, device." Despite the defendant asserting that their use of the "ASANZO, device" trademark was lawful due to Vietnam IPO's registration approval for "ASANZO," the first instance court disagreed. Although the defendant's standalone "ASANZO" mark was protected, the court ruled that incorporating the device constituted infringement. Consequently, the defendant was mandated to cease infringement, issue a public apology, rectify the situation, and pay a fine of VND 100,000,000.

#2) ENAT 400 vs. E-NAT Plus

Mega Lifescience, a Thai pharmaceutical company, sought intervention from a Vietnamese Enforcement Agency in a trademark infringement case against Hiep Thuan Thanh Pharmaceutical Co., Ltd. In an administrative proceeding, it was determined that Hiep Thuan Thanh's "E-NATPLUS" was protected, but their use of "E-NAT Plus" for pharmaceutical products in Class 05 infringed upon Mega Lifescience's trademark "ENAT 400." The Vietnamese Enforcement Agency conducted a raid in Hapulico, a notable drug market in Hanoi, seizing over 700 boxes of the infringing product "E-NAT Plus."

#3) HAICNEAL vs. DIACNEAL

In 2003, Dihon Pharmaceutical faced trademark refusal from Vietnam IPO for "HAICNEAL" in Class 05, deeming it confusingly similar to the protected mark "DIACNEAL" for cosmetics (Class 03) and pharmaceuticals (Class 05) under IR No. 462008. To overcome the cited mark, Dihon Pharmaceutical initiated a cancellation action, arguing non-use of "DIACNEAL" in Vietnam for five consecutive years. PIERRE FABRE DERMO-COSMETIQUE, the trademark owner, countered with records proving registration and market presence of "DIACNEAL" acne cream. After a protracted review, Vietnam IPO, in 2010, cancelled IR No. 462008 for Class 05, highlighting that evidence for "acne cream" didn't establish use for "pharmaceuticals."

#4) Trademark Cancellation due to Improper Use

A third party initiated a non-use cancellation against a registered trademark incorporating verbal and figurative elements. Despite the trademark owner's submission of usage evidence to counter the cancellation, Vietnam IPO recently issued a decision invalidating the Vietnamese Trademark Registration. The decision stemmed from the conclusion that the provided evidence failed to reasonably establish the mark's use as registered, underscoring the importance of proper and substantiated use in maintaining trademark validity.

 

2. Risks due to improper use of registered trademarks in Vietnam

Utilizing a trademark divergent from its registered form involves inherent risks, particularly concerning potential infringement on another's trademark rights. The act of using a mark, as defined in this context, refers to the affixation of a mark to goods or means of service, serving the vital purpose of aiding consumers in distinguishing similar goods or services produced by distinct entities. The primary function of the mark is to distinctly identify the commercial origin of the goods or services adorned with the mark.

Upon receiving trademark registration, the owner is endowed with the right to "affix" the mark to the goods or services specified in the registration for commercial endeavors within Vietnam. It is crucial, however, that this utilization falls within the confines of the trademark protection's scope, determined by the registered mark's visual representation and the list of goods or services outlined in the trademark registration certificate.

Contrary to a common misconception, the mere registration of a trademark in Vietnam does not grant unrestricted freedom in its usage. While Vietnamese law does not explicitly mandate adherence to the registered form, the use must align with the protection afforded by law. Any deviation beyond the legal scope of protection, even for a registered mark, poses considerable risks. Such risks encompass administrative sanctions, where enforcement agencies such as the Market Management Bureau, Economic Police, and Science and Technology Inspectors can seize and destroy infringing goods, imposing fines of up to VND 500,000,000. Moreover, the right holder reserves the option to pursue compensation for both material and moral damages, demand an apology, and enforce public corrections through civil proceedings. The potential impact on a company's reputation and customer loyalty underscores the importance of vigilant adherence to proper trademark usage.

Beyond the immediate risks of administrative sanctions, there exists a more insidious threat— the risk of losing trademark rights altogether. Improper use of a trademark opens the door to third-party petitions urging the Vietnam IPO to cancel a registered trademark. If a trademark remains dormant or unused for five consecutive years from the date of registration, a cancellation may be initiated. Employing a trademark in a manner inconsistent with its registered form may be construed as non-use, jeopardizing the registered trademark's validity. In such a scenario, evidence of use, distinct from the registered mark, might face rejection by the Vietnam IPO, intensifying the vulnerability of the registered trademark to cancellation.

Compounding these risks, the trademark owner is not only obligated to use the mark but also to use it specifically for the goods or services registered. Using a trademark for goods related or similar to those registered is deemed inappropriate and inadmissible evidence to establish usage on the registered goods, as exemplified in the case of HAICNEAL vs. DIACNEAL. This underscores the meticulous attention required in maintaining the integrity of trademark use to safeguard against potential legal repercussions and the erosion of trademark rights.

 

3. What is the proper use of trademarks in Vietnam?

Vietnamese law and its practical application currently lack a precise definition of what constitutes the "proper use of trademarks." Nevertheless, as a participant in the Paris Convention, one can turn to Article 5.C.2 of the Convention for guidance on proper trademark use. This article outlines the permissible use of a trademark by its proprietor, allowing for variations in form as long as these alterations do not compromise the distinctive character of the mark as initially registered in any of the Union countries. In essence, this means that trademark owners have the flexibility to utilize their marks in different forms, provided that such variations do not alter the distinctive character of the mark as it was originally registered. Importantly, such use does not invalidate the registration and does not diminish the protection granted to the mark.

In simpler terms, the trademark owner is allowed to employ the mark in a manner different from its registered form, as long as the fundamental distinctive character of the mark remains unaltered. The crux of this legal provision is to empower trademark owners to modify their marks in response to evolving market dynamics without jeopardizing the unique identity and protection afforded to the mark.

The legislation's underlying intention is clear—to facilitate adaptability for trademark owners in adjusting their marks to suit the evolving landscape of marketing and promotion for related goods or services. This adaptability is crucial for businesses to stay relevant and competitive in the marketplace.

It is imperative to note, however, that any alterations made must involve indistinguishable elements, ensuring that the practical use of the mark and the registered trademark align fundamentally. This stipulation serves as a safeguard to prevent substantial deviations that might compromise the distinctiveness and integrity of the mark, striking a delicate balance between flexibility for trademark owners and the preservation of the mark's unique character.

 

4. Is it required to use the trademark precisely as it is registered?

This inquiry arises from a common practice among trademark owners in Vietnam, where, in the course of commercial use, they tend to undertake various modifications to their registered trademarks. These modifications may include altering the design, color, or stylization, removing certain elements, or introducing new elements to the originally registered trademark. A prevailing misconception among trademark owners is the belief that once their trademark is registered, they possess carte blanche to make alterations without encountering adverse consequences, such as the risk of infringing upon another organization's or individual's mark or facing potential invalidation of the registered trademark. However, this assumption proves to be far from the truth.

To elucidate the potential risks associated with such modifications, consider the following four scenarios, each illustrating the pitfalls that trademark owners may encounter when deviating from the registered form of their trademark. These scenarios serve as cautionary examples, shedding light on the complexities and potential legal ramifications involved in modifying a mark for actual use.

The overarching question that arises from these scenarios is whether modifying a mark for practical utilization or employing a sign in a form different from the one registered entails similar risks. To delve into this inquiry, let's explore a series of examples that delineate how a trademark owner may opt to utilize a mark in a manner distinct from its registered form. By dissecting these examples, we aim to provide a nuanced understanding of the intricate landscape surrounding the use of trademarks in varying forms and the associated legal implications.

 

5. How can using a trademark other than the registered trademark be less risky?

The legal landscape in Vietnam lacks a provision explicitly stating that the use of a sign similar or akin to a trademark registered by its owner immunizes them from accusations of trademark infringement by other entities. Consequently, employing such a sign does not ensure the trademark owner's immunity from potential claims of infringement by other organizations or individuals.

Examining emblematic cases such as ASANZO vs. ASANO and ENAT 400 vs. E-NAT Plus underscores the inherent risks of trademark infringement when owners opt to use a mark in a form differing from the one officially registered. Despite the existence of a registered trademark, utilizing a modified version of the mark can potentially expose the owner to legal liability for trademark infringement by other entities, as a sign distinct from the registered trademark is treated independently and not automatically linked to the registered mark.

To ascertain whether infringement has occurred, the Vietnamese enforcement agency scrutinizes three pivotal conditions: the similarity or identity of the sign to a protected trademark, the likeness or identity of the goods or services bearing the sign compared to those bearing the mark, and the potential for confusion regarding the commercial origin of the trademarked goods and services.

While the aforementioned cases suggest that trademark owners can, under certain conditions, use a mark in a form different from the registered one, mitigating risks requires a systematic approach. Several evaluation steps can guide this process:

STEP 1: Assessing Registered Trademarks: Evaluate registered trademarks by identifying distinguishing factors with strong visual impressions.

STEP 2: Assessing the Difference in Practice and the Impact of Changes: Evaluate whether factors contributing to the distinctive character of the registered mark are present in the modified mark in actual use. This involves a direct comparison to determine the degree of difference—whether major, significant, or small/negligible.

In general, these assessments aid in gauging the risk of infringement when modifying a registered trademark. To minimize this risk, several recommended strategies include:

  • Using the Mark as Registered: Adhering to the registered form of the mark provides a baseline for risk mitigation.
  • Preserving Distinctive Characteristics: Ensuring that changes to a mark in actual use do not alter the distinctive characteristics of the registered mark, ideally only modifying insignificantly distinguishable elements.
  • Applying for New Registrations: Seeking new registrations for marks whose actual use significantly differs from the previously registered one can enhance protection.
  • Registering Copyright: If conditions for copyright protection are met, registering copyright at the Copyright Office of Vietnam adds an additional layer of protection.
  • Conducting Availability Searches: Searching for similar marks in actual use that differ from the registered one can inform risk mitigation strategies.
  • Attacking Validity: If similar marks are found in searches, challenging their validity can be a proactive strategy.
  • Obtaining Assessment Conclusion: Seeking an assessment conclusion on the likelihood of trademark infringement from the Vietnam Intellectual Property Research Institute provides valuable insights for risk management.