Trademark Infringement Through Unauthorized Packaging - A Landmark Administrative Enforcement Case in Vietnam
April 2026, the Market Surveillance Authority of Dak Lak Province issued an administrative sanction decision against a Vietnamese company for manufacturing and distributing motorcycle coolant products bearing signs identical to the HONDA trademark.
This case provides an important illustration of how trademark rights are enforced in Vietnam, particularly in relation to unauthorized use of trademarks in packaging and labeling, even where the underlying goods are domestically produced.
I. Key Facts of the Case
- The infringing party: CNS Investment and Development Joint Stock Company (“CNS”);
- Conduct: Manufacturing, packaging, and distributing goods bearing counterfeit trademark signs
- Seizure: 4,800 bottles of motorcycle coolant (500ml each, stored in packaging bearing the HONDA mark
Notably, the alleged products did not bear the official “red seal” required by Honda Vietnam. Therefore, they were deemed unauthorized use of the trademark
I.1. Conclusion of Enforcement Authority
The authority concluded that the act constituted manufacturing goods bearing counterfeit trademarks under Vietnamese IP administrative enforcement regulations.
The legal basis for this decision is:
Decree 99/2013/ND-CP dated 29 August 2013 regulating penalties for administrative violations in the field of industrial property, amended and supplemented by ; Decree No. 126/2021/ND-CP dated December 30, 2021 and Decree No. 46/2024/ND-CP dated April 04, 2024.
I.2 Sanctions Imposed
The decision imposed a comprehensive enforcement package, including:
(i) Monetary Penalty: VND 168,000,000 (~USD 6,700)
(ii) Additional Measures: Suspension of manufacturing activities (2 months)
(iii) Remedial Measures: Mandatory destruction of all infringing goods (4,800 units)
III. Key Legal Insight
a) Trademark Use Is Conditional, Not Absolute
This case highlights a critical principle often overlooked in practice:
Trademark use is not merely about affixing a sign - it must comply with the authorization conditions set by the trademark owner.
In this case:
- Honda allows third parties to use its trademark only under strict conditions
- The “red seal” requirement operates as a control mechanism
- Absence of such compliance transforms otherwise lawful activity into infringement
b) Beyond Counterfeiting: A Licensing Compliance Perspective
This case goes beyond traditional counterfeiting, it represents a more nuanced form of infringement, that is Unauthorized trademark use arising from non-compliance with licensing conditions
This raises an important doctrinal point:
- Even if goods are not “fake” in substance
- They may still be considered counterfeit in law
if trademark usage is not authorized or improperly executed
IV. Implications for Businesses
This decision sends a strong message to manufacturers and distributors:
a) Compliance with Licensing Conditions Is Critical
Trademark use must strictly follow:
· Quality control requirements
· Packaging standards
· Authorization mechanisms (e.g., seals, labels)
b) Packaging Alone Can Trigger Infringement
Even without altering the product itself:
· Improper use of branded packaging = infringement risk
c) Administrative Enforcement in Vietnam Is Increasingly Robust
Authorities are willing to:
- Impose substantial fines
- Order destruction of goods
- Suspend business operations
V. Strategic Insight for Trademark Owners
For brand owners, this case confirms the effectiveness of:
- Controlled licensing systems
- Traceability tools (e.g., seals, authentication marks)
- Coordination with enforcement authorities
Such mechanisms not only protect brand integrity but also provide strong legal grounds for enforcement.
Conclusion
This case demonstrates a significant evolution in Vietnamese trademark enforcement: transitioning from simple counterfeit detection to the sophisticated oversight of authorized trademark use. It reaffirms a fundamental legal principle: trademark law protects not only the visual sign itself but also the underlying system of quality control and the proprietor’s right of governance over that sign./.
Pham Vu Khanh Toan
Attorney at-law, Registered IP Attorney
Managing Partner
PHAM & ASSOCIATES