Vietnam IP Law: Transitional Provisions relating to consideration of invalidation of protection titles

Issues: Application of regulations promulgated before IP Law takes effect; The situation leads to the amendment to Article 220.3, IP Law 2005; The applicability of Decree No.63/CP of 1996 and/or Circular No.437/SC of 1993 in handling requests for invalidation of trademark registered  in dishonesty.

1. Overview on Transitional  Provisions

In fact,  after the Law on Intellectual Property was enacted in 2005 (‘the IP Law 2005”) effective as of July 1, 2006, in the process of popularizing and enforcing this law, some previously issued legal documents are no longer mentioned, giving the impression that their validity have expired.

However, in practice, there have been a number of disputes that require the application of regulations issued before the effective date of the IP Law to be resolved, by applying a so-called “transitional provision”. Transitional provisions are used, with specific restrictions, to regulate those legal relations which have formed or arose before the new legal document came into effect, and the legislation would apply retroactively.

Regarding this, Article 22 of Resolution No. 351/2017/UBTVQH14[1] provides as follows:

“Transitional provisions are defined as a separate article at the end of a legal document, named as "Transitional provisions" or set out as separate clauses in the articles that require a transitional provision or set out a separate clause in the provisions on effectiveness”.

2.  Summary of the application of transitional regulations in the IP field in recent years.

2.1  Before 2005

The 2005 IP Law took effect on July 1, 2006. Previously, the processing of IP applications and protection of IP rights were carried out in accordance with the Ordinance on Industrial Property Protection year 1989 and the Transitional Clause in Article 69 of Decree 63/CP[2], specifically as follows:

1. Applications requesting protection on the basis of the Ordinance on the Protection of Industrial Property of January 28, 1989[3] were filed with the National Office of Industrial Property before July 1, 1996, including applications submitted by post with postmark before that date continues to be handled according to the above Ordinance.

2. Protection titles are granted on the basis of the 1981 Regulations on initiatives and inventions, the 1988 Regulations on utility solutions, the 1982 Regulations on Trademark, the 1988 Regulations on  Industrial Designs 1988 or on the basis of the Ordinance on the Protection of Industrial Property of January 28, 1989, continue to take effect according to such documents until their expiration. After the respective validity period above, if requested by the Protection Title Owner, the Trademark Registration Certificates and Industrial Design Certificates shall be extended under the renewal provisions of this Decree and from the new effective period, all rights and obligations under the Protection Title will be applied under this Decree.

Thus, the transitional regulations were present in a number of legal documents issued before the IP Law came into existence and a number of disputes over the grant of protection titles were handled on the basis of those documents .  For example, in 1997, the National Office of Industrial Property (the predecessor of the NOIP now) considered the request of PESTBUSTER PTE Ltd. (Singapore) to issue Decision No. 65/QD/KN dated August 20, 1997 to invalidate the Certificate of Trademark Registration No. 14675 "PESTBUSTER" issued to Lim Hong Co., Ltd. on the grounds that this trademark copied the trademark "PESTBUSTER & Figure" that PESTBUSTER PTE Ltd. Company used before.

The above-mentioned decision of the National Office of Industrial Property is based on Articles 3, 25 and 28[4] of the Ordinance on the Protection of Industrial Property and Points 5.1.b and 6.2 of Circular No. 437/SC[5] of the Ministry of Science, Technology and Environment[6] and other legal documents in effect at the time of filing the application of Registration Certificate No. 14675 on August 16, 1994 (Protection title was issued on December 17, 1994)

2.2   From July 1, 2006 to 2010

(i) Transitional provisions of the 2005 IP Law:

The transitional provisions of the 2005 IP Law (Article 220) include 05 clauses, of which Clauses 2 and 3 are written as follows:

2) Any applications for registration of copyright, related rights, inventions, utility solutions, industrial designs, trademarks, appellations of origin, layout-designs, new plant varieties  which have been filed with competent authorities before the effective date of this Law shall  be handled in accordance with legal documents  at the time of the filing of the application.

3) All rights and obligations under protection titles granted under law in effect before the effective date of this Law and procedures for maintenance, renewal, modification, termination or invalidation, licensing of rights, assignment of rights, and settlement of disputes related to such protection titles shall comply with the provisions of this Law, except for grounds for invalidation of a protection title,  the regulations of the Laws in effect at the time of its grant.

There have been cases where the above transitional provisions have been interpreted and applied inconsistently. A typical example is the case of Company X  suing and requesting the Court to cancel the NOIP's decision to grant the trademark registration certificate "KINGMAX" to Company Y, which is adjudicated by the Supreme People's Court in Ho Chi Minh City  in 2009. Appellate  judgment No. 05/2009/HC-PT dated January 16, 2009 showed that the Court and the NOIP have different understanding of the above transition clause, specifically as follows:

- The NOIP argued that “the legal document in effect  at the time of its grant " must be understood as the document has been used [to process the application] to grant the protection title. Because the application for trademark registration "KINGMAX" was filed on October 12, 2005, before the 2005 IP Law took effect, so based on Clause 2, Article 220 above, Decree 63 / CP had to apply to examine the application and based on the examination results the NOIP issued Decision No. 1352/QD-SHTT to invalidate Trademark Registration No. 77256 "KINGMAX";

- While, the appellate court considered that “the legal document in effect at the time of its grant" is the IP Law because the Trademark Registration No. 77256 was granted  on November 24, 2006, after the 2005 IP Law took effect. Therefore, the Court applied the IP Law 2005 to consider the case, but did not deny the NOIP's point of view and held up the NOIP's decision.

(ii) The amended IP Law 2009[7] to amend Clause 3 Article 220 of the 2005 IP Law

In order to stop the above inconsistent interpretation, when the IP Law is amended and supplemented in 2009 (effective from January 1, 2010), the phrase "legal documents in effect at the time of Its grant" in Clause 3, Article 220 of the 2005 IP Law has been replaced by" ... legal documents used to consider the grant of protection titles " and thus those legal documents which have been used for considering the grant and are mentioned in the Decision to issue a protection is the legal basis to handle the request to invalidate such protection title.

2.3   From 2010 to present

Clause 3[8], Article 220 of the amended IP Law 2009 has been being applied to consider invalidation requests.

There are some typical cases as follows:

(i) Administrative lawsuit on trademark "X - Men, Figure".

MARVEL CHARACTERS, INC, USA (Marvel for short) sued the NOIP for issuing Decision No. A05811/QD- ĐK dated June 8, 2005 on granting Trademark Registration No.63481 "X - Men, Figure" for products in Class 03 to the  International Household Goods Ltd.(VN).  Marvel's argument was that the character X-Men  of Marvel is famous worldwide,  is protected by copyright and also protected as a trademark under Trademark Registration No.11455 in Vietnam. On March 29, 2013, the Hanoi People's Court applied the provisions that preceded the IP Law such as Article 785 of the Civil Code 1995, Article 6.1.h and Article 6.1.e, Article 6.2.d of Decree 63/CP to reject Marvel's request.

(ii) Case of disputes over trademark "AARDWOLF & Figure".

In May 2018, the People's Court of Ho Chi Minh City tried the case on which the Plaintiff - Wolf Industry Company- requested the Court to order the Defendant - STC Company - to withdraw the trademark registration application No. 4-2003-1139 filed at the NOIP on 24/02/2003 for registration of the trademark "AARDWOLF & Australian map image"; the trademark was registered under Registration No. 241401 dated March 11, 2015 according to Decision No. 15003/QD-SHTT of the NOIP.  Plaintiff sued because he believed that the Defendant was dishonest when filing the above trademark registration application.

In this case, Trademark Registration No.241401 has a filing date before the IP Law takes effect but is issued after the IP Law has been in effect for nearly 8 years (namely in 2015). The Court has applied the provisions in effect before the IP Law was enacted as Clause 2 Article 14, Article 15, Article 16, Article 23 of Decree No. 63/1996/ND-CP to handle the case and rejected the petition of the plaintiff.

3. Apply the transitional provisions in Article 220 of the IP Law in invalidating trademark registration on the grounds of dishonesty.

When considering the invalidation of the protection titles which have the filing date before the IP Law is enacted, the application of previous legal documents at each respective time is compulsory. In particular, the connotation of the provisions on dishonest acts in the filing of trademark applications has changed a lot in the law-making process. Specifically, some changes are as follows:

- Article 15.4 of Decree 63/CP (for applications filed in the 1996-2006 period under the 1995 Civil Code) regulates that “The applicant must ensure the truthfulness of the information about the right to file an application for obtaining protection title, about the applicant and the authors declared in the application”;

- Point 3.2 of Circular No. 437/SC of the Ministry of Science, Technology and Environment dated March 19, 1993 providing additional guidance on registration of trademarks for applications filed in the 1993-1996 period under the Ordinance on protection of industrial property regulates as follows:

The applicant must ensure the truthfulness of the purpose of the trademark registration. The purpose of the trademark registration is considered to be honest, if:

a) Trademark registration is intended only to use that mark for products (or services) produced (or provided) by the applicant, to mark that product (or service) and to distinguish the product (or service) from a product (or service) produced (or carried out) by another person; and

b) The trademark applied for registration is not intentionally copied, imitated or modified from a trademark used by others in order to confuse consumers with a trademark that is copied, imitated , modified.

It can be seen that the act of being considered dishonest in the filing of a trademark registration application has been identified in previous periods. Article 96.3[9] of the current IP Law does not specify dishonest behavior, making the content of this concept broader depending on the context and specific elements of the filed application. Because, in principle, what deviates from the normal standards has a potential risk of being considered dishonest ./.