Combat counterfeiting in Vietnam

According to statistics from the law enforcement authorities, at present counterfeit goods in Vietnam are mostly goods infringing industrial property rights, in particular, trademark rights. Trademark infringements (except for those which, constituting criminal offences, shall be settled by the criminal court) are more likely to be settled through administrative procedures than through civil proceedings, simply because administrative measures are more time-and-cost effective. Most of the trademark counterfeiting cases which have been settled administratively so far by the law enforcement authorities, are primarily based on the claims of the trademark owners. The legal basis of the claim is usually the registration of rights in Vietnam. In theory, it is possible to fight against trademark counterfeiting under the anti-unfair competition law, but because the implementing regulations have not yet been made available, this law is in fact unenforceable. Therefore, the trademark owners are then often advised to, on their own initiative, register their trademarks or industrial designs with the Vietnam National Office of Industrial Property (NOIP) and keep watching and monitoring their registered trademarks or industrial designs. Without registration of rights, it is almost impossible for the trademark owner to take action against trademark counterfeiting in Vietnam.

As an intellectual property representative in Vietnam, we have represented many clients in dealing with trademark and design counterfeiting in Vietnam. Our experience from these counterfeiting cases, especially from the recent Honda case, has shown the importance of (i) the NOIP’s formal conclusion that the acts committed or likely to be committed, infringe the owners’ industrial property rights, (ii) the work of interpretation of industrial property law for the law enforcement officials, and where it is appropriate, (iii) the arranging of meetings and addressing the issue with high-ranking officials in charge of the related matter in order to obtain the support from the government, and (iv) education to change public perceptions.

In the Honda case, the trademark and industrial design rights of Honda Motor Co. Ltd., (“Honda”) were seriously infringed both in terms of scale and duration by a number of Vietnamese importers, manufacturers and retailers engaged in trading motorcycles. They had imported from China isolated motorcycle parts, then assembled them with domestically made parts into finished motorcycles, and sold them in Vietnam at lower prices. A lot of these motorcycles contained designs and trademarks which infringed Honda’s registered WAVE and FUTURE trademarks or designs. The counterfeit motorcycles were accepted and widely used by a large number of the Vietnamese people over a long period of time, due to the comparatively economic prices.

To successfully handle the Honda case, concurrent works were carried out on the basis of market investigations. The market investigation was first necessary to determine the scope of the infringement, the identities of the infringers, and then the nature of the infringement. The data gained through the investigation became the grounds for making a plan of action.

Obtaining the NOIP’s official conclusion on the infringement of the owner’s trademark rights is always the first step which should be done by the trademark owners. This has become a common practice in Vietnam and therefore has also been applied in the Honda case. This is because the legal documents guiding the determination of infringement of industrial property are still unclear, hence, the determination of whether an alleged infringing act constitutes an act of trademark counterfeiting is still a matter of debate among law enforcement officials. In such circumstances, the NOIP’s official determination on the infringement would be given significant weight by law enforcement authorities.

Interpreting IP law to improve knowledge on the enforcement of trademark and design rights, and in particular to establish a close relationship with law enforcement officials is also critical to combating counterfeiting in Vietnam. This was clearly proved in the Honda case, where we, on behalf of Honda, worked closely with the economic police and the MMB in provinces and cities where the infringement occurred or was likely to occur.

The law enforcement authorities, in particular the economic police and the MMB have played an important role in the combat of counterfeiting. Vietnamese laws give them relatively sufficient powers to deal with trademark counterfeiting cases which are subject to administrative remedies. They can impose any appropriate statutory administrative measures within their competence, without the authorization of the court. On the basis of the NOIP’s determination on the IP infringement, they can order to apply provisional measures against infringers within a time limit which is much shorter than where the order is made by the court. In the Honda case for example, infringers were imposed monetary fines, thousands of WAVE and FUTURE counterfeit motorcycles were seized, and the infringing parts thereof were disassembled and destroyed by these enforcement authorities. In a situation where there are imported goods involving IP infringement, importation is suspended by Customs only upon, inter alia, the request of the IP right holders and a post of a bond equivalent to 20% of the value of the alleged infringing imported goods, causing a certain difficulty to the right holders. Therefore, the intervention by the economic police seems to be more effective and time saving. In the Honda case for example, the economic police informed us of any new consignments of counterfeit goods which were being transported to the provinces for sale. 

In particular, in cases where the counterfeiting has involved many infringers on a large scale and has involved the State management bodies, and has caused a greatly adverse impact on society and the economy, such as in the Honda case, arranging meetings and addressing the issue with high-ranking government officials is critical to the success of anti-counterfeiting efforts. As provided in the Prime Minister Directive 31/1999/CT-Tg on the combat of counterfeiting in Vietnam, anti-counterfeiting is the task of all society, primarily of the State management bodies and the administration at all levels. Therefore, depending on the field to which the counterfeit goods are related, the mentioned meeting should be made to seek for an intervention from the concerned ministry which has the state management function in the related field across the whole country.

Finally, one of the factors that is critical to the long-term success of anti-counterfeiting efforts in Vietnam is education aimed at changing public perceptions, to ensure that consumers are fully aware of the true impact of counterfeiting. In this connection, media and public relation activities play an important role. The media on the one hand educate public perceptions, and on the other hand increase the awareness of enforcement authorities regarding the nature of counterfeiting and its impact not only on the trademark owners but also the significant social interests, pressurizing and forcing the enforcement authorities to be actively and aggressively involved in day-to-day enforcement work. In the Honda case, besides publishing Honda’s warning notice on its IP rights to the registered trademarks and designs in Vietnam, a number of articles criticizing the counterfeiting problem and updating the information on the settlement of the infringements were also published. The destruction of the trademark-and-design-infringing motorcycle parts were publicly broadcast on television. All these works have caused considerable impact on both the Vietnamese motorcycle manufacturers, and the law enforcement authorities in the whole country, and are now step by step changing Vietnamese consumers’ attitudes towards the China-made WAVE motorcycles in Vietnam.