Decree No. 97/2010/NĐ-CP of September 21st, 2010 of the Government on Sanctioning Administrative Violations in the Domain of Industrial Property
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NEW ACTS OF VIOLATIONS under sanction “To take advantage of the procedures for establishment, exercise and protection of industrial property rights to infringe the State benefits, public benefits, rights and legal benefits of other organizations, individuals” (Article 5.1(b), Decree No. 97/2010) “Production, import, trading, transportation, storing for sales of stamps, marks, objects bearing fake trademarks, geographic indications”. (Article 13, Decree No. 97/2010)
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A maximum fine of 500,000,000 VND will be imposed to an industrial property violation, stated the newly enacted Decree No. 97/2010/NĐ-CP of September 21st, 2010 of the Government on Sanctioning Administrative Violations in the Domain of Industrial Property (“Decree 97”) detailing the Ordinance on Handling of Administrative Violations, most recently amended and supplemented by Ordinance No. 04/2008/PL-UBTVQH12 dated April 2nd, 2008. This Decree will take effect and replace Decree No. 106/2006/NĐ-CP (“Decree 106”) which regulates the same issue on November 9th, 2010.
As an advancement compared to Decree 106, Decree 97 provides more specific stipulation on the forms of violation, forms of sanction, levels of sanction and forms of indemnification.
Addressing the fact that the current obscurity of Decree 106 relating to a maximum fine of administrative violations may not have been deterrent enough since it fails to subject violations in the domain of industrial property to criminal law, Decree 97 provides for the maximum fine of VND 500,000,000. This means that violations that are more serious than those subject to this level of fine may be subject to criminal sanctions. This is believed to be more effective in deterring potential violators from serious infringements.
Unfair competition in industrial property
Another notable development of Decree 97 is that it provides a clearer specification of “unfair competition”. Unlike Decree 106 which has triggered frequent controversial interpretations by simply mentioning unfair competition as a type of violation, Decree 97 specifically lists out acts to be deemed a violation. It also provides detailed levels of fine, additional sanctions and remedies.
While appreciating the advantages of this detailed stipulation, we suppose the highest level of fine for acts of unfair competition as of VND 70,000,000 may be considered as less preventive since it might fail to notice the potential intangible losses to lawful industrial property right holders such as economic goodwill, trade secret and market shares, etc.
Requisition for violation handling
Unlike Decree 106 which only provides for a general concept of claimer to violation handling, Decree 97 identifies a number of subjects who are entitled to file a requisition for the handling of industrial property right violations. In particular, besides owners and/or users of the industrial property rights who are directly affected by the violation, any organizations and individuals who are aware of such violation are entitled to request for the violation handling. This is believed to effectively facilitate the detection of industrial property right violations and, by also allowing authorization in the requisition process, facilitate the protection of industrial property right holders’ legitimate benefits.
Decree 97 also progresses by providing for a clearer procedure of the requisition, competent authorities for the violation handling, forms of evidence, valuation of damages and the composition of requisition dossiers so that claimers to industrial-right violation handling can avoid unnecessary confusion.
PHAM & ASSOCIATES