Managing partner, Pham Vu Khanh Toan commented on conflict of rights between trade name and trademark

1. FACTS (Extraction from Judgment 56/2013/HC-PT dated 09/4/2013)

On 27/12/2002 Xuan Mai Co., Ltd. (‘Xuan Mai’) was granted by Hoa Binh Provincial People's Committee a permission to build a cement factory in Thanh Lap Commune, Luong Son District, Hoa Binh Province.

On 07/04/2005 Xuan Mai filed a trademark application and the Director of National of Office Intellectual Property (‘NOIP’) under the Ministry of Science and Technology (‘MOST) on 16/5/2007 issued Decision No. 5716/QD-SHTT granted trademark Registration no. 82 099 “Trung Son Mixture Pooc Lang Cement - Hoa Binh - Vietnam & Device” for cement products.

As a third party, Binh Minh Company (‘Binh Minh’) had a project of “Trung Son Cement Plant” located on the same area. This project has been granted permission by Hoa Binh Provincial People's Committee on 08/13/2003. On 06/4/2006, the Prime Minister allowed Binh Minh to invest the project “Trung Son Cement Plant” with the capacity of 2,500 tons of clinkers in Luong Son District, Hoa Binh Province.

* “Trung Son” is the name of commune in Luong Son Dist., Hoa Binh province.

On the basic of the trade name “Trung Son” of Binh Minh which was established prior to the Registration no. 82 099 “Trung Son Mixture Pooc Lang Cement - Hoa Binh - Vietnam & Device”, Binh Minh filed a cancellation action on 01/09/2010 against the Reg. 82 099 and then, the NOIP issued Decision No. 2470/QD-SHTT to cancel a partial Reg. 82 099 because the element of “Trung Son” in the mark of Xuan Mai was identical to the earlier trade name of Binh Minh. Disagreed with the reason for cacellation, Xuan Mai complained against the Decision with the NOIP.

On 13/5/2011, the NOIP issued Decision No. 904/QD-SHTT to reject the complaint of Xuan Mai. After that, on 14/7/2011, Xuan Mai started proceedings against Decision no. 2470/QD-SHTT.

At the First Instance Court of Hoa Binh Province People's Court issued a judgment dated 24/02/2012 uphold all the requests of Xuan Mai. On 29/02/2012 Binh Minh filed an appeal against the judgment of the First Instance Court.

After considering the case, the Court of Appeals dismissed the judgment of the First Instance Court and uphold the cancellation action. The Court of Appeals found that:

Article 6.2g of Decree 63-CP (as amended) provides that the signs are not eligible for protection as a trademark including: "signs, names (image, name, nickname, pseudonym), drawings, symbols are identical or confusion similarity to flag, national emblem, leaders, national heroes, famous people, geographical name, organizations of Vietnam as well as abroad if not permitted by the competent authorities".

Under this provision, the Court of Appeals weighted that to be not disclaimed the element of “Trung Son”, the application for trademark registration had to pertained to a “permission” from the competent authorities to use the sign of “Trung Son” on its products, in fact Xuan Mai had not got such permission.

In light of the above, according to the Article no. 205.2 of the Law on Administrative Procedures, the Court of Appeals decided.

DECISION

- Accepted and uphold the appeals of Binh Binh to cancel a partial Reg. 82 099 because the element of “Trung Son” because Xuan Mai had not obtain a permission from the competent authority to use geographical name of “Trung Son” as a trademark.

- Dismissed the judgment of the First Instance Court

2. COMMENTS

Managing partner, Pham Vu Khanh Toan commented on the case as follows:

A) Whether the name of “Trung Son Cement Plant” in the Project as mentioned above can be protected by law as a trade name? If the answer is yes, there was a conflict of rights on trademark and trade name protection. Under the circumstances, who became the owner of “Trung Son” would depend on what objects of industrial property rights being previously established. To answer this question, it should determine that what conditions for protection of trade name and when a trade name is protected and whether “a potential corporate name in a project” can be protected by the law as a trade name?

General conditions for trade names to be eligible for protection

Article 76 of the IP Law provides that a trade name will be protected when it is capable of distinguishing the business entity bearing such trade name from other business entities operating in the same business sector and locality. The rights trade name are established on the basis of legitimate use of such trade name without performing registration procedures. Article 16.2 of Decree No. 103/2006/ND-CP provides that scope of rights of a trade name is determined according to the scope of protection of the trade name, including the trade name, business domain and territory of business in which the trade name is legitimately used by the entity bearing such trade name. The registration of an appellation of a business organization or individual involved in procedures for business registration shall not be considered the use of that appellation but merely constitute a condition for the use of that appellation to be considered lawful.  

Under the provisions, a trade name is automatically protected when the trade name is actually and legitimately used. In our views, a trade name is firstly corporate name which being registered business activities in accordance with the Business law. Thus, in the particualar case, the industrial property rights of a trade name “Trung Son” has not arisen from the facts that Trung Son Cement Plant has not been established and registered its business activities. Furthermore, an important condition for protection of a trade name that is to be legitimately used by its own corporate having such trade name. Therefore, according to Article 123 and Article 124 of the IP Law, “a potential corporate name in a project” can not be protected by the IP law. Accordingly, the reason for cancellation of a partial trademark Registration 82 099 because it was identical to the name of project “Trung Son Cement Plant” of Binh Minh was not convincing.

B) The use of geographical names, “Trung Son” in the mark “Trung Son Mixture Pooc Lang Cement - Hoa Binh - Vietnam & Device”, needed to have a permission from the competent authority or not? And what conditions for geographical names to be used as a trademark?;

General conditions for a geographical name to be used as a trademark

In the Court of Appeals, the Court based on Article 6.2g of Decree 63-CP considered that the application for trademark registration had to pertained to a “permission” from the competent authorities to use the sign of “Trung Son”, whereas, Xuan Mai had not got such permission.

Under the Manual of Trademark Examining Procedure, the NOIP provides that a geographical name i) can be accepted as a trademark if “the sign contains a geographical name in combination with other distinguishable elements”; ii) can not be accepted as a trademark if "the sign contains an unique geographical name or an element of geographical name is more prominent than the others. These geographic names are typically from all level of district and upwards or might be at lower levels such as communes, villages etc. however, such places must have a reputation for its products and services. In the above case, Trung Son is name of commune and cement is not the local specialties. Therefore, it is not necessary to have a permission from the competent authority for trademark protection.

For further information about this case, please contact us via hanoi@pham.com.vn 

Pham & Associates