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Once a company’s trademark has been granted registration in Vietnam, protecting and exploiting this intellectual property becomes an essential factor in maintaining brand value and safeguarding the legal rights of the business. To ensure optimal protection, companies must proactively manage, monitor, and effectively exploit their intellectual property rights. This not only prevents infringement but also optimizes the commercial value of the trademark in business activities.
Legal Framework for Trademarks and Intellectual Property Protection in Vietnam
According to Clause 16, Article 4 of the Unified Document 11/VBHN-VPQH 2022 on the Intellectual Property Law (“Intellectual Property Law 2022“), a trademark is a sign used to distinguish the goods and services of different organizations or individuals.
A trademark can be a brand name, logo, symbol, or any visual element associated with a product or service. Registering a trademark not only affirms the business’s intellectual property rights to the trademark but also protects the brand from infringement such as copying or counterfeiting. This helps enhance the brand’s reputation and market value, while also boosting the company’s competitiveness.
The process of trademark registration in Vietnam involves multiple steps, from preparing documents, submitting the application to the Vietnam National Office of Intellectual Property, to examination and certification. Once a trademark is certified, the owner has exclusive rights to its use and can take legal measures to protect their rights if infringement is detected.
Intellectual property protection, especially trademarks, plays a crucial role in the long-term development strategy of a business. Owning a trademark not only helps the business avoid unnecessary disputes but also allows them to maximize the commercial value of the trademark through activities like exploitation, transfer, or franchising.
Protection Measures After Trademark Registration
Monitoring and protecting the trademark is a crucial step after the business has registered and received certification. Once the trademark is protected, the business must continuously monitor for any infringement, such as unauthorized use or copying of the trademark. This is both the right and duty of the trademark owner to preserve the integrity of the trademark.
Continuous monitoring, even after receiving the certificate of trademark registration in Vietnam, is particularly necessary because third-party infringement will not necessarily cease based solely on the registration certificate.
The Vietnam trademark certificate is only effective when adjudicating infringement cases and has a preventative effect, reducing the intention to infringe but does not offer absolute protection, especially if the business is not actively monitoring unauthorized use of the trademark.
If infringement is detected, the trademark owner can take legal measures to protect their rights. These measures include filing a lawsuit for compensation or requesting administrative sanctions from the competent authorities. In addition, the business can request temporary urgent measures to prevent further violations during the litigation process.
This is particularly necessary as legal proceedings may take years to reach a final decision, which is even more problematic given the overloaded legal system in Vietnam. Without temporary measures, the business may face more severe infringement during the litigation process.
To protect the trademark after successful registration, maintaining its validity is also crucial. According to Clause 6, Article 93 of the Intellectual Property Law 2022, the trademark registration certificate is valid from the date of issuance for ten years from the filing date and can be renewed multiple times, each for ten years.
To avoid losing protection rights, businesses must submit renewal applications on time. Furthermore, Clause 1, Point d, Article 95 of the Intellectual Property Law 2022 stipulates that if a trademark is not used continuously by the owner or the permitted user for five years without reasonable cause, the trademark ownership rights may be canceled. Therefore, frequent and reasonable use of the trademark in Vietnam is essential to ensure long-term benefits for the business.
Commercial Exploitation of Trademarks
Once a trademark is granted registration, it not only serves a legal protective function but also becomes a valuable economic asset for a business. The strategic use of a registered trademark can enhance the business’s market position and generate significant revenue.
Franchising is one of the most common ways to exploit a trademark. Through a franchise agreement, a business can expand its operations without directly managing each location. Franchising allows the company to increase brand presence and revenue without significant capital investment.
Another method of commercial exploitation is trademark assignment, where a business transfers the ownership of the trademark to another individual or entity. This can generate substantial income from the transfer of rights.
A trademark also serves as a powerful tool for brand promotion and differentiation. A strong trademark can attract customer trust, leading to increased sales and reinforced brand value. This heightened recognition gives the business a competitive advantage in the marketplace.
Additionally, businesses can license their trademark, granting third parties the right to use it for a specified period in exchange for a licensing fee. This generates revenue without the need for the business to engage directly in manufacturing or production activities. Overall, a trademark is an intellectual property asset with immense economic potential, which businesses should fully capitalize on to maximize benefits.
Challenges and Considerations in Trademark Protection and Exploitation
After a trademark is protected, businesses still face numerous challenges in effectively safeguarding and exploiting the trademark registration in Vietnam. Risk of copying or counterfeiting is one of the most common issues, even after the trademark has been granted protection or is in the registration process, and relevant parties have been notified.
Without proper monitoring and protection measures, businesses may experience infringement through the unauthorized use or replication of their trademarks, which can harm their reputation and brand value. Unauthorized use of the trademark could undermine customer trust, leading to significant financial losses for the business.
One common challenge for trademark owners is the failure to use the trademark within five consecutive years before a request for cancellation of its validity. This issue is prevalent among companies that use a “placeholder” strategy by registering trademarks for future products, only to delay their use until they identify a promising market opportunity.
For trademarks that are not in active use, the party requesting cancellation must provide evidence demonstrating that the trademark has not been used, as outlined in Clause 5, Article 124 of the 2024 Intellectual Property Law. Actions considered as trademark use in Vietnam include:
- Affixing the trademark to goods, packaging, business vehicles, or service documents in commercial activities.
- Selling, offering for sale, advertising for sale, displaying for sale, storing for sale, or transporting goods bearing the trademark.
- Importing goods or services under the trademark.
If the trademark owner can provide evidence of usage based on these criteria, such as displaying the trademark on valid advertising materials, requests for cancellation based on non-use are more likely to be rejected. Importantly, the use does not have to be directly by the trademark owner; subsidiaries or affiliated businesses may also count toward valid usage.
Even though the regulations on trademark use in Vietnam remain relatively flexible, this presents an opportunity for trademark owners to safeguard their rights, preventing the cancellation of their trademark for non-use due to insufficient scale.
It is vital for trademark owners to consider the location, duration, frequency, scope, and nature of trademark usage to prepare appropriately for specific cases. One effective form of trademark use might be affixing the trademark to invoices and other legal documents that can be verified by relevant authorities, without the need to invest in large signage.
This requirement for trademark usage is common in many developed countries as well. While regulations vary, they typically require use within 3 to 5 years from the registration date, and this rule applies even to well-known trademarks.
Additionally, a noteworthy case highlighted in Point i, Clause 1, Article 95 of the 2022 Intellectual Property Law stipulates that a trademark may lose its validity if it becomes a generic name for the goods or services it represents.
If a trademark becomes so widely used that consumers begin to treat it as a generic term for the product or service it represents, it loses its distinctiveness and capacity to differentiate. This situation occurs when the trademark no longer serves as an identifier for a specific brand but instead becomes a common term to describe a product category.
Examples of this can be seen globally, such as “aspirin”, which was originally a trademark for a pain-relieving drug produced by Bayer, but became a generic term for the medication. Similarly, “escalator”, once a trademark for a type of moving staircase, became a generic term for all such devices.
Conclusion
To protect their legal rights, businesses must strictly adhere to intellectual property regulations, especially in the use and exploitation of trademarks. This includes ensuring that trademarks are used appropriately and not infringing on the rights of third parties. Failing to do so may lead to legal disputes, wasting time and resources on resolving arising legal issues.
Finally, businesses should stay informed of legal changes related to trademark protection. Intellectual property laws are frequently updated to align with real-world conditions and international integration requirements. Thus, staying current with new regulations and ensuring compliance is crucial to protecting business interests and maintaining the validity of trademarks.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
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