Counterfeit goods can be found in every country in the world, and the fight against counterfeits never ends. Intellectual property rights (IPR) holders normally invest large amounts in tackling this problem to protect their business and reputation. The most effective measure they usually employ to stop ongoing infringements in Vietnam is to conduct administrative actions, or raids.
To minimize the risks and maximize the effectiveness of these the raids, IPR holders are advised to follow the steps below.
1. Conduct investigation and get bailiff notarization of evidence
Conducting an investigation into a suspected infringer is the first important step an IPR holder should consider adopting. The investigation aims to not only determine the infringer’s business activities and stock volume of the counterfeits, but also to detect locations connected to the counterfeits, especially any warehouses or storage areas. In addition, the investigation also focuses on collecting infringing evidence such as counterfeit samples, relevant price quotations, and other business materials, which can be used to persuade the enforcement authority to conduct a raid against the infringer.
Additionally, during the investigation, the IPR holder may arrange to have a test purchase and/or the infringer’s online commercial pages notarized by a registered bailiff. Such bailiff notarization would serve as incontestable evidence of infringement by the infringer before the enforcement authority if the infringer argues that the counterfeit goods were not traded by or purchased from him/her. Moreover, such bailiff notarization also aims to secure evidence before the court if the IPR holder wishes to claim compensation after the raid. In accordance with Vietnamese laws, such evidence will be easily accepted by the court with no need to reconsider its validity.
2. Evaluate infringement and legal grounds
Based on the investigation results, IPR holders can assess whether the infringer is a low-profile or high-profile trader, a supplier, or a manufacturer, so as to opt for an appropriate legal action and the right enforcement authority to handle the case. For example, if the infringer is merely a retailer or low-profile trader, IPR holders can, for cost-effectiveness, consider sending a cease-and-desist letter to such infringer to seek an amicable settlement rather than conducting a raid. (Of course, if the C&D letter fails, an escalation to a raid action is worth considering.) If the infringer is a high-profile trader, supplier, or manufacturer, the IPR holder should conduct a raid against the infringer to stop their infringements immediately.
In addition, IPR holders should determine the legal grounds for conducting the raid, such as whether they can conduct the raid on the grounds of trademark-counterfeit goods in accordance with Vietnam’s IP Law and related enforcement regulations, or on the grounds of labels or packaging which forge the company’s name or address, as prescribed in Decree No. 185/2013/ND-CP dated November 25, 2013 (as amended), on sanctions against administrative violations in commercial activities. The latter approach is appropriate for IPR holders whose trademarks or packaging designs have not yet been registered as IPR in Vietnam. Otherwise, taking enforcement action on the grounds of trademark-counterfeit goods is preferable because infringements of registered trademarks or designs are more straightforward, and IP-related sanctions imposed on infringers who are involved in trademark-counterfeit goods are more serious.
3. Choose appropriate enforcement authority
Under Vietnamese law, raids on counterfeits can be conducted through various enforcement authorities, including the Market Surveillance Department (MSD), the Economic Police (EP), and the Inspectorate of Science and Technology at the central level (Ministry of Science and Technology (MOST)) or provincial level (Department of Science and Technology). Therefore, IPR holders should consider the authorities’ competence, the nature of the infringement, and the scale of the counterfeits to opt for the suitable authority.
For example, if the infringer is a manufacturer, the EP or MOST should be chosen because the MSD is not entitled to conduct raids against a manufacturer. Or if the counterfeits are of a significant quantity, or related to health such as medicine or foodstuffs, the EP should be chosen, so that the IPR holder can consider opening a criminal case after the raid depending on the seriousness of the infringement. (In practice, the EP also prefers to handle such cases.)
4. Make initial check with authority and prepare complaint
To avoid delays in conducting raids, it is advisable to first check with the authorities, especially the EP and MOST, on the timing of when a raid can be done. Additionally, in some cases, when the infringing marks (especially logos) have a slight difference in terms of design, the authority may require the IPR holder to provide an expert opinion on infringement from the Vietnam Intellectual Property Research Institute (VIPRI). Checking with the authority first can confirm whether this VIPRI opinion is required (it usually is not) so that the IPR holder can proactively seek the opinion before submission of the complaint calling for a raid.
After checking with the authority, IPR holders should prepare a standard complaint, in which they include information on their IPR in Vietnam, details of the infringer, and its potential infringement(s). However, to avoid any possible leakage of information, the complaint should not provide too much information on the infringer.
In addition to the complaint, IPR holders should also prepare full supporting documents such as certified copies of trademark registrations (if the raids are conducted on the grounds of trademark-counterfeit goods), evidence of the infringements, and so on. In accordance with the enforcement regulations, it is also obligatory to provide the authority with an explanation on how to distinguish counterfeits from the genuine products. All of the supporting documents should be submitted together with the complaint to avoid further requests for supplementation from the authorities, which will, of course, result in delays in the raid process.
5. Follow up closely with authority and arrange pre-raid meetings
After submission of the complaint, IPR holders should proactively follow up with the enforcement authority to push the progress of the action. More importantly, the IPR holders or their counsel should also proactively arrange face-to-face meetings with the assigned authority to clarify everything, and provide further information such as the infringer’s business activities and network, the position of the counterfeits in its premises, and the location of any suspected warehouses or storage areas.
Moreover, the IPR holders via their counsel should cooperate with the authorities in conducting pre-raid verification, making test purchases if needed, and providing genuine and counterfeit samples for the authority’s reference. Good cooperation and a proactive follow-up with the enforcement authority in this stage will be supportive to a successful raid within the expected timeframe. Otherwise, delays from the enforcement authority can be expected.
6. Attend raids and post-raid working sessions
IPR holders may, in appropriate situations, proactively request the authority to join the raids in order to provide support in verifying the authenticity of the goods right at the spot, search for hidden counterfeits, and provide legal grounds to persuade the authority to seize goods bearing complicated marks, which may make the authority confused in determining whether they are counterfeits.
For example, as regularly seen for fashion products, counterfeit goods are often affixed with various labels, which can contain both the IPR holder’s registered trademarks and the infringer’s own marks and/or counterfeiter’s marks if the infringer is not the manufacturer, so the infringer may, during the raids, argue that these products are not trademark-counterfeit goods.
In those cases, the IPR holders need to affirm with the authority that the goods are still considered counterfeit because the prevailing laws do not stipulate that goods bearing both the infringer’s own marks/other marks and the IPR holder’s registered trademarks are not counterfeit. Instead, any goods which bear marks identical or nearly identical to the IPR holder’s registered trademarks are considered trademark-counterfeit goods, regardless of whether such goods also bear other marks.
If the infringer has business materials such as signs, business cards, brochures, leaflets, etc., containing marks identical to the IPR holder’s registered trademarks, the authority should be requested to seize them as well, because such materials can be considered trademark-counterfeit materials as provided by the enforcement regulations, and can be subject to another sanction for counterfeit materials.
The IPR holders should then, via their counsel, attend post-raid working sessions with the authority and the infringer to verify the seized goods and materials, and submit a confirmation letter about the inauthenticity of the seized goods to the authority. Based on such confirmation letter, the authority will issue an administrative sanction or decide to open a criminal case against the infringer.
As observed, counterfeiting is on the rise not only in Vietnam but also in neighboring countries, and conducting raids is the most effective solution to stop counterfeits immediately. However, IPR holders need to prepare carefully for this action. Otherwise they may place themselves in a passive position, and the results of the raids will not meet expectations. Therefore, the aforementioned steps not only provide IPR holders with an overview of raid procedures, but also suggest good plans for them to fight against counterfeit goods and manufacturers/traders of the same.