One morning, a California-based company mapping its Southeast Asia rollout opened an unexpected cease-and-desist letter from a Vietnamese IP firm. To the company’s surprise, the letter asserted that a local client already owned the company’s brand in Vietnam and threatened legal action. This is not an isolated incident. In another recent matter in the sports industry, a squatter demanded at least USD 48,000 from our client to “resolve” a similar conflict.

For brands entering Vietnam or expanding distribution there, these tactics can create acute risk at precisely the point at which market momentum is building. Vietnam’s rapid economic growth and deepening integration into global trade have made it an increasingly attractive destination for multinational brands. Those same dynamics have intensified a longstanding issue: trademark squatting.

Vietnam has modernized its IP framework over the past decade, but its strict first-to-file trademark system continues to incentivize opportunistic filings by parties with no legitimate interest in a mark. As more foreign brands build their reputation abroad before turning to Vietnam, squatters remain alert to timing gaps and enforcement frictions.

The First-to-File System: Advantages and Vulnerabilities

Vietnam adheres closely to the first-to-file principle under its Law on Intellectual Property. In practice, exclusive trademark rights belong to whoever submits the earliest valid application to the Vietnam Intellectual Property Office, regardless of prior use in Vietnam. This approach offers administrative clarity and reduces evidentiary burdens compared to use-based jurisdictions. Yet it also creates fertile conditions for squatting.

Bad-faith actors regularly monitor foreign markets, identify brands gaining traction, and move quickly to register those marks domestically, often long before the genuine owner enters the market or prioritizes local filings. By the time the true brand seeks protection, the squatter’s application (or registration) stands as a legal obstacle, pushing businesses toward costly oppositions, cancellations, or uncomfortable negotiations to buy back their own mark.

Despite periodic improvements to Vietnam’s IP regime, including greater recognition of bad faith in the 2022 amendments to the IP Law, the burden of proof remains heavy for legitimate owners. Demonstrating bad faith requires evidence that the applicant lacked legitimate intentions to use the mark or acted with unfair motives. That proof can be hard to marshal on short notice, particularly when the squatter has had the foresight to stage a minimal “use” narrative.

Practical hurdles flow directly from this system. Proceedings can be lengthy and costly, with contested registrations often remaining in force as oppositions or cancellations play out, while unregistered rights receive limited weight unless a mark can be established as “well-known”—itself a difficult and unpredictable process in Vietnam—and commercial urgency can pressure brand owners toward settlement even when legal principles disfavor rewarding bad-faith actors. These dynamics amplify the need for early filing, vigilant monitoring, and a disciplined evidence strategy.

Common Trademark Squatting Tactics in Vietnam

Trademark squatters in Vietnam deploy a broad spectrum of strategies, from crude to highly sophisticated. They preemptively register foreign marks, both famous and emerging, or file small variations that aid registrability while preserving bargaining value. They target visual assets that rights holders sometimes overlook, including stylized logos, trade dress, and distinctive packaging.

Many assemble a facade of commercial activity by registering a matching domain, setting up a local company, executing superficial license or distribution agreements, launching basic websites, issuing sample invoices, or showcasing products online. Increasingly, they augment these materials with AI-generated images to fabricate purported “use in commerce”.

In other instances, local distributors, resellers, or manufacturing agents attempt to register their principal’s mark in their own name as leverage in negotiations or to retain control when relationships sour.

Enforcement Posture: Zero Tolerance vs. Commercial Settlement

In our experience, brand owners often face a strategic fork. Some adopt a zero-tolerance approach and fight back, challenging the filing on bad-faith grounds, pursuing administrative or civil actions, and coordinating market and customs measures. With a flexible and evidence-driven strategy, we have successfully navigated clients through these risks, neutralizing squatters and restoring brand control without capitulating to ransom demands.

Others opt to settle, particularly where time-to-market is critical, product launches are imminent, or supply chains are already in motion. In these situations, a commercial resolution, however unpalatable, can be the least costly path to certainty.

The right choice turns on concrete business priorities, litigation risk appetite, evidentiary posture, and the availability of parallel pressure points. Legal avenues to combat bad-faith registrations exist, but can be time-consuming and uncertain.

The most reliable defense is to be proactive: File early and broadly, monitor diligently, preserve evidence of reputation and use, and deploy targeted bad-faith and unfair-competition arguments in a coordinated enforcement plan. A disciplined decision framework, grounded in early filing and robust monitoring, preserves options and bargaining power, whichever path is chosen, and is the surest route to protecting equity and sustaining momentum in Vietnam.

This article first appeared in Managing Intellectual Property.