Vietnam’s IP Law is fairly liberal on the rights to register marks. Under the law, any organization or individual has the right to register marks to be used for goods they produce or services they provide. In practice, except for collective marks or certification marks, which are strictly regulated, anyone (legal entities or individuals) can apply for a trademark or a service mark for any kind of goods or services, as the trademark office does not request any documents showing their legal status or intention of use at the time of filing. While this helps to simplify the process for trademark registration, the ease of filing for marks also results in the practice of trademark squatting.
Like many other countries, Vietnam applies the first-to-file principle, which gives priority to those who first apply for a mark. But unlike many countries, Vietnam’s IP Law does not provide that bad faith can be independent grounds for opposition, cancellation and refusal of a mark. Without the fear of the marks being refused/cancelled based on bad faith, there are many companies (and even individuals) whose sole function is to intentionally seek out and apply for others’ well-known or widely used marks which are not yet registered in Vietnam, with the ultimate goal being to sell these marks to the genuine trademark owners when the latter are interested in the Vietnam market. Losing nothing but a small fee for filing, these companies can be audacious. They duplicate others’ marks and file for exactly the same goods and services in any field, from cosmetics, to pharmaceuticals, to electronic appliances. Some companies have applied for more than 200 trademarks in dozens of different fields—despite not actually producing any goods or providing any services themselves. Most of these marks are the marks of other companies that are well-known globally, at least in their niche market.
While this may be clear evidence that the applicants are applying for these marks in bad faith, due to the first-to-file principle, and because Vietnam’s IP Law does not stipulate that bad faith can be independent grounds for opposition or cancellation, these questionable “prior marks” present very real challenges to the genuine trademark owners, who often find themselves in a weak position in the fight with the adverse party to take back their marks.
In rare cases the genuine trademark owners may be able to oppose/cancel the marks filed by the adverse parties if they can prove one of the following:
However, in cases where the mark is not yet in use in Vietnam and there is no relationship between the parties or no copyright involved, it would be extremely difficult for the trademark owner to reclaim their marks. Under these circumstances, the trademark owner may have to reach out to the trademark squatters to negotiate for the assignment of these marks. The trademark squatters, of course, would then request a sky-high price.
As trademark rights are territorial, this practice may happen anywhere and is definitely not a new issue. However, clear provisions on refusal/opposition/cancellation against bad-faith filing may help to mitigate this problem. Specifically, Vietnam may want to adopt the following U.S. and EU open approach on what acts may constitute “bad faith,” which are developed through court rulings in various cases, for example:
For the time being, while we wait for this loophole in the IP Law to be closed, trademark owners are advised to file for their marks in Vietnam as soon as possible. Otherwise, they may find themselves in an unwanted battle in which victory is hard to achieve.