Enforcement of Intellectual Property Rights by Administrative Measures in Vietnam

By Attorney at Law Le Quang Vinh

Email: vinh@bross.vn

Administrative Measure at a Glance

Enforcement of intellectual property rights is one of the contents of state management of intellectual property that the National Assembly assigns to the Government and relevant ministries and organizations to organize and implement, including activities of inspection, surveillance of the obedience of the legislation on intellectual property and handle violations of the intellectual property law. Accordingly, the handling of organizations and individuals that violate the protected intellectual property rights of other organizations and individuals by administrative measures is the task of state agencies, including Inspector, Market Management Bureau, Customs, Public Security, People's Committees at all levels[1].

Administrative measures can be understood as a legal measure under the administrative legislation system of Vietnam which specifies administrative violations, administrative sanctions, forms and procedures for handling administrative violations, remedies, etc., to handle violations of state management regulations in a certain field. For intellectual property, the administrative measures as applicable may include forms of handling violations and measures to handle infringing goods, material evidences and means of administrative violations, particularly moreover it includes administrative sanctions (remedies for infringing acts) and remedies (remedies for infringing goods) prescribed in Article 214 of the Intellectual Property Law[2].

Article 211 of the Intellectual Property Law stipulates that there are 4 groups of acts of IP infringement subject to administrative sanctions, including:

a) Infringing upon intellectual property rights, causing damage to authors, owners, consumers or society;

b) Producing, importing, transporting or trading in intellectual property counterfeit goods specified in Article 213 of this Law or assigning others to do this illegal act;

c) Producing, importing, transporting, trading and storing stamps, labels or other articles bearing counterfeit trademarks or geographical indications or assigning others to do so.

d) Acts of unfair competition on intellectual property shall be administratively sanctioned according to the provisions of the legislation on competition.

Four key issues regarding the administrative enforcement against IP infringements comprise:

(a) Conditions for application of administrative measures;

(b) Principle of determining intellectual property rights infringement;

(c) Statutory description of administrative violations handled by administrative measures; and

(d) Procedures and making decision to sanction administrative violations.

1. Conditions for Application of Administrative Measures

To protect intellectual property rights by administrative measures, basically there are 5 main conditions as follows:

(a)        There is a legal basis to apply an administrative measure against a specific type of IP infringement, that is, there must be legal provisions describing or naming the infringement, the form sanctions and measures against administrative violations against individuals and organizations that committed acts of infringing upon intellectual property rights

(b)        There are legal provisions on procedures and process for IP holder to request enforcement agencies to apply administrative measures; there are legal provisions on procedures and process for citizens to denounce and propose the handling of violations by administrative measures; there are legal provisions on procedures and order for the enforcement agency to proactively detect and handle violations of the law on intellectual property.

(c)        There is a competent enforcement agency or person competent to take administrative measures prescribed by law with the functions, duties and powers, including the sanctioning competence when participating in handling a case by administrative measures

(d)       There is professional assistance made by an accredited IP infringement assessment body through its delivery of expert opinion, expert witness, or IP appraisal[3]. Such expert opinion may be provided by the right holder, or by the enforcement agency upon its request for referendum of IP infringement assessment

(e)        The enforcement agency that received the petition has the knowledge, experience, and capacity to confidently handle and issue a decision to sanction an administrative violation[4]

2. Principle of Determining Intellectual Property Rights Infringement

General principles for determining act of infringement of intellectual property rights is not specified in the Intellectual Property Law but merely provided in Decree 105/2006 / ND-CP as revised under Decree 119/2010 / ND- CP ("Decree 105 as revised”). According to the Decree 105 as revised, it is considered as an infringement of intellectual property rights only when the act simultaneously satisfies four factors:

a.         The subject under consideration is within the scope of the protected IP rights

b.         There are infringing elements in the subject under consideration

c.         The violating individual or organization is not the right holder or the person authorized by the right holder to use that IP rights.

d.         The act of infringement occurred in the territory of Vietnam[5]

The second factor - having infringing elements in the subject under consideration - often plays the most important role when the right holder needs to handle the infringement by means of initiating civil lawsuits. Below are guidelines for identifying infringing elements for certain types of intellectual property rights including patents, trademarks, copyrights and plant varieties[6].

For inventions, based on the comparison of the protection scope of the granted patent with the suspected subject, it is possible to determine whether or not there is an element of infringement in one of three forms:

(a)        The product or part of a product is identical or equivalent to the product or part (part) of the product is protected by an invention;

(b)        Process identical or equivalent to that of an invention protection domain;

(c)        Product or part (part) of a product manufactured by a process identical to or equivalent to a process covered by patent protection.

For trademarks (except for well-known trademarks[7]), signs suspected of infringing upon trademark rights of others are only considered to have contained infringing elements only when satisfying two conditions: (a) signs suspected to be identical or confusingly similar to the trademark being protected, and (b) goods or services suspected of infringing must be identical with or similar to those bearing registered trademark[8].

For copyright[9], by comparing the suspected subject with the protected subject, an infringing element can be found if it belongs to one of 5 forms:

(a)        Unauthorized reproduction of the work;

(b)        A derivative work is illegally created;

(c)        Works with forged name, signature of author, impersonation or appropriation of copyright;

(d)       The part of the work is illegally extracted, copied or assembled;

(e)        Products with an illegally disabled technical device.

For a plant variety, an infringing element may be found if it falls into one of four forms after comparing a suspected infringement with a plant variety protection title, a description of the plant variety protected by the protection grant agency

(a)        Using propagating materials of a protected plant variety to commit acts specified in Clause 1, Article 186 of the Intellectual Property Law without permission of the owner of a plant variety protection certificate;

(b)        Use of propagating materials of plant varieties specified in Article 187 of the Intellectual Property Law;

(c)        Using a name of a plant variety of the same species or species close to the species of the protected variety which is identical or confusingly similar to the name of the protected plant variety;

(d)       The form (a) or (b) above may also apply to harvested materials if the holder of title of protection does not have reasonable conditions to exercise his rights to the propagating material of that same 

3. Statutory Description of Administrative Violations Handled by Administrative Measures

Because intellectual property rights are the rights of organizations and individuals to intellectual property, in particular, copyrights and related rights, industrial property rights and rights to plant varieties, it can be seen that the intellectual property sector is under the state management by 3 different ministries, including the Ministry of Science and Technology, which performs the state management of industrial property, the Ministry of Culture, Sports and Tourism in charge of copyright and related rights, and the Ministry of Agriculture and Rural Development in charge of state management of plant varieties[10].

The law defines an administrative violation as an act committed by an individual or an organization, violating the provisions of law on state management that is not a crime and must be dealt with according to the law on handling of administrative violations[11]. Thus, in simpler terms, administrative measures only apply to infringements of intellectual property rights when there is a legal basis to assert that they are administrative violations, that is, an act infringement of intellectual property rights shall be regarded as an administrative violation only if the following four conditions are met:

(a)        That act is unlawful or violates the law on state management;

(b)        Such conduct is intentional or unintentional by an organization or individual

(c)        The social danger of infringement is not to the extent that it is considered a crime

(d)       The law requires that such infringement be subject to administrative punishment

Under the 2012 Law on Handling of Administrative Violations, the Government is tasked to guide the implementation of this act by issuing various Decrees specifying specific administrative violations, forms and levels of fines, remedial measures, competence to make records on administrative violations and competence to sanction administrative violations. Accordingly, corresponding to the above three areas of intellectual property, there are 3 Decrees issued correspondingly, Decree 131/2013 / ND-CP dated October 16, 2013 amended and supplemented under the Decree. 28/2017 / ND-CP dated March 20, 2017 ("Decree 131 as amended"), Decree 99/2013 / ND-CP dated August 29, 2013 ("Decree 99") and Decree 31 / 2016 / ND-CP dated May 6, 2016 is amended and supplemented under Decree 04/2020 / ND-CP dated January 3, 2020 (“Decree 31 as amended”). The following is a summary of some administrative violations in these 3 fields

3.1 Legal provisions describing administrative violations in the field of copyright and related rights under Decree 131 as amended

Decree 131 as amended prescribes 34 administrative violations, including copyright infringement, such as acts of transporting and storing pirated goods; infringing upon the right to credit his name, the right of paternity of a work; protect the integrity of the work; infringe the right to publish; infringes upon the right to make derivative works; infringing upon the right to perform in public; infringing upon the right to lease originals, copies of cinematographic works and computer programs; infringe the right to reproduce (copy); infringes upon the right to apply technological measures to self-protect copyright.

Violations of related rights include such as acts of infringement of the right to protect the integrity of performance images; infringes upon the right to fix live performances of performers; infringe the right to broadcast or otherwise transmit to the public unformed performances; infringe the right to reproduce audio and video records; use published audio and video records for commercial purposes; infringe the right to broadcast and re-broadcast[12]

3.2 Legal provisions describing administrative violations in the field of industrial property rights according to Decree 99

Industrial property area includes industrial property rights group which is formed only on the basis of registration such as invention, industrial design, trademark, and industrial property rights group established on the basis of non-registration as a trade name, anti-unfair competition rights. Decree 99 stipulates 4 violations of relevant regulations from Article 5 to Article 9, including specific violations of regulations on procedures for establishment, implementation and protection of industrial property rights; violating regulations on industrial property protection guidelines; violating regulations on industrial property representation; violating regulations on industrial property assessment; violating the regulations on sealing and temporarily seizing violating means during the inspection and examination. From Articles 10 to 14, Decree 99 regulates 4 acts of infringement of industrial property rights: infringement of patent rights, utility solutions, integrated circuit layout design; infringes upon rights to trademarks, geographical indications, trade names and industrial designs; acts of producing, importing, trading, transporting, storing goods for sale of goods with counterfeit trademarks or geographical indications; acts of producing, importing, trading, transporting and storing for sale stamps, labels or articles bearing fake marks or geographical indications; acts of unfair competition in the field of industrial property

3.3 Legal provisions describing administrative violations in the field of plant varieties under Decree 31 as amended

12 acts from Article 6 to Article 17 of Decree 31 stipulating violations of regulations relating to the protection of plant varieties, such as violating the regulations on obligations of protection certificate holders and authors of plant varieties. grow; violating the regulations on rights of protection certificate holders; violating regulations on production of plant varieties; violating regulations on trading in plant varieties

4. Procedures and Making Decision to Sanction Administrative Violations

4.1 Basic Principles

Due to the unilateral nature of the decision to apply administrative measures based on state power, the law clearly stipulates the principles that enforcement agencies must follow, including some of the following basic principles[13]:

a)         The sanctioning of administrative violations shall be carried out quickly, publicly, objectively, according to its competence, ensure fairness and law provisions;

b)         The sanctioning of administrative violations must be based on the nature, seriousness and consequences of the violations, the violating subjects and the mitigating and aggravating circumstances;

c)         Only sanction administrative violations when there are administrative violations prescribed by law.

d)         Persons with sanctioning competence shall have to prove administrative violations. Sanctioned individuals and organizations have the right to prove themselves or through their lawful representatives to prove that they have not committed administrative violations;

e)         Violating organizations and individuals must be subject to one of the main sanctioning forms of warning or fine, of which the maximum fine for individuals is VND 250 million and for organizations is VND 500 million. Particularly for plant varieties, the maximum fine level is VND 100 million for organizations or VND 50 million for individuals

f)         Additional sanctions may be imposed depending on the seriousness of violations in the field of industrial property: confiscation of material evidences and means of violation, including goods with counterfeit trademarks or geographical indications, raw materials, materials and means for producing and trading goods with counterfeit trademarks or geographical indications; suspend production and business activities for 1 to 3 months

g)         One or several remedial measures that may be applied include: forcible removal or destruction of infringing elements, forcible change of enterprise name, forcible change of domain information or return of domain names applicable for industrial property rights; Forcible revocation of certificates of registration of copyright and related rights, and forced return to authors, owners of material benefits and remuneration earned from violations of copyright and related rights. agency; In the field of plant varieties, remedial measures may include suspending operation for a definite period of time, forcing the transfer of the right to use plant varieties, forcing the fulfillment of obligations to help owners of Protection Titles maintain propagating materials of protected plant varieties;

h)         The statute of limitations for sanctioning an administrative violation is 2 years counting from the time the violation has been completed or from the time the violation is detected for an ongoing violation.

i)          Independent from the administrative sanctions under decisions on administrative sanctions, individuals or organizations committing administrative violations may still have to pay material damages to rights holders according to civil law provisions.

k)         It is strictly forbidden to retain cases with criminal signs for handling administrative violations.

4.2 Procedures and Making Decision to Sanction Administrative Violations

Decree 131 as amended and Decree 31 as amended do not specify the procedure for handling violations of copyright, related rights and rights to plant varieties like the process of handling violations of industrial property rights in Decree 99. Under Decree 99, most cases of administrative violations of industrial property rights are handled only at the request of the right holder, according to which a case of infringement of industrial property rights can generally be described by the following steps[14]:

Step 1 - Preparing and filing a request for handling of a violation: The request must state the name of the enforcement agency, the relevant protected intellectual property subject matter, suspected infringing goods / services, name and address of the violating organization or individual, evidence proving the violation and documents proving the eligibility to file the request by the right holder.

Step 2 - Accept the request within 10 working days. This step includes receiving and reviewing petitions, including determining the authority to handle violations and checking the validity of documents and evidence. If the request is found to be incomplete, it may request the right holder to supplement documents, evidence or explanation for up to 30 days. In this step, the enforcement agency may solicit or consult professional opinions of the state agency on industrial property or conduct a referendum for IP infringement assessment to clarify details of the case;

Step 3 - Request for explanation. The enforcement agency may request the party subject to administrative handling to provide information, documents, evidence or explanation within 10 days after the enforcement agency issues a notice to the alleged infringer or from the date of making inspection records, minutes of administrative violations. The alleged infringer may request an extension of the time limit for explanation mentioned above but must not exceed 30 days from the date of making the inspection record or record of administrative violation. The purpose of the explanation step is to give an opportunity to the alleged infringer to provide evidence, documents or counter-arguments to prove that he or she has not infringed the intellectual property rights of the rights holder, for example, his defense may include that suspected trademark is not deceively confused with the right holder’s registered trademark, the work is suspected of copyright infringement independently created by the alleged infringer, or the case in question may fall into exceptions to non-infringement (ie. the use of an invention, industrial design, layout design for personal needs or non-commercial purposes, or circulating, importing and exploiting the uses of the products that were legally marketed, including foreign markets (parallel import or grey market goods) by the right holder or other person authorized by him, etc.

Step 4 - Prepare to handle administrative violations. Within 30 days from the day on which the satisfactory request is received, the competent person shall notify the right holder of the intended time, procedures, handling measures and requests cooperation and support of industrial property rights holders in inspection, examination, verification and handling of violations.

Step 5 – Making a sanction decision. Decision on sanctioning administrative violations together with additional sanctioning forms and remedial measures, issued by enforcement agencies

4.3 Cases of refusal, postponement of handling violations

It should be noted that a request to apply administrative measures to protect industrial property rights may also be denied in the following 6 cases:

a)         The written request for handling of a violation is filed while there is a dispute over industrial property rights in question;

b)         The requester for handling of violations fails to meet the request of the handling authority for explanation and supplementation of evidence proving the status of industrial property rights holder and proving the violation;

c)         The statute of limitations for sanctioning administrative violations expires under Clause 1, Article 6 of the Law on Handling administrative violations;

d)         The verification results of the agency handling violations or police offices show that there is no violation as described in the application for handling of violations;

d)         There are conclusions, decisions or notices of competent agencies about the insufficient grounds for carrying out procedures for handling violations;

e)         Acts that are not considered violations according to the law on intellectual property or not subject to administrative sanctions under the provisions of this Decree.

Except for defined violations related to the production and trading of goods with counterfeit trademarks, fake geographical indications, packages, stamps, labels or other articles bearing forged trademarks or geographical indications, the enforcement agency that has accepted the request would stop the procedures for handling violations in 4 cases:

a)         There arises complaints, denunciations and disputes after accepting the petitions for handling of violations and must wait for the settlement results of the competent agencies;

b)         There are not yet sufficient grounds for determining acts of infringing upon industrial property rights after having accepted applications for handling of violations;

c)         The claimant for handling of the violation has a written withdrawal of the request to handle the violation;

d)         The parties agree to resolve the case without affecting the rights and interests of the third party, consumers and society.

Bross & Partners have had experience in criminal litigation and civil litigation in cases involving intellectual property rights as well as experience in handling infringements of intellectual property rights by administrative measures. Should you have specific needs, please contact: vinh@bross.vn; cellphone 84-903 287 057, 84-4-3555 3466; Wechat: wxid_56evtn82p2vf22; Skype: vinh.bross.

Bross & Partners, a renowned and qualified Patent, Design, Trademark and Copyright agent of Vietnam, constantly ranked and recommended by the Managing Intellectual Property (MIP), World Trademark Review (WTR), Legal 500 Asia Pacific, AsiaLaw Profiles, Asia IP and Asian Legal Business, is providing clients all over the world with the reliable, affordable contentious and non-contentious IP services including enforcement, anti-counterfeiting,  litigation regarding trademark, trade name, industrial design, patent, copyright and domain name.