By Le Quang Vinh, Senior Partner

vinh@bross.vn

Translated by Nguyen Thanh Hang

Bross & Partners

Introduction

Although Vietnam acquired the important victory in respect of invalidating two trademarks of Buon Ma Thuot coffee, which were illegally registered in China, the thorough consideration of international treaties and national laws relating to the possibility of  regaining a country's trademark or  geographical indication registered in another country as a referential lesson is extremely necessary

This article is published almostly based on the whole content of legal advice that Bross & Partners provided for the Dak Lak People’s Committee in 2011, including direct and written advices.

The Vietnamese State’s Intangible Property is Lost too Easily

The “Buon Ma Thuot” geographical indication (GI) for coffee protected in Vietnam on the basis of a decision No. 806/QĐ-SHTT issued by the National Office of Intellectual Property (NOIP) with recording number 0004 dated 14/10/2005, is the State’s property, which Dak Lak People’s Committee is authorized to apply by its own name.

Buon Ma Thuot coffee (sometimes also called as Buon Me Thuot/Ban Me Thuot/Buôn Ma Thuột/Buôn Mê Thuột/Ban Ma Thuột) is considered as an invaluable property and great pride of Viet Nam because Buon Ma Thuot is the capital of Vietnamese coffee, where coffee is grown, harvested, processed and exported, with the output accounting for more than 50% of the country's total output and coffee export value.

In 2010, an unexpected event for both the society and media was that the Chinese Trademark Office (CTMO) granted the protection of “Buon Ma Thuot” signs in the form of two exclusive trademarks for a Chinese company based in Guangdong province (China)

Destructive Effects and Legal Consequences of the Loss of GI

Buon Ma Thuot is a GI of Vietnam and a state’s property of Vietnam. Its foreign possession means that state’s property has fallen into others’ hand. The risk of being sued or being prevented from exporting at border gates for infringing on exclusive rights of two trademarks mentioned above may occur at any time because Article 52 of Trademark Law of the People's Republic of China 1982 (as amended the second time on 27 October 2001), provides that:“Any of the following acts shall constitute an infringement on the exclusive rights to the use of a registered trademark: (a) using a trademark that is identical with or similar to the registered trademark on the same or similar goods without permission of the owner of the registered trademark; (b) selling goods that infringe on the exclusive right to the use of a registered trademark”

The belief of foreign customers in Vietnamese coffee can be seriously reduced because customers can not distinguish between the real Buon Ma Thuot coffee (originating from Buon Ma Thuot) and the fake Buon Ma Thuot coffee (originating from China).

The Causes of Loss of GI Buon Ma Thuot in China

Geographical Indications or GIs are understood as a sign which identifies a product originating from a territory, region or locality within that territory and possess qualities, reputation or specific characteristics that are essentially attributable to that origin. Bordeaux (France) for wine, Scotland for spirits wishiky (Scotland), Idaho for potatoes (USA), Phu Quoc for fish sauce (Vietnam) are all well-known protected geographical indications. Meanwhile, trademarks are basically visible signs (including letters, words, drawings or images, or a combination thereof, represented in one or more colors), which are used in order to distinguish the goods or services of different organizations and individuals. CoCaCola for drinks, BMW for cars, Vinamilk for milk are all well-known trademarks.

The funtion of distinguishing the origin of products and services are presented at both GIs and trademarks is the first cause of conflict between trademarks and GIs. On the other hand, in most countries, exclusive rights to a trademark or a GI shall be just established when it is granted a protection title. These two fundamental causes lead to the legal conflict between GI and trademarks, even in many cases, this conflict have become a persistent legal big war for centuries, for example, the dispute between the United States and the Czech Republic concerning Budweiser's beer trademark of Anheuser-Busch InBev SA / NV, the world's largest brewery, and Budweiser Budvar Brewery, a Czech beer company which is currently using the protected geographical indications (PGI) in the EU, including "Českobudějovické pivo" and "Budějovické pivo" (ie. beer from Budweis) as typical cases. [1]

Essentially, GIs and trademarks are similar to each other in three aspects: (i) the signs can perform the function of distinguishing the origin of the goods/services (ii) the exclusive rights shall be established only on the basis of the grant of a protection title, that is subject to the first-to-file principle; and (iii) the granted exclusive right is only protected within the territory in which it is registered. The first difference, however, between a GI and a trademark exists in the term of protection, for the trademark is usually 10 years and can be perpetual subject to renewal fee payment, while the GI can be protected without term. Secondly, trademark applications are often quite simple, while requirements of application for a GI is very complicated, elaborate and time costly.

For the reason, GI “Buon Ma Thuot” was registered easily as a trademark in China because Guangzhou Buon Ma Thuot Coffee Co., Ltd took advantage of three above characteristics, particularly no one has filed applications for registration of “Buon Ma Thuot” for coffee earlier in China, no GI “Buon Ma Thuot” that has been filed or have been registered before the date of filing application of such company.

Assessing the Case in the Eye of International Law

It is easy to see that the registration of Buon Ma Thuot trademark by Guangzhou Buon Ma Thuot Coffee Co., Ltd is an act of competition contrary to honest practices in international trade. According to the Paris Convention for the Protection of Industrial Property (the "Paris Convention")[2], each member state must provide effective protection against acts of unfair competition and member states have the right to freedom of regulation in their law against such conducts. Article 10^bis of the Paris Convention provides that any act of competition contrary to honest practices in industrial or commercial matters may be considered as an act of unfair competition.The followings in particular shall be prohibited:

(i)        all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor;

(ii)       false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor;

(iii)     indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods. 

Article 10^ter of the Paris Convention provides that the Countries of the Union have the responsibility to assure nationals of the other countries of the Union to have appropriate legal remedies to effectively repress all the acts referred to in Article 10^bis mentioned above. Article 10^ter also stipulates that countries have the obligation to provide measures to permit federations and associations representing interested industrialists, producers, or merchandisers to take action in the courts or before the administrative authorities for the purpose of preventing any acts contrary to honest practices.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) was launched in the context of the global recognition of the growing relationship between intellectual property and commerce. Protection of intellectual property plays a great importance role with respect to trade and investment, therefore the protection and enforcement of intellectual property rights will "contribute to promotion, improvement, transmission and dissemination of technology, benefit both creators and users, as well as socio-economic benefits in general and ensure a balance between rights and obligations". To be responsive to this demand, with the advent of the World Trade Organization (WTO) in 1995 [3], the TRIPS Agreement was signed on April 15, 1994 and came into effect on January 1, 1995.

Related to this case, Article 22 of the TRIPS Agreement states:

(i)        Geographical indications are indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

(ii)       Members shall provide the legal means for interested parties to prevent: (a) the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of originin a manner which misleads the public as to the geographical origin of the good; (b) any use which constitutes an act of unfair competition within the meaning of Article 10^bisof the Paris Convention (1967).

(iii)     A Member shall, ex officio if its legislation so permits or at the request of an interested party, refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark for such goods in that Member is of such a nature as to mislead the public as to the true place of origin.

Hence, in terms of international law, the deliberate registration of the Buon Ma Thuot trademark of Guangzhou Buon Ma Thuot Coffee Co.,Ltdhas seriously violated the basic principles of international law, these include: unfair competition, establishment of industrial property rights in bad faith that is contrary to the world's honest practices, intentionally misleading the public as to the true origin of Buon Ma Thuot coffee.

Evaluating the Case under the Chinese Trademark Law

First of all, we need to see that both China and Vietnam are members of the Paris Convention and the WTO, so China (as well as Vietnam and other WTO members) is obliged to comply with the provisions of the Paris Convention and the TRIPS Agreement.

Specifically related to the illegal registration of Buon Ma Thuot trademark of Guangzhou Buon Ma Thuot Coffee Co.,Ltd, in accordance with the general principles stated in the Paris Convention and TRIPs, China has obligations and of course must (i) transpose its international obligations into its domestic law in order to prevent any acts of unfair competition or act in bad faith of any individual or organization, and (ii) specify and effectively enforce measures to ensure that the true owner of Buon Ma Thuot coffee is entitled to take legal action to invalidate two marks Buon Ma Thuot.

With regard to the obligation guaranteed by effective legal instruments intended to prevent the acts of unfair competition under the Paris Convention, Article 41 of Trademark Law of the People's Republic of China provides:

“Where a trademark is registered in violation of the provisions of Article 10, 11, or 12 of this Law, or it is registered by deceitful or other illegitimate means, the Trademark Office shall cancel the trademark. Any unit or individual may request that the Trademark Review and Adjudication Board make a ruling to cancel such a registered trademark.

Where a trademark is registered in violation of the provisions of Article 13, 15, 16, or 31 of this Law, the owner of the trademark or any interested party may, within five years from the date the trademark is registered, request that the Trademark Review and Adjudication Board make a ruling to cancel the trademark. Where the trademark is registered with ill will, the owner of the well-known trademark shall not be limited by the five-year period.

In addition to circumstances specified in the preceding two paragraphs, any person who intends to take issue on a registered trademark may, within five years from the date the trademark is registered upon approval, apply to the Trademark Review and Adjudication Board for a ruling.

After receiving the application for a ruling, the Trademark Review and Adjudication Board shall notify the parties concerned and ask them to put forward their arguments within a specified time limit.”

Regarding the obligation to ensure that the public can not be mistaken the commercial origin by the use of indications misleading as to the origin of goods or services under the Paris Convention, Article 10 of  the Chinese Trademark Law provides:

“No geographical names of administrative divisions at or above the county level or foreign geographical names known to the publicmay be used as trademarks, except where geographical names have other meanings or constitute part of a collective trademark or certification trademark. Registered trademarks in which geographical names are sued shall remain valid.”

As regards the obligation to comply with the requirement that Member States must provide the legal means to prevent the use of indications misleading the public as to the geographical origin of the good under Article 22 of the TRIPS Agreement, Article 16 of Trademark Law of the People's Republic of China 2001 states:

“Where a trademark bears a geographical indication of the goods when the place indicated is not the origin of the goods in question, thus misleading the public, the trademark shall not be registered and its use shall be prohibited. However, where the registration is obtained in goodwill, it shall remain valid.

The geographical indication mentioned in the preceding paragraph means the origin of the goods the special qualities, credibility or other characteristics of the goods and it is primarily determined by the natural factors or other humanistic factors of the place indicated.”

Hence, as a member of the WTO and in terms of national law, the above provisions in Trademark Law of the People's Republic of China 2001 clearly show that deliberate registration of the Buon Ma Thuot trademark constituted (i) acts of unfair competition contrary to the world's honest practices, and (ii) this conduct is obviously being confused and misleading the public about the honest geographical origin of the Buon Ma Thuot coffee.

[To be continued…]

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[1] See more https://en.wikipedia.org/wiki/Budweiser_trademark_dispute

[2] The Paris Convention was adopted on March 20, 1883 and amended on September 28, 1979. As of January 15, 2002, 162 countries were members of the Convention. Vietnam acceded to this Convention on March 8, 1949 (under the old regime) and announced its continued participation on April 30, 1975. China has acceded to the Convention since 19 December 1984, which entered into force on 19 March 1985. Source: World Intellectual Property Organization (WIPO): http://www.wipo.int

[3] China has been a member of the WTO since December 11, 2001. Vietnam has been a member of the WTO since January 11, 2007. As of July 23, 2008, there were 153 WTO members. WTO source: http://www.wto.org