Tiếng Việt English  
Home Our People Experiences Associations Contact us
Fundamentals of Anti-Counterfeiting Legislation
(Ngày đăng: 2014-11-19)

Vietnam has developed substantive laws to fight the counterfeiting threat

The manufacture and trade of counterfeit products and copyright piracy are not only damaging the economy and the interests of rights holders, but also causing real harm to consumers’ health. This article reflects on the development of substantive laws and how these are enforced in the fight against counterfeiting and piracy in Vietnam.

‘Counterfeit goods’ were first defined in Decree 140/HDBT of April 25 1991 as goods “manufactured in violation of the laws having figures similar with those allowed by the State to produce, import and consume in the market; or those without the same usefulness as their origin, nature, name and utility”.

Due to the seriousness of such crimes, Section 167 of the 1985 Penal Code provides that those found guilty of manufacturing or trading in counterfeit goods may be subject to prison sentences of between 12 and 20 years, life imprisonment or even death sentences in the case of particularly severe crimes.

In order to overcome the limits of the 1985 Penal Code – which sets out no quantitative or qualitative standards with regard to this definition of ‘counterfeiting’ – the 1999 Penal Code, as amended, attempts to distinguish between formal and substantial counterfeiting. Substantial counterfeiting includes:

  • normal counterfeit goods, which are subject to Section 156 and punishable by imprisonment for up to 15 years;
  • counterfeit food, foodstuffs, curative medicines and preventive medicines, which are covered by Section 157 and punishable by imprisonment for up to 20 years, life imprisonment or the death penalty; and
  • counterfeit animal feed, fertiliser, veterinary drugs, plant protection drugs, plant varieties and animal breeds, which are covered by Section 158 and punishable by imprisonment for up to 15 years.

Formal counterfeiting or the act of infringing industrial property rights is seemingly criminalised separately by Section 171, which establishes punishments of up to three years’ imprisonment.

Although no definition of ‘counterfeiting’ is included in the 1999 Penal Code, the basic criminal components of Section 156.1 establish prison sentences of between six months and five years for the act of manufacturing or trading in fake goods which are the equivalent of genuine goods worth between D30 million and D150 million, or under D30 million but that cause serious consequences. The same punishments may also apply to persons who have already been subject to administrative fines for acts defined in this section or who have been already sentenced for one of these offences, but are not yet entitled to criminal record remission and who repeat the offence. Unlike the description of basic criminal components in Section 156, no basic criminal conditions are required by Section 157 if the fake commodities found are food, foodstuffs, curative medicines and preventive medicines, or by Section 158 if the fake goods found are animal feed, fertilisers, veterinary drugs, plant protection drugs, plant varieties or animal breeds

In respect of anti-piracy legislation, which is inherently deemed to refer to acts of copyright infringement, the 1999 Penal Code establishes a separate Section 131, which covers acts such as appropriation, wrongful assumption of the author’s name, illegal amendment of content and illegal broadcast or dissemination of literary and artistic works, as defined in the Berne Convention for the Protection of Literary and Artistic Works. Such acts shall be subject to a fine of between D20 million and D200 million or non-custodial reform for up to two years. In the case of organised crime, repeat offences or crimes that have very serious or particularly serious consequences, the offenders shall be sentenced to between six months’ and three years’ imprisonment.

Although no exact definition of a ‘counterfeit’ is set out in the Law on Intellectual Property of 2005, the phrase ‘intellectual property counterfeit goods’ – comprising counterfeit and pirated goods – is mentioned in Section 213. Thus, ‘counterfeit goods’ are goods or their packaging bearing a mark or sign which is identical to or indistinguishable from a mark that is protected for the same goods, without the rights holder’s authorisation; while ‘pirated goods’ are copies made without the rights holder’s permission.

The definition of ‘intellectual property counterfeit goods’ in the 2005 IP Law has done little to assist law enforcement bodies in deciding whether an act of counterfeiting constitutes a crime under  Section 156, 157, 158 or 171. Pursuant to the 2001 Conference on Intellectual Property held by the Japan International Cooperation Agency n Hanoi, between 1995 and 2000, a total of 387 cases relating to violations of Section 167 were adjudicated by the courts. Between 2002 and 2006 there were 1,092 cases involving the manufacture and trade of counterfeit goods, although 162 cases were prosecuted pursuant to the General Police Department of Vietnam, under the Ministry of Security. According to statistics issued by the Collective Department under the Vietnam People’s Supreme Court, between 2003 and 2007, no verdict relating to Section 171 was delivered by any court at any level. Instead, these cases were all instituted, investigated, prosecuted and adjudicated under Section 156, 157 or 158.

In compliance with Article 61 of the Agreement on Trade-Related Aspects of Intellectual Property Rights – which states that “members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale” – Vietnam amended and supplemented its 1999 Penal Code in 2009, with the amendments entering into force as of January 1 2010.

Vietnam has already repealed Section 131 – which established the crime of copyright infringement – and replaced it with Section 170a, which establishes the crime of infringing copyrights and related rights. The basic criminal components set out by Section 131 – namely, acts of appropriating copyright, wrongfully assuming authors’ names, illegally amending content or illegally announcing or disseminating works – have been limited to acts of reproducing works, phonograms or video recordings or distributing copies of works, phonograms or video recordings to the public. Further, the basic criminal components covered by Section 131 – namely, causing serious consequences or repeating the offence after having already been subject to administrative fines and not yet being entitled to criminal record remission – was replaced with a statement that punishments will apply to anyone who, without permission from the copyright holder or holder of other related rights, infringes on a commercial scale either copyright or related rights which are currently protected in Vietnam by Section 170a of the 1999 Penal Code, as amended.

According to Joint Circular 01/2008/TTLT-TANDTC-VKSNDTC-BCA-BTP of February 29 2008, issued by the People’s Supreme Court, the Supreme People’s Procuracy, the Ministry of Security and the Ministry of Justice – which was issued before the 1999 Penal Code was amended – ‘causing serious consequences’ should be construed as one of the following:

  • acting on a commercial scale and for commercial purposes;
  • causing material loss to the owner of the copyright or related rights of between D50 million and D150 million (including both losses arising from the infringement of copyright or related rights and expenses incurred by the owner to remedy the consequences of the infringement); and
  • trading in pirated goods valued at between D50 million and D150 million.

With respect to the infringement of industrial property rights, the applicable subjects set out by Section 171 of the 1999 Penal Code have been considerably narrowed. In particular, acts of infringing invention, utility or design patents or other industrial property objects are no longer criminal. As a result, only infringements of trademarks or geographical indications may be subject to criminal punishments. The basic criminal constitutions of Section 171, as amended have been significantly revised: only those who deliberately infringe protected trademarks or geographical indications on a commercial scale may be criminally liable.

Pursuant to Joint Circular 01/2008/TTLT, ‘on a commercial scale’ should be understood as one of the following:
  • gaining profits of between D10 million and D50 million;
  • causing material loss to the rights holder of between D50 million and D150 million; and
  • trading counterfeit goods valued at between D50 million and D150 million.
The Hanoi City Investigating Police Body and the Hanoi City People’s Procuracy accused Mai Ngoc Lam and his wife, Do Thi Thanh Binh – both shareholders of Hanoi Alcohol Joint Stock Company – of breaching Section 157.1. In particular, the defendants were found guilty of manufacturing and trading in counterfeit vodka in violation of Hanoi Liquor Joint Stock Company’s mark HANOI VODKA.

The defendants argued that they should be prosecuted not under Section 157.1, but rather under Section 171, since no basic criminal components are set out within Section 157 and it applies only to substantial counterfeiting – tests confirmed that the vodka itself was genuine and only the trademark had been infringed (ie, this was a case of formal rather than substantial counterfeiting). On November 10 2009 the Hanoi People’s Court issued a first instance judgment upholding the defendants’ conviction under Section 157.1 of the 1999 Penal Code and sentencing Mai to 24 months’ imprisonment and Do to an 18-month suspended sentence.

A similar case is underway in Ho Chi Minh City, which is one of the few cases relating to counterfeit goods to have been prosecuted under Section 171 since September 2008. On July 20 2007, in Indictment 306/KSDT-XXSTHS, the Ho Chi Minh City People’s Procuracy prosecuted Bui Trung Hoa, director of Cong ty TNHH nuoc giai khat Nam Binh, for illegally using the logo of two bulls colliding on 10,080 energy drink cans (420 pieces), which was considered confusingly similar to TC Pharmaceutical Industries Co, Ltd’s registered RED BULL mark and device – in accordance with Section 171.1 of the 1999 Penal Code.

The above case law suggests that the manufacture and trade in counterfeit goods that are deemed to have met the criminal provisions set out in Sections 156, 157, 158 and 171 have always been prosecuted under Sections 156, 157 and 158 – which deal with crimes relating to counterfeit goods – but not Section 171, which deals with the infringement of industrial property rights. Some argue that where no substantial counterfeiting is found, infringers should be prosecuted under Section 171, which is not only fairer, but also confirms the principle of individual criminal responsibility. It is hoped that basic criminal constitutions will be included in Sections 156, 157 and 158 to help procedure-conducting bodies to differentiate between such crimes.

"This article first appeared on the website http://www.worldtrademarkreview.com/. To view the issue in full, please go to http://www.worldtrademarkreview.com/Magazine/Issue/50/Country-correspondents/Vietnam-Bross-Partners”

Bookmark and Share
Most updated on the well-known trademark project
Brand names lost! Why?
How to solve dispute between Domain name and Trademark in Vietnam
Introduction to the Law on Competition of Vietnam
Recognition and enforcement of foreign arbitration awards in Vietnam

Publication - News
Doing business in Vietnam
Intellectual Property in Vietnam
International Registrations
Copyright © Bross & Partners All rights reserved.

Cửa thép vân gỗcua thep van go