Huge Trademark Backlog in Vietnam: Should Vietnam Reform its Current Trademark Examination System?

Attorney Le Quang Vinh – Bross & Partners

Email: [email protected]

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Trademark examination in Vietnam is currently considered sluggish (2-3 times slower than 9-month statutory time-limit), which is both frustrating for society and making the goal of the Prime Minister's 2019 IP national strategy difficult to come true. One of the main reasons lies in the large backlog of unexamined trademarks of 82.966 applications.[1] Being invited to present at the professional seminar on the afternoon of October 23, 2023 at the Intellectual Property Office of Vietnam (“VNIPO”), our proposal was that VNIPO should put trademarks at the heart of in a bold reform plan: Phase 1 (immediately proceeding) including 9 points, and Phase 2 (in two years or more) comprising 3 points.

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PHASE 1

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1.?? Promptly complete the Trademark Examination Guide, wherein should include a general rule on the settlement with conflicts with prior rights more scientifically to resolve disputes between applied-for marks and prior rights, including “bad faith” issues. These prior rights (currently available in Articles 74.2i, Article 74.2g, Article 74.2k, Article 87.7) are considered exceptions to the first-to-file principle and/or priority principle.[2] In order for any exception to be accepted, it is necessary to clearly stipulate the criteria for exception eligibility and the appropriateness of the substantiated evidence.

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2.?? The Nice classification should be regularly updated to add new products acceptable to the VNIPO. VNIPO should disseminate the acceptable goods/services, recommend applicants adopt those listed goods/services at the time of filing new application to likely enjoy priority for earlier examination over applications containing unlisted goods/services. About 60% of trademark applications are filed through IP representatives, so they can recommend their clients to choose acceptable goods/services with the aim of reducing diifficult applications, saving time for examination.

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3.?? Monitoring trademark applications having multple classes, or those containing both word and figurative elements, we see that the speed of examination of these applications is much slower than that of applications containing word mark only or few classes, or are variant marks filed under the same applicant. We know that it seems that the determination of the examiner's quota is based only on the application number, not on their difficulty or ease, so this is the reason why the examination speed of these applications is different. On the other hand, if we assume that the VNIPO is a company, in our opinion, it is necessary to redefine the norms to accurately assess productivity and KPI as a basis for considering bonuses, salaries to create fairness and working motivation for examiners.

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4.?? The stoppage of examination activities for all applications in the past 5 months due to changes in the IT system at the VNIPO was a very serious incident that not only caused great frustration for businesses, but also put great pressure on IP representatives to explain to their clients, as well as continiously increased the number of outstanding applications that putting greater pressure on the Trademark Examination Center. Therefore, we propose that it is necessary to upgrade and use IT infrastructure to always ensure efficiency and transparency. VNIPO should propose the Ministry of Finance fund money so that VNIPO implements the 2019 IP national strategy rather than doing its “special task”.

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5.?? There should be a mechanism to prioritize the quick examination of trademark applications whose grant/rejection has decisive significance in handling disputes, or to prioritize the processing of those being in use. Most trademark applications are yet to be used. Doing this will contribute to reducing frustration for society, IP representatives and VNIPO.

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6.?? It is necessary to build a complete and updated internal information exchange system to minimize mistakes due to lack of coordination and information exchange among VNIPO’s departments (especially between the Trademark Examination Center and Board of Appeals).

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7.?? VNIPO grants protection based on the minimum information source, not the maximum information source, so it is not too concerned about the likelihood of wrongly granting (the Legislature has removed Article 170 under the Penal Code 1999, decriminalizing the act of wrongly granting protection titles) because the VNIPO cannot control or does not have the conditions to know in advance whether a registered trademark conflicts with other’s prior right or not. VNIPO should accept the reality that registered trademarks may be subject to invalidation action, complaints, or administrative lawsuits. If these occur, the IP system will develop more balanced thanks to the counter-balance role of courts and other competent bodies.

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8.?? VNIPO should consider changing the mindset based on the prior pre-assumption to the post-assumption with respect to geographically misunderstanding, misdescriptive or deceptive marks (do not consider a sign automatically a false indication as to ?as long as there is convincing evidence to the contrary) because IP5 countries do not automatically equate geographical names with geographical origins (e.g. China and the US both assume that any foreign geographical name is not deceptive or misleading unless there is a basis to believe that geographical name is known to the Chinese or US public). “Tên ??a danh” (place name) should not be used since such term can be misundertood as the name of a place with reputation for a particular product. A suggested term with a broader connotation “geographical name” should be adopted in replace with “tên ??a danh” (place name).

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9.?? It is neither advisable and nor necessary to equate all business names (enterprise names) with tradenames by reason of three main reasons: (1) the boundary between trade names and trademarks lies in the way the sign is used, specifically If it is used to identify one business with another, it is called a trade name; if it is used to distinguish the origin of this product from the same product of another business, it is called a trademark (this perception is completely consistent with the WIPO’s theoretical fundamentals, the US perspective and even the 2022 IP Law itself); (2) Even though the right over tradename is automatically established like copyright (but copyright only arises if both conditions are met: originality and material fixation) then it does not mean that such right automatically arises in the business name, but that right exists only when a subject claiming rights to a trade name can successfully prove that the business name satisfies the conditions for protection as a trade name; (3) The IP law stipulates that the VNIPO has no obligation to prove the existence of a trade name, but the burden of proof lies with the subject claiming rights to the trade name. It is suggested that controversies and disputes related to trade names should be classified as disputes with prior rights, and it is best to let them be resolved by other procedures such as complaints, cancellation, or administrative or civil lawsuits.

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PHASE 2

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1.?? We propose to continue revising the 2022 IP Law to change the trademark examination mechanism (the current one is relatively outdated), thereby cutting some stages of the trademark examination process in accordance with one of two schemes:

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v Scheme 1: Cutting off formality examination and formality publication (Official Gazette A), integrating such formality examination with substantive examination, shortening 5-month opposition period to 3 months, changing the opposition mechanism (from opposition embedded in substantive examination stage to opposition after finishing the substantive examination), specifically after finding no absolute grounds or relative grounds, the VNIPO will announce the preliminary approval of the applied-for mark (this stage is equivalent to the current stage of issuance of notice of grant) for the third party to oppose within 3 months thereafter. Without opposition filed 3-month period, the applied-for mark will proceed to the stage of grant of trademark registration; or

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v Scheme 2: Like Scheme 1 but different in that according to Scheme 2 the VNIPO only publishes preliminarily approved applied-for mark (having met protection criteria) for third parties to object, and if there is no objection, the applied-for mark will become registered without having to pay grant fee (the VNIPO can include the grant fee in the application fee to compensate for not collecting grant fee).

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2.?? To build the system of similar group codes to automatically determine the similarity of products on the ground of sub-classification. Doing this helps the examiners free up 50% of the examination time because he/she does not have to compare the identity or similarity of products bearing the trademarks, but only compares the likelihood of confusiong between the trademarks. Furthermore, the sub-classification system will help reduce unnecessary controversies, disagreements, or inconsistencies between departments, especially reducing complaints.

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3.?? To recast Article 73 and Article 74 in the direction of clearly delineating absolute grounds and relative grounds.

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Bross & Partners, an intellectual property company ranked Tier 1 for 3 consecutive years (2021-2023) by Legal 500 Asia Pacific, has extensive experience in trademark registration and dispute resolution.

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Please contact Email: [email protected] ; Mobile:?0903287057; Zalo: +84903287057; Skype: vinh.bross; Wechat: Vinhbross2603.

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[1] Trademark applications in Vietnam almost filed by Vietnamese applicants, as one of industrial property applications, account for an overwhelming number with more than 60,000 applications per year, 7-8 times more than patent applications, or 19-20 times more than design applications. At the professional seminar on the afternoon of October 23, 2023, the Trademark Examination Center under the VNIPO reported that backlog for formality examination is 26,014 applications, backlog for substantive examination is 82,966 applications (wherein 71,249 are not yet substantively examined and 11,717 were provisionally rejected but not yet deemed finished).

[2] The priority principle under Article 91 of the 2022 IP Law is interpreted too narrowly. According to foreign legal practice, well-known trademarks and widely used trademarks (whether filed later than the disputed trademark, or not filed for registration), if recognized, are often considered to have superior rights. better than the first filing date of the disputed mark. This is a widely accepted argument in the practice of resolving trademark disputes, especially disputes related to bad faith factors in the world's largest IP systems.