Enforcing IP Rights with the Customs in Vietnam: A Case Study

shutterstock_118547785Border control can be an effective means for European SMEs for enforcing their IP rights in Vietnam, and it serves the purpose of preempting and suppressing IP counterfeits of SMEs’ products at Vietnam’s borders. Border control has gained more attention over the past few years from business owners wishing to protect their IP in Vietnam as the Vietnamese government recently granted the Customs more powers, making it more efficient.

Even though, Vietnamese Customs are actively looking for possible infringing products crossing the border of the country, it is advisable for the European SMEs to actively cooperate with the Customs authorities by recording their IP with the Customs and by actively monitoring the market and letting the Customs know of suspected infringing shipments, to fully benefit from the Customs protection.

How does Customs Protection Work

Vietnamese customs laws prohibit the importation of goods that infringe IP Rights, and Vietnamese Customs has the authority to impose fines on infringers and confiscate infringing goods for import. However, infringing goods for export are not subject to any penalties imposed by the Vietnamese authorities so far. If the infringement of IP Rights exceeds a certain threshold, the Customs authorities can also arrange criminal proceedings to be brought against the infringing party.

In order to fully benefit from the Customs protection, it is advisable for the SMEs to record their IP (trade marks and copyrights mostly) with the Vietnamese Customs. To seek customs recordal, SMEs must file an application with the Department of Customs Control and Supervision under the General Department of Customs. No later than 20 days from the receipt of the request, the Department of Customs Control and Supervision should notify the SMEs whether the application is accepted or not. The effective period of the recordal is two years from the date of the acceptance notice by the Department. The period may be extended for two more years upon request. After the extension period expires, companies must re-file a new application if they wish to pursue the customs recordal.

Although registering with Vietnamese Customs is not mandatory, it is advisable to be included to their database, as it will help the customs authorities to recognize counterfeit versions of SMEs’ product, and improve the chances of such suspect items being blocked at the border. If SMEs are aware of a suspected illegal shipment of their products, they can also work together with Vietnamese customs to detain such shipments.

It is particularly advisable for the SMEs to be vigilant and to report suspected infringements of their products to the Vietnamese Customs authorities because Infringers are demonstrating increasingly sophisticated counterfeiting methods, and are finding new ways to try to outwit the Customs and other IP enforcement authorities.

Case Study

This case study demonstrates the importance of cooperating with the Vietnamese customs to best protect company’s IP. It is particularly important because the Customs are generally looking out for identical products that are obviously infringing IP rights and could sometimes miss products that could be possibly infringing the original goods.

Background

A power supply company (Company A) has registered its mark ”SANTAK” in Vietnam since 1995 for “Uninterruptible Power Systems – UPS”. Further, ”SANTAK” is a well-known trade mark which has a large portion of the Asian market. Company A had information of a shipment of products bearing the sign ”SANTAKUPS” being imported from China by a Vietnamese company.

Advice

Company A was advised to register its mark ”SANTAK” with Customs and cooperate with the IP Enforcement and Anti-Counterfeiting Department within the General Customs Office and the Haiphong Customs Office to investigate and detect the shipment of products bearing the sign ”SANTAKUPS”.

Outcome

After the discovery of the shipment of 162 products bearing the sign ”SANTAKUPS” imported from China by a Vietnamese company, Company A’s representative requested the competent authorities to suspend the import procedures of the shipment. Haiphong Department of Custom issued a Decision to keep the shipment under custody according to administrative procedures. “SANTAKUPS” was written as one word, but the intent was to make a customer think that this was a combination of the words Santak and UPS. In this context, UPS is an abbreviation of uninterruptible power supply, so UPS did not create a distinction. Because of this, a comparison was only made with the word ”SANTAK” which was identical to the protected trade mark. Upon consideration of these findings, the competent Authority issued a Decision to apply sanctions under regulations of relevant Law: imposition of a high monetary fine and removal of “SANTAKUPS” from all infringing goods.

Lessons Learned

Through the registration of the mark with Customs as well as cooperation between Company A and Customs, Company A timely prevented the risk of infringement of trade mark in Vietnam by not only protecting their own interests in the market but also their reputation for the trade mark “SANTAK”.

South-East Asia IPR SME Helpdesk Team

 

SEA IPR

 

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@southeastasia-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The South-East Asia IPR SME Helpdesk is co-funded by the European Union.

To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.

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