Since July 2006 when the new IP Law of Vietnam came into effect, a new approach to the concept of well-known trademark has been established and a new regime for its protection has been adopted in the country. The right over a well-known trademark is automatically established through the use thereof in commerce by consumers without any registration (which used to be required under the old legislation). The new law explicitly provides that a mark shall be excluded from registration if it is identical or confusingly similar to a well-known trademark and the use of the mark prejudices the distinctiveness of the well-known trademark, or if its registration is aimed at taking advantage of the reputation of the well-known trademark. However, in trademark practice in Vietnam, several uncertainties have gotten the pulses of trademark practitioners and brand-owners racing.  Some of these uncertainties are addressed in detail below.

Well-Known but Not Used in Vietnam – Protection or Not

Determining what protection is available for a "well-known" mark will probably require a great deal of litigation in the coming years.  Knowing the meaning of the term “well-known” in the context of Vietnamese trademark law is important to determining whether a foreign well-known mark that has not been used as a trademark in Vietnam will be protected here. Under the terms of the IP Law 50/2005, a well-known mark is a "mark that is widely recognized by consumers throughout the territory of Vietnam". This definition requires more than simple name recognition. The test is whether Vietnamese consumers would associate the trademark with the goods and services for which the trademark is used outside Vietnam. Vietnam IP Law lists a number of factors to define whether a mark is well-known but none of them expressly requires that the well-known mark be used in Vietnam. But is it actually possible for a foreign well-known mark that is not used in Vietnam as a trademark, to reach the required level of wide recognition by consumers?

At first glance, the answer appears to be a simple NO. However, after considering the internet boom, the growth of e-commerce and online shopping, the ease of global communications, and the convenience of international travel, a different answer emerges.  In this context, foreign marks can and do easily become well-known to Vietnamese consumers even without actual use in the country. It is worth noting that under the terms of Art. 6bis of the Paris Convention, marks that are well-known in a member country may be protected there even without use within its borders. Thus, under Vietnam’s obligations to the Paris Convention, Vietnam should protect a mark that has been well-known in a member state of the Paris Convention, without requiring use in Vietnam. Rights given to the well-known trademark owners by the Paris Convention at least pre-empt Vietnam IP Law because Vietnam IP Law expressly declares that where the provisions of the international treaties to which Vietnam is a party contravene the provisions of Vietnam IP Law, the former shall prevail.

Likelihood of Confusion – In or Out

Under the current IP law, certain well-known trademarks will not receive protection in Vietnam where no likelihood of confusion is found, such as when the well-known mark and the copying mark are registered in different classes of goods/services.  Yet in practice this provision too is affected by Vietnam’s international obligations and commitments. TRIPS Article 16(3) declares that the protection of well-known marks extends to goods or services that are different from those for which the trademarks are registered, as long as the use of the mark on those goods or services would indicate a connection with the owner of the registered trademark, and as long as the owner of the registered trademark would be damaged by use of the mark on those goods or services.

To illustrate, consider a well-known trademark registered in class 9. An owner who copies that mark cannot safely use it if it is confusingly similar to the well-known mark, even for goods in class 3, because TRIPS presumes that Vietnamese consumers are likely to believe that the goods of the copier are connected with the owner of the well-known trademark. Consumers who ordinarily would not have purchased the copying mark owner’s products will do so because they believe the copier’s products are associated with the products bearing the well-known mark that they have read about in magazines or travel guidebooks, or seen in advertisements, on their favorite websites, or television programs. Vietnamese consumers might well enjoy the copier’s product because they thought they were dealing with a branch of the well-known mark’s owner.

A fundamental aim of Vietnam trademark protection is to avoid consumer confusion over the source of goods and services. But does this principle require Vietnam to treat well-known marks differently from other marks in the likelihood of confusion analyses? In some jurisdiction where well-known marks are protected against the lessening of the capacity of the mark to identify and distinguish goods or services, there is no need to prove a likelihood of confusion, nor is there any need to show competition between the goods of the plaintiff and the defendant. Therefore, it is possible to protect the well-known marks against the confusingly similar marks used on goods and services that bear no relation to the goods or services of the well-known mark. Should well-known marks in Vietnam receive the same special treatment?

Exceptions to Well-Known Marks Protection

The question raised here is whether Vietnam should add some exceptions for well-known marks to the existing well-known trademark regulations. One major reason why well-known marks should be protected under special regime is to avoid unjust enrichment of free riders. A well-known mark is particularly sensitive to copying since it gives free riders immediate recognition with minimum costs for launching and marketing. A free rider may choose to use a certain well-known trademark because of its fame in Vietnam, thereby taking advantage of consumer good will toward the well-known mark’s owner. While punishing free riders for their bad faith seems fair, the more important issue is providing justice to trademark owners. Creating exceptions for well-known marks is essential to address this concern.

Another reason to give greater weight to the fame of a well-known mark is to prevent the lessening of the capacity of well-known marks to identify and distinguish goods or services. A lessening of a mark’s capacity results when an association impairs a mark's distinctiveness. In the mind of Vietnamese consumers, certain well-known marks might have been associated with the mark’s owner’s products and services, thereby helping consumers to distinguish those products and services from similar products and services. Thus, the association of such a well-known mark with products from a copier weakens the distinctiveness thereof. The lessening of the capacity of the well-known mark also may occur when an association harms the well-known mark's reputation. Vietnamese consumers are very likely to be confused into believing that a product of a copier is either owned by, or licensed from, the legal owner of the well-known mark. When the services of a copier are less than satisfactory, consumers may wrongly attribute their complaints to the legal owner of the well-known mark and the well-known mark owner’s reputation may badly be harmed. Even if a copier’s services are satisfactory, the copier’s use of such a well-known mark is still harmful because the well-known mark owner has been deprived of the ability to control its own reputation.

In some jurisdictions where well-known marks are protected against the dilution of the mark, there is no need to prove a likelihood of confusion, nor is there any need to show competition between the goods of the plaintiff and the defendant. Therefore, it is possible to use a dilution defense against users of the confusingly similar mark even on goods and services that bear no relation to the goods or services of the famous mark. If the dilution exception were adopted in Vietnam, any defendant’s use of a plaintiff’s well-known trademark for a commercial purpose could be stopped, even if defendant's goods do not compete with those of the plaintiff. Vietnam should address these issues and work towards eliminating such uncertainties regarding the protection of well-known trademarks.

Foreign well-known mark owners can avoid having to rely on the uncertain well-known marks exception by using their marks in Vietnam. However, this is not an ideal solution since the scope of protection may be not as broad as they expect. Nonetheless, it is the best course to pursue in the short run until Vietnam revises its provisions for protection of well-known trademarks.