Lessons to learn regarding intellectual property issues

July 09, 2021 | 08:00
According to the ranking of the 100 most valuable brands globally published in 2020 by UK-based brand ranking and consulting company Interbrand, the United States was the country with the most intellectual property assets. Specifically, in the top five most valuable brand names in the world, there are four American brands in the technology sector. Although it was reported last year that Apple is now worth over $2 trillion in market value, its brand value is estimated to be around $322 billion, which is nearly equivalent to Vietnam’s 2019 GDP.
Lessons to learn regarding intellectual property issues
Le Quang Vinh - Attorney, Bross & Partners

Although neither Vietnamese brand name is listed in the 100 global brands list announced by Interbrand, nor in the 500 largest enterprises rankings by the Fortune 500, Vietnam got four brands in the Forbes Global 2000 listings – Vietcombank, BIDV, Vingroup, and VietinBank, with their respective rankings of 937, 1,448, 1,534 and 1,595. Out of the 50 best Vietnamese brands in 2020 published by Brand Finance, the top five most valuable brands are Viettel, VNPT, Vinamilk, Vinhomes, and SABECO, and amongst them Viettel is the most valued brand, worth nearly $6 billion. Basically speaking, we can categorise the properties (assets) into three types – immovable assets such as estates, buildings, and resources; movable assets such as money, gold, cars, aircraft, and ships; and property rights are given to the persons over the creations of their minds, which are also best known as intellectual property rights (IPRs).

These IPRs exist in the form of various exclusive rights, namely exclusive right to exploit given to a holder of protected patent for inventions, patent for industrial designs, plant varieties; exclusive rights to use in commerce trademarks or geographical indications; exclusive rights to make reproductions, distribution, and performance; exclusive rights to make available to the public with respect to copyright or to related rights or neighbouring rights (performances, recordings, phonograms, and broadcastings). IPRs are distinct from the immovable and movable properties. While immovable and immovable properties are physical, tangible, and possessable, IPRs are intangible, abstract, and cannot be possessed in the same way as immovable and movable properties.

Typical cases

There have been several cases involving Vietnamese brands in years squatted. Phu Quoc fish sauce was registered as a trademark in many countries, Buon Ma Thuot coffee was registered as a trademark in China, and in 2018 G7 Instant Coffee was registered in bad faith in Iceland.

In another instance, Duy Loi folding hammocks were unlawfully registered as a utility model in Japan in 2001. After considering the request for cancellation, the Japan Patent Office accepted the evidence that the utility model was deemed to have lost its novelty as it was publicly disclosed in Vietnam prior to its filing date in Japan. If Duy Loi’s cancellation action failed, Duy Loi would not only incur all litigation and lawyers costs but also be prevented from exporting into the Japanese market about 680 sets of hammocks per month. As per some sources, Duy Loi is reportedly asked to pay a royalty fee of $4 per imported product to the registrant.

Lessons learned

As far as the cause of the above loss of IP assets is concerned, the examples all show that IPRs are territorial in nature, meaning that they are only protected in Vietnam but not automatically protected in Japan, China, and Iceland. The next reason is that IPRs to inventions, utility solutions, geographical indications, and trademarks are established in the territories which merely protect the first-filed application for registration.

Another very fundamental reason is that IPRs are easily lost, appropriated by another individual or entity, meaning these subjects took advantage of the two reasons as described above, meaning territorial limitation to IPRs, and the first-to-file principle available in most countries.

With regard to the consequence, loss of IP overseas is a very serious problem as it can affect an entire economic sector or even a country, for example in the case of loss of GIs Buon Ma Thuot for coffee, or Phu Quoc for fish sauce. It can also block opportunities for Vietnamese businesses to reach out to other countries such as the case of Duy Loi and Trung Nguyen’s G7 instant coffee.

Altogether, there are three consequences of the loss of IP in a foreign country. Firstly, loss of IP assets abroad means loss of markets and opportunities to expand markets in order to increase revenue. Secondly, losing IP also means local enterprises must face the risk of lawsuits, litigation, and customs clearance suspension at the importing countries’ border, and pay for damage. Thirdly, the benefits earnable from the recent free trade agreements that Vietnam has signed become meaningless.

Two valuable lessons may be learned. Firstly, it is necessary to actively go over and get early registered IPRs in foreign markets to avoid the risk of being appropriated by competitors. The most important IPRs to protect overseas are trademarks, designs, inventions, and utility solutions. There are currently many multilateral agreements to support IP protection abroad at low cost such as the Madrid Agreement and Protocol on international registration of trademarks in over 120 territories, the Patent Cooperation Treaty, or the Hague System for the international registration of industrial designs.

Secondly, when discovering the loss of IPRs abroad, it is necessary to quickly study and hire a professional lawyer to collect evidence, file an opposition or a cancellation action against unlawfully registered IP rights. These IP rights are established on the basis of internationalised protection standards, for example invention, utility solutions, or design patentable must be of worldwide novelty. For example, the Japanese Utility Model No. JP3081528U was declared invalid because of absence of novelty under the Japanese patent law, or on the basis of anti-unfair competition practice under the Paris Convention for dealing with bad faith filing, Bross & Partners represented the client to successfully revoke a registered trademark G7 Coffee squatted by a Vietnamese person in Iceland.

By Le Quang Vinh Attorney, Bross & Partners

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