Legal Risks in International Trade for Vietnamese Enterprises Discussed

 

In 1998, Saigon Beer Company submitted an application for the “Saigon Export” trademark in Canada but was turned down because a Canadian company had registered this trademark since 1996. Saigon Beer Company had to quit its intention of following a legal case related to trademark dispute because the fee to follow such a case was very high and the Canadian market was not a major of the company. The abandonment in the intellectual property registration in export markets after encountering difficulties is quite common among Vietnamese enterprises.

 

With Vietnam’s official admission to the WTO, Vietnamese companies will have many opportunities as well as numerous challenges. They have to compete with imported products on the home market and seek the measures to penetrate more deeply into exported markets. All these activities must match the legal system of individual countries and international conventions.

According to Lawyer Pham Thanh Binh of the Pham & Associates Law Office, the intellectual property in general and industrial property in particular is vital to enterprises in the modern trade system. A product goes to the consumer through a bridge, that is, the brand name. However, whether the product is chosen by the consumer depends on the taste of the consumer, its convenience and its price. Mr. Binh said whether the product can be exported and accepted by foreign consumers depends on not only its competitiveness but also its “clean” intellectual property, which means that the product does not infringe any copyrights in imported countries. And, Vietnamese companies have encountered intellectual property disputes. The case of Vifon Vietnam in exporting its products to the United States was a clear example.

 

Vietnam Food Industries Joint Stock Company (VIFON) is the owner of the brand of “Vifon and urn”, which was registered for the intellectual property protection in Vietnam since 1990. Until 1995, Vifon applied for the brand registration in Poland but rejected as the “urn” pictorial part could lead to confusion with the “urn” pictorial part of the Kim Lan brand earlier registered for the same type of products in Poland. In fact, Kim Lan Company, the owner of the brand of “Kim Lan and picture” had business ties with Vifon before it applied for the trademark in Poland. By the end of 1998 after Polish brand authorities found sufficient evidences about the relationship between Vifon and Kim Lan, they agreed to annul the “urn” picture in the brand of “Kim Lan and picture.”

 

After proving the “cleanness” in intellectual property, the next step is to intensify its position on that market by registering its products for the intellectual property protection in that country. The skip in the registration of intellectual property protection in exporting countries was widely known as the case of Vinataba, Trung Nguyen Coffee and Saigon Beer.

 

The conflict can also occur even when you are the owner of the authorised brand. Duy Loi’s hammock case was obvious evidence. As the author of the industrial design of the “hammock framework,” Duy Loi was still warned of possible violation of copyrights of other authors.

 

In fact, the utility solution of the “hammock framework” by Japanese author was submitted for protection on April 3, 2001, much later than the application of Duy Loi’s industrial design of “hammock framework” on March 23, 2000. The ownership of the hammock framework design was authorised to Du Loi in June 2000. Duy Loi’s lawyers had cooperated with counterparts in Japan to work with Japanese patent authorities. And in May 2003, Japanese patent authorities announced to annul the validity of the patent certificate granted to the Japanese author.

A representative from Vietnam Tobacco Corp. (Vinataba) shared his experience from his lessons by his warnings against the sound awareness of brand copyrights in both domestic markets and targeted exporting markets. He also advised property concerns and product brand building and development strategy in potential markets. In addition, enterprises should carefully study the intellectual property law of the countries they wanted to make the registration for their brands. And, best of all, they should find suitable and reliable intellectual property representative to make registration for their product brands in foreign countries and help resettle possible disputes and petitions. He also alerted that if Vietnamese enterprises registered product brand protection in the countries sharing borders with Vietnam, they can help them advertise their trademarks to neighbouring countries, export their products when possible and prevent the penetration of smuggled goods.

 

To this end, Lawyer Pham Thanh Binh warned enterprises should meticulously study their brands before submitting the authorised use of the brands in order to avoid the possibilities of confliction with other firms, including those protected by the Intellectual Property Law, those protected under the Competition Law and those protected by Copyright Law. Therefore, the study should not limited in intellectual property registration directories of targeted countries, protected official trading names, authorised domain names and related objectives, but carrying out market surveys. By that way, the enterprises not only can know more clearly about the market trends but also detect the possibility of conflicts in brand use. However, it is impossible to make surveys for all brands because the costs are too large. Therefore, the study should be based on their brand development strategies.

 

As a financial organisation, Vietcombank specially warned Vietnamese enterprises of examining and verifying the legal status and financial capacity of foreign partners before signing any business contracts with them. Depending specific conditions and the business relations, Vietnamese enterprises can choose one of suitable methods, such as checking information on international communication systems (online newspapers, internet, etc), Vietnamese representative organisations in the country their partners register businesses, Vietnamese economic organisations in the country their partners register businesses or international consulting organisations in Vietnam.

 

Vietcombank also proposed the Vietnam Chamber of Commerce and Industry (VCCI) or business associations to organise regular meetings to review payment activities for goods and services with foreign partners to draw experience. Hence, Vietnamese enterprises can draw useful lessons to limit or prevent risks and damages several Vietnamese companies previously suffered. At the same time, they should continue promoting the advantages of successful international payments in trading of goods and services with foreign merchants.