In Vietnam, provisions on unfair competition are found in both the Competition Law and the Law on Intellectual Property (the "IP Law"), though only the Competition Law provides a definition, which refers to acts that run contrary to good conscience in business practice. The Competition Law mentions some typical acts of unfair competition in general while the IP Law provides an exhaustive list of acts of unfair competition in the intellectual property field. When acts of unfair competition occur in the field of intellectual property, both the Competition Law and the IP Law shall be applied for enforcement. This section shall provide a brief overview of unfair competition in Vietnam with a focus on the intellectual property field.
Organizations and individuals that suffer from damages or are likely to suffer from damages caused by acts of unfair competition shall have the right to request State competent agencies to impose civil remedies provided in the IP Law and administrative remedies provided in the laws on competition.
The civil remedies imposed by the Court as provided in the IP Law include:
- Ordering termination of the infringement of intellectual property rights;
- Ordering public rectification and apology;
- Ordering the performance of civil obligations;
- Ordering compensation for damages;
- Ordering destruction, distribution or use for non-commercial purpose in respect of goods, materials and implements, the predominant use of which has been in the creation or trading of intellectual property right infringing goods, provided that such distribution and use does not affect the exploitation of rights by the intellectual property rights holder.
Administrative remedies as provided in the laws on competition include:
- Issuing a warning;
- Setting a monetary fine;
- Withdrawal of business registration certificate; revocation of the right to use a licence or practising certificate;
- Confiscation of exhibits and facilities used to commit the breach of the laws on competition.
- Restructure of an enterprise which abuses its dominant market position;
- Division or separation of enterprises which merged or consolidated; compulsory re-sale of that part of an enterprise which was acquired;
- Ordering public rectification;
- Removal of illegal terms and conditions from a contract or business transaction;
- Where a practice in breach causes loss to the interests of the State or to the lawful rights and interests of other individuals or organizations, compensation must be paid for such loss in accordance with law.
Right to claim
The business entity that has made prior use of trade indications in a public and stable manner in its lawful business activities in Vietnam and has its reputation and goods or services bearing such trade indications known to consumers, has the rights to request handling of theact of using misleading trade indications.
The owner of a mark, geographical indication or trade name who has used these subject matters in a public and stable manner in its lawful business activities and has its prestige and reputation and goods or services bearing such mark, geographical indication or trade name known to Vietnamese consumers in the relevant field, has the rights to request handling of the infringing acts of registering, appropriating the right of using domain names or using domain names.
In Vietnam, the competent authorities handling cases of unfair competition are the Vietnam Competition Authority under the Ministry of Industry and Trade as stipulated in Article 49.2 of the Competition Law and other competent authorities having the power to administratively sanction against acts of unfair competition in the field of intellectual property, particularly the following:
- Inspectorate of Science and Technology,
- Inspectorate of Information and Communication,
- Market Management Bureau,
- Economic Police,
- People's Committee at provincial and district levels.
The Courts also have the competence to handle and impose civil remedies or criminal liabilities on acts of unfair competition.
Means of enforcement
There are various measures which can be applied against acts of infringement of intellectual property rights, including acts of unfair competition. Which of the following measures shall be applied depends on the nature and level of the infringement:
- Cease and desist letter: Intellectual property (IP) rights holders are entitled to send a cease and desist letter to infringers. To ensure the deterrent value of this letter, IP rights holders can follow up with and push them to stop their infringement.
- Administrative action: Administrative measures shall be applied to handle acts of infringement:
- at the request of IP rights holders or organisations/individuals that suffer from damages caused by the acts of infringement,
- at the request of organisations or individuals that identify the infringing acts
- at the proactive identification by the competent authorities.
- Civil action: Civil measure shall be applied to handle acts of infringement at the request of IP rights holders or organisations/individuals that suffer from damages due to the infringing acts, even when such acts of infringement have been handled or are being handled through administrative or criminal measures.
- Criminal action: Acts of infringement amounting to criminal offences as stipulated in the Criminal Code shall be subject to criminal liabilities. The Court will base on the nature and level of seriousness of the offences to identify the count and apply appropriate criminal penalties.
Apart from the above measures, in case of necessity, competent authorities may apply; provisional measures; border control of imported and exported goods in relation to intellectual property; prevention and guarantee of administrative sanction measures.
- The following provisional measures shall be applicable to goods suspected of infringing upon intellectual property rights or to the materials, raw materials or implements for producing or trading such goods:
- Sealing, prohibition of changing status or displacing;
- Prohibition of transferring ownership;
- Other provisional measures shall be applied in accordance with the Civil Procedure Code.
- Prevention and guarantee of administrative sanction measures applicable under administrative procedures to the infringement of intellectual property rights comprise the following:
- Temporary holding of related individuals;
- Temporary detention of the goods, means and implements used for such infringement;
- Search of related individuals;
- Search of the place where infringing goods, means and implements are stored;
- Other administrative preventative measures in accordance with the laws and regulations.
- Border control measures of IP-related imports and exports comprise the following:
- Suspension of customs procedures for suspected intellectual property right infringing goods.
- Controls to detect goods containing signs of infringement of intellectual property rights.
The suspension of customs procedures for suspected intellectual property right infringing goods is requested by the right holder for the purpose of collecting information and evidence about the goods forming the basis for the request for the handling of the infringement, the application of provisional measures or preventive measures, and to ensure that an administrative penalty is to be imposed.
Vietnam´s Competition Law defines unfair competitive practices as competitive business practices by an enterprise which are contrary to general standards of business ethics and which cause or may cause damage to the interests of the State and/or to the legitimate rights and interests of other enterprises or of consumers.
Article 39 of the Law provides a list of unfair competition practices, which includes the following:
- Misleading instructions;
- Infringement of business secrets;
- Coercion in business;
- Defamation of another enterprise;
- Causing disruption to the business activities of another enterprise;
- Advertisement aimed at unfair competition;
- Promotion aimed at unfair competition;
- Discrimination by an association;
- Illegal multi-level selling of goods;
- Other unfair competitive practices stipulated by the Government.
Article 130 of the IP Law also provides a list of acts of unfair competition in intellectual property field, which includes the following:
- Using commercial indications that cause confusion as to business entities or business activities or commercial source of goods or services;
- Using commercial indications that cause confusion as to the origin, production method, feature, quality, quantity or other characteristics of goods or services; or as to the conditions for provision of goods and services;
- Using a mark that is protected in a country which is party to an international treaty to which the Socialist Republic of Vietnam is a party, under which provisions the representative or agent of the mark owner is prohibited from using the mark, if the user was a representative or agent of the mark owner and such use was neither consented to by the mark owner nor justified;
- Registering or possessing the right to use or using a domain name identical with or confusingly similar to a protected trade name or mark of another person, or a geographical indication that one does not have the right to use, for the purpose of possessing the domain name, benefiting from or prejudicing reputation and goodwill of the respective mark, trade name and geographical indication.
The commercial indications referred to above mean signs, information serving as guidelines to trade of goods and services, including marks, trade names, business symbols, business slogans, geographical indications, package designs, label designs, etc.
Use of commercial indications referred to above shall include any act of affixing such commercial indications on goods, packaging, service means, business transaction documents and advertising means; selling, advertising for sale, storing for sale and importing goods affixed with such commercial indications.
According to the Criminal Code of 1999, amended and supplemented in 2009, there are types of offence relating to acts of unfair competition, which are subject to criminal liabilities such as: Deceiving customers; Making false advertisements; Infringing upon industrial property rights.
- Deceiving customers: The offender shall be subject to warning, a fine of between five million Dong and fifty million Dong, non-custodial reform for up to three years or a prison term of between three months and three years. For committing the crimes more than once or gaining substantial illicit profits, the offender shall be sentenced to between two and seven years of imprisonment. The offender may also be subject to a fine of between three million Dong and thirty million Dong.
- Making false advertisement: The offender shall be subject to a fine of between ten million Dong and one hundred million Dong, non-custodial reform for up to three years or to a prison term of between six months and three years. The offender may also be subject to a fine of between five million Dong and fifty million Dong, to a ban from practicing certain occupations or doing certain jobs for one to five years.
- Infringing upon industrial property rights: The offender shall be subject to a fine of between twenty million Dong and two hundred million Dong or to non-custodial reform for up to two years. Committing the crimes in one of the following circumstances, the offender shall be sentenced to between six months and three years of imprisonment:
- In an organized manner;
- Committing the crime more than once;
- Causing very serious or particularly serious consequences.
The offender may also be subject to a fine of between ten million Dong and one hundred million Dong, to a ban from holding certain posts, practicing certain occupations or doing certain jobs for one to five years.
In Vietnamese legislation, there is no specific definition of 'misleading advertising'. The Competition Law, however, specifies the term 'advertisement aimed at unfair competition' as an act of unfair competition.
The Competition Law further provides that the following advertising actiivites shall be considered as advertisement aimed at unfair competition and therefore, prohibited:
- Comparing directly their own goods and services with those of the same type of another enterprise;
- Imitating another advertising product in order to mislead customers;
- Providing false or misleading information to customers about one of the following matters:
- Price, quantity, quality, usage, design, type, packaging, date of manufacture, use expiry, origin of goods, manufacturer, place of manufacture, processor or place of processing;
- Manner of use, method of service, warranty period;
- Other false or misleading information;
Remedies applied to handle acts of unfair competition in advertising are same as those mentioned above under Means of Enforcement.