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Dealing with enterprise names that violate IP rights

Update: February, 08/2012 - 09:59

From IPMAX Law Firm www.ipmax.vn

Circular No 37/2011/TT-BKHCN takes effect on February 11. Issued by the Ministry of Science and Technology on December 27, the new circular provides detailed guidance for implementation of Decree No 97/2010/ND-CP on sanctions for administrative violations of industrial property rights.

Among other significant changes, the circular introduces a detailed procedure for handling infringements of intellectual property rights involving enterprise names.

Decree No 97 provides for measures to revoke enterprise names containing elements infringing protected trademarks, trade names, geographical indicators or other enterprise names that constitute an act of unfair competition.

In addition to Decree No 97, Government Decree No 43/2010/CD-CP of April 2010 also prohibits use of enterprise names infringing on protected trademarks, trade names or geographical indicators; it gives an intellectual property rights owner the power to request the Business Registration Authority to issue a cease-and-desist order to the infringing enterprise regarding use of the name.

In light of the provisions set forth in Decrees 43 and 97, a number of enforcement actions have been carried out against infringing enterprises. For example, in 2011, Vincon Land and Finance Investment Joint Stock Co (Vincon) had to change its name because the name "Vincon" was found to have infringed upon the name "Vincom" which had been protected for similar services.

The new circular contains specific provisions for co-ordination between business registration and IP rights enforcement authorities in handling infringements relating to enterprise names. Under the procedure introduced in the circular, the IP enforcement authority, upon receipt of a complaint from the IP rights owner, and based on the results of its own inspection, may issue either (1) a conclusion that use of the enterprise name constitutes an infringement of IP rights, or (2) a decision of administrative sanctions against the infringer, including a measure of compelling a change of the enterprise's name.

In the first case, the infringer will be given 15 days to negotiate an acceptible solution with the IP rights owner. If the parties cannot reach an agreement within that time limit, the IP rights owner may send a copy of the conclusion to the business registration authority and request them to issue a cease-and-desist order. If the infringer does not comply, the IP enforcement authority will be requested to issue a Decision of Administrative Sanction against the infringer. The Decision of Administrative Sanction may include measures for compelling a change of the enterprise's name.

Upon issuance of the Decision of Administrative Sanction, the IP Enforcement Authority will notify the Business Registration Authority for ordering the infringer to change the enterprise name. However, if the infringer does not comply, the Business Registration Authority will publish the information about the administrative sanction on the National Business Registration Portal.

Although the new circular introduces detailed procedures for handling infringements relating to enterprise names, its provisions are intricate and complicated. It also fails to explicitly give the business registration authority the power to ultimately revoke the business registration of an infringing enterprise that does not comply with cease-and-desist orders. Infringers may still be able to use the infringing name even after a sanction decision has been issued compelling it to change the infringing enterprise name. The circular should be clarified further to allow more effective and expeditious measures against infringingements involving enterprise names.

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