Update on New Circular on Administrative Sanctions in Industrial Property

Introduction

On 15 November 2024, the new Circular 06/2024/TT-BKHCN (“Circular 06“) came into effect, introducing revisions and/or additions to certain articles of Circular 11/2015/TT-BKHCN concerning the enforcement of intellectual property (“IP“) rights through administrative sanctions against IP infringement in Vietnam.

The amendment covers the following key areas:

1. Clearer guidelines for implementing supplementary sanctions and remedies;
2. Preventive measures and handling of unfair competition in domain name disputes;
3. Exemption for indications of IP protection;
4. Transfer of trademark usage rights;
5. Regulations on IP infringements in the digital space; and
6. Verification, investigation, and responsibilities for handling infringements.

Key Areas

The details of the above are as follows:

1. Clearer guidelines for implementing supplementary sanctions

Circular 06 clarifies the implementation of supplemental sanctions, specifying that the sanction of business suspension for one to three months has been amended to a full or partial suspension of production, trading, or service activities that are directly related to the infringing acts, for one to three months. This sanction now applies to violations committed by industrial property representative service organisations, rather than those committed by individuals. However, the term “partial suspension” seems too broad and vague as it does not specify the extent of the partial suspension.

2. Preventive measures and handling of unfair competition acts in domain name disputes

Circular 06 supplements the required documents and documentary evidence for requesting for the preventive measure of temporarily detaining domain names in case of unfair competition acts involving the possession and use of illegal domain names. It also specifies that the administrative sanction against IP infringement can only be imposed when the receipt document is deemed valid. In order to constitute unfair competition involving the possession and use of Vietnamese domain names, the domain names must be proven to be “identical or confusingly similar” to another person’s registered trademark, trade name, or geographical indication. The primary aim of Circular 06 is to prevent cybersquatting and engaging in activities related to domain name infringement. It also seeks to address challenges faced by authorities when delays occur in identifying the parties involved in domain name disputes, thereby maintaining control over the resolution process.

3. Exemption for indications of IP protection

Circular 06 states that providing misinformation of IP protection in Vietnam include:

• Affixing labels on goods or packaging with statements which purport to indicate that a mark, invention or industrial design are protected, use of ® symbol, or “P” or “Patent” symbols without accurately identifying the actual registration status of the goods; and
• Affixing indications on products related to patents or industrial designs that provide untruthful information.

Circular 06 provides an instance where an indication may be exempted from being considered a false indication, i.e. a sub-label on imported goods that truthfully states the registration status of the mark in Vietnam.

4. Transfer of trademark usage rights

A written trademark licence contract is considered invalid in the following cases:

• Receiving the transfer of trademark usage rights without a valid written trademark licence contract, as required by Vietnamese regulations.
• Providing false information about products manufactured under a license agreement for industrial property rights, either without the legal right to use those rights or based on inaccurate agreement details.

Circular 06 clarifies that a letter of consent, a letter of authorisation, or similar document from the trademark owner granting permission to use the licensed trademark does not qualify as a formal trademark licence agreement and is insufficient to prevent sanctions.

5. Regulations on IP infringements in digital space

Circular 06 provides that infringing acts in online space include several important points as follows:

• Internet-based infringement: Infringing acts that meet the criteria set forth in Decree 65/2023/ND-CP, including infringing acts taking place in online space in Vietnam in websites indicating Vietnamese domain names or with contents displayed in Vietnamese, or targeting consumers or users in Vietnam.
• Domain name registrants: Individuals or organisations registering domain names that allow others to use such domain names, while being aware of, or having reasonable grounds to believe that such use infringes regulations, will be deemed in violation of and subject to sanctions under Decree 99/2013/ND-CP (“Decree 99“). Decree 99 provides that domain name infringement refers only to unauthorised use or possession of domain names identical or confusingly similar to another’s registered trademark, tradename, or geographical indication, or taking advantage of the owner’s prestige and reputation for profit, Domain name infringement is punishable by fines ranging from VND5 to 20 million. It also includes additional penalties, such as forced return or withdrawal of domain names. Decree 46/2024/ND-CP, which amends Decree 99, introduces preventive measures, including temporary seizure of domain names, to enforce administrative violations.

6. Verification, investigation, and responsibility for handling infringements

Circular 06 highlights that if the explanatory documents submitted by relevant parties relating to administrative sanctions are unclear, the competent authority may hold direct meetings with the involved parties, with the meeting minutes serving as the basis for the resolution of issues involved. In this regard:

• The competent authority can independently inspect, verify, and gather evidence to identify infringements, and may seek assistance from other agencies.
• Decisions regarding violations may be based on commitment letters, expert opinions, and assessments, but the responsible authority remains legally accountable for its conclusions and actions.

Conclusion

Circular 06 introduces a stricter legal framework for IP rights protection and the enforcement of administrative sanctions. The amendments introduced in Circular 06 not only strengthen the responsibilities of all stakeholders but also promote more transparent and efficient dispute resolution.

The full Vietnamese text of amended Circular can be accessed here.