Parallel import in pharmaceuticals in Vietnam

The parallel importation of pharmaceuticals has become a critical issue in Vietnam. As a developing country with a large population, Vietnam has long viewed parallel imports as an effective antidote to the high price of innovator drugs. Still, debates linger over whether the benefits outweigh the complications.

Legal Basis for Parallel Importation

Exhaustion of rights refers to a limitation of IP rights. The IP rights associated with a product, particularly the rights of commercial exploitation, will end with the first sale of the product. Basically, there are three markets on which goods are placed: the domestic market, the regional market and the international market. The three types of market give rise to the establishment of different doctrines of rights exhaustion, which can include national exhaustion, regional exhaustion and international exhaustion.

Vietnam expressly adopts the regime of international exhaustion with regard to industrial property rights (patent, trademark, industrial design, etc.). Under Article 125.2(b) of the IP Law, IP owners may not prevent others from “circulating, importing or utilizing products which have been legally put on the market, including foreign markets, unless such products were put on the market by someone other than the trademark owner or its licensees”. Under this regulation, IP owners no longer control the commercial exploitation of goods that legally make their market debut in any part of the world. Consequently, the owners cannot oppose the subsequent commercial exploitation of the goods, which can include the importation of the goods into Vietnam. In other words, parallel importation is allowed.

Vietnam still leaves the concept of copyright exhaustion ambiguous. It is not clear whether it is legal for someone other than the copyright holder to import or distribute originals or copies of copyrighted works which have legally entered the market, including foreign markets. However, IP practitioners have reached the consensus that since there is no statutory limitation on the subsequent distribution of the copyrighted works, the international exhaustion of copyrights must be applied. In connection with this, copyrights subsisting in pharmaceuticals, such as copyrights to the original packaging of the products, will end upon the first sale of the drugs on any market anywhere in the world.

Specific Regulations on Parallel Importation of Drugs

As a developing country, Vietnam places great weight on the affordability of medicine. Given the increasing demands for innovator drugs, in 2004, the Ministry of Health introduced Decision No. 1906/2004/QD-BYT, specifically authorizing the parallel importation of medicines for the prevention and treatment of human diseases. This decision covers medicines with the same specific names as medicines already granted registration numbers for circulation in Vietnam, when the foreign producers set the prices of such medicines lower in another country than in Vietnam.

This decision was in line with the regime of international exhaustion of rights that Vietnam applies. Vietnam expected that it would help eliminate the price discrimination in segmented markets set out by the IP owners by allowing Vietnamese importers outside of the IP owners’ distribution channels to purchase drugs from the cheapest overseas sources. Accordingly, Vietnamese patients would gain access to innovator drugs at low prices. Still, these regulations have triggered debates over whether the benefits provided by parallel-imported drugs could be outnumbered by the problems caused.

Predicaments and Challenges Posed by Parallel Imports

Parallel imports of pharmaceuticals can put the public health at risk, as the quality of the drugs is not guaranteed. In theory, the Drug Administration of Vietnam (DAV), when weighing the decision to grant a parallel import license, will focus on the price and the name of the drugs, but not the quality. In practice, producers could manufacture different medicines under the same trademark for different markets, contingent on the different tastes and demands of those markets. In addition, the standards associated with the drugs, such as storage requirements, could vary from market to market. Thus, allowing parallel importation purely based on the name of the drugs could negatively impact consumers’ health.

In a recent case, the competent authority detected some drugs parallel-imported into Vietnam which had been manufactured for the Turkish market. While the drugs were “genuine” products of the manufacturer, Turkey requires different standards for storage than Vietnam, and the quality of the drugs could deteriorate more rapidly in Vietnam’s tropical climate. With a view to protecting the public health, the authorities decided to sanction the distribution of the parallel imports by relying on regulatory aspects, especially labelling regulations.

Economic concerns also arise relating to grey-market drugs. Under Decision No. 1906/2004/QD-BYT, the crucial condition for approval of parallel importation is the low cost of the drugs. The wholesale and retail prices of the drugs, as determined by the parallel importers, must be lower than the prices of the drugs distributed under the control of the producer. However, the DAV has not specified how these prices should be set. Parallel importers could take advantage of the lack of regulations by setting prices that are just slightly lower than the white-market prices, regardless of the actual price savings found in the source country. Consequently, the parallel importers would be generating large profits for themselves while the Vietnamese buying public would see only minimal savings.

Some IP owners argue that parallel importation could diminish their profits, thereby reducing research and development efforts, and leading to a slowdown in the innovation of new drugs. Additionally, given the reduced profits, the producers might consider not distributing their newest innovator drugs to Vietnam. Consequently, the access to new drugs by Vietnamese people could be impaired.

The affordability of drugs that comes with parallel importation is an undeniable benefit. However, the health authorities should also take into account the risks, especially the threat to public health, posed by grey-market drugs when granting licenses for parallel importation. In the future, it is expected that Vietnam will lay down further regulations on parallel importation to the effect that the quality of the imported drugs as well as the post-sale responsibility are guaranteed.

Authors: Linh Duy Mai and Loc Xuan Le

Well-Known Trademarks in Vietnam: Theory and Practice

The protection of well-known trademarks was first established by Article 6bis of the Paris Convention. However, the Paris Convention and other subsequent international treaties do not clearly define the concept of being “well known.” As a result, the definition of “well known” varies to some extent among signatory states.

In Vietnam, Article 4.20 of the Law on Intellectual Property (IP Law) defines well-known trademarks as marks that are “widely known by consumers throughout the territory of Vietnam.” The criteria to establish the well-known status are provided in Article 75 of the IP Law, and include, inter alia, the level of awareness of the mark among the public, the promotion of the mark in Vietnam, the duration and geographical extent of the use of the mark, and the number of countries granting protection to the mark. It is worth noting that Article 4.20 has a higher standard of being “well known” than Article 75.

The rights to a well-known mark are derived from use, not registration. This use, however, does not need to occur in Vietnam. For example, the National Office of Intellectual Property (NOIP) has recognized the well-known status of the mark McDONALD’S even though the mark was neither registered nor used in Vietnam at the time of the recognition (in fact, McDonald’s has yet to open its first restaurant in Vietnam).

Effect of Well-Known Trademarks

Well-known marks are granted extended protection: it is considered an infringement to exploit a well-known trademark not only for goods or services identical or confusingly similar to those covered by the well-known trademark, but for all goods or services. Moreover, a well-known mark can be cited to refuse or cancel trademarks even if the goods or services for which the trademark is registered are not identical or similar to the goods or services covered by the well-known mark.

Recognition of Well-Known Status in Practice

In practice, the recognition of the well-known status of a mark often arises during the examination of the trademark application or the enforcement of trademark rights. There is no formal procedure in Vietnam for recognizing the fame of a mark. The NOIP can ex officio recognize the well-known status of a mark during examination, opposition, or cancellation proceedings, and may refuse to register marks that are in conflict with a well-known mark. For example, the NOIP declined to register the mark EUROGO based on the well-known status of the mark URGO and found that Nike’s Swoosh device constituted an obstacle to the registration of another curved device mark in Vietnam. In both cases, the NOIP recognized the well-known status of URGO and the Nike device ex officio.

In the process of enforcement, a trademark owner can also request the enforcement bodies to acknowledge the reputation of a mark, which can be a prerequisite to the resolution of IP disputes in certain cases. But enforcement bodies, such as courts and administrative enforcement agencies, rarely decide on the well-known status of a mark ex officio. Usually, the enforcement agencies seek the opinion of other agencies, such as the NOIP.

In Interbrand Group v. Interbrand JSC, the British Interbrand Group brought a trademark infringement charge against the Vietnamese Interbrand JSC, claiming that the Vietnamese company infringed Interbrand Group’s exclusive right to exploit the trademark INTERBRAND. Interbrand Group, however, had not registered its trademark in Vietnam, and the Vietnamese company provided services substantially different from those provided by Interbrand Group.

Interbrand Group therefore needed to have its mark recognized as a well-known mark to properly resolve the case. In establishing the grounds for trademark infringement, Interbrand Group requested the court to recognize the well-known status of its mark in Vietnam prior to the incorporation date of the defendant. The court did not rule on the issue on its own but sought the NOIP’s opinion. Based on the NOIP’s recognition of the fame of the mark, the court ruled in favor of Interbrand Group.

Major Issues to  Address

In view of the regulations on well-known marks, as well as the practice of competent authorities, two major issues relevant to well-known marks still need to be properly addressed.

The first issue is the inconsistent definition of “well-known” status in the IP Law. According to Article 75, the well-known status of a mark depends primarily on its well-known status among the relevant sector of the public. Under Article 4.20, however, a mark must be widely known to allconsumers throughout the territory of Vietnam in order to be considered “well known.” Consequently, to some extent, Vietnamese law requires a mark to be famous, and not just well known, in order to become entitled to special statutory treatment as a well-known mark.

This inconsistency in the legal definition results in some arbitrary recognitions of well-known marks by the competent authorities. Moreover, the inconsistency poses difficulties to owners of well-known marks used to distinguish goods or services in more specific sectors (such as specialized medical equipment), where the trademarks are not likely to ever become well known to the average Vietnamese consumer.

The second issue to be addressed is the lack of determination in recognizing a mark as well known. In most enforcement cases, the enforcement bodies, despite their power, do not decide on the fame of a mark on their own. They often rely on the NOIP’s assessment on the recognition and are unlikely to rule against the NOIP’s opinion. In some cases, this may prevent brand owners from enforcing their legitimate rights.

It is hoped that, when the IP Law is amended next year, these issues will be addressed. The amended IP Law should clarify the concept of well-known marks to create favorable conditions for owners of a well-known brand within a relevant sector to enforce their rights. Based on the detailed regulations, brand owners can work out the appropriate strategy to establish the well-known status of their marks in order to get the upper hand on their competitors.

Decree 99 Provides New Guidelines on Administrative Sanctions for IP Infringement

The Vietnamese government recently enacted a new regulation on administrative sanctions in cases of industrial property infringement. Decree No. 99/2013/ND-CP, dated August 28, 2013 (Decree 99), came into effect on October 15 of this year, replacing Decree 97/2010/ND-CP (Decree 97).

The passage of the decree comes as the result of the enactment of the 2012 Law on Handling Administrative Violations, which aims to guide the implementation of the law in the field of industrial property rights (IPRs). Given the popularity of administrative measures in Vietnam, Decree 99 will play an important role in the enforcement of IPRs in Vietnam. Decree 99 introduces several major changes as compared to Decree 97.

Level of Fines

In accordance with the 2012 Law on Handling Administrative Violations, Decree 99 classifies the fine level on infringers into two categories. For each act of infringement, a company is subject to a fine twice as high as the one imposed on an individual infringer. For example, an individual infringer trading in counterfeits valued up to VND 5 million (USD 240) is subject to a fine from VND 4 million (USD 190) to VND 8 million (USD 380), while a company that commits the same infringement could be sanctioned with a fine from VND 8 million to VND 16 million (USD 760).

Decree 99 establishes a ceiling on the amount of fines that can be levied on infringers. Individual infringers are subject to a maximum fine of VND 250 million (USD 11,900), while juristic persons (companies) face a maximum fine of VND 500 million (USD 23,800).

Sanctioning Power

Under Decree 99, the Market Control Force is no longer permitted to deal only with infringement on the market, but is also empowered to inspect and sanction infringement directly at production sites, which is a major step forward from Decree 97.

In accordance with the 2012 Law on Handling Administrative Violations, Decree 99 also bestows sanctioning power upon the General Director of the General Department of Customs of Vietnam, who can sanction infringement at Vietnam’s borders.

Notably, under Decree 99, the Competition Authority of Vietnam is no longer entitled to deal with any unfair competition in the field of industrial property.

Valuation of Counterfeits

Counterfeits are no longer valued at the price of the genuine products. Because there are not always genuine products equivalent to the counterfeits, Decree 99 provides that counterfeits are valued as other infringing products. Specifically, the valuation of the counterfeit shall be based on (1) the tag price or the price in the purchase contract; (2) the price as posted by the local finance authority; or (3) the cost price. If it is not possible to value the counterfeits based on these grounds, the authority shall seek a valuation from a valuation council. The value of the counterfeits is of great importance in the determination of the fine.

Omission of Certain Infringing Acts

Under Decree 99, certain acts are no longer subject to sanctions. Most of these acts are related to the compliance of the putative infringer with the orders from the inspection workgroup in an ongoing inspection. To be more precise, Decree 99 does not sanction acts that prevent the inspection workgroup from inspecting/raiding the infringer, such as failure to comply with an order from the inspection workgroup, hindering the inspection/raid, and offending or disgracing the authorities.

Sanction on Counterfeit Marks/Stamps

Decree 99 determines the fine level for breaches relating to counterfeit marks/stamps based on the quantity of the seized marks/stamps. This is a major change as compared with Decree 97, which previously took into account the infringing acts, but not the quantity of the marks/stamps, when determining the fine level.

Power of Attorney in Enforcement

Decree 97 was quite vague on the formality of the power of attorney (POA) to be used in an enforcement action. As a result, in practice, different authorities had different POA requirements—some required it to be notarized and legalized, while others simply required it to be duly executed by the legal representative of the IPR holder.

Decree 99, however, clarifies the formality requirements so that the competent authorities will have a consistent understanding. As construed from Decree 99, the POA must be duly executed and notarized. In case of no notarization, the POA must be legalized.

Domain Name Disputes

Domain name disputes are still resolved by the administrative route. However, the time frame for a cyber-squatter to voluntarily surrender a disputed domain name under Decree 99 is 30 days from the date of the sanctioning decision. After the deadline expires, the competent authority will compulsorily withdraw the domain name. Given the previous one-year time frame for the voluntary withdrawal set forth by the guiding regulation of Decree 97 (i.e., Circular 37/2011/TT-BKHCN), the new timeline in Decree 99 demonstrates real progress.

As construed from Decree 99, a subordinate regulation of the decree is expected to be passed in the near future so as to provide guidelines regarding the procedure for the withdrawal and revocation of a disputed domain name.

Company Name Issue

Decree 99 prescribes a clearer and stronger legal consequence if a company with an infringing name fails to voluntarily change its name. Under Decree 97, the legal consequence of the failure was simply a publication of warning against the company on the national business registration gateway. But under Decree 99, within 60 days from the effective date of the sanctioning decision by the enforcement body, the company must change its name and record the change with the business registration authority. If it fails to do so, the business registration authority will revoke the business license of the company.

By clarifying a number of previously vague issues on administrative sanctions, Decree 99 should be helpful to IPR owners, as it improves the enforcement environment in Vietnam.

Keys for Successful Raid Actions in Vietnam

Infringement of intellectual property rights (IPRs) continues to be a major area of concern for international brand owners operating in Vietnam. In their fight against fake goods in the country, IPR holders often need to carry out administrative raids which can be very effective in suppressing counterfeit products, but are also fraught with potential hurdles. IPR holders therefore need to carefully plan their raid actions to minimize risk and maximize the suppression effect in the market. The following tips provide the basis for carrying out effective raid actions in Vietnam.

Collect Evidence

When IPR holders suspect counterfeiting, they should first conduct a thorough investigation to confirm the existence and extent of the counterfeiting. IPR holders will not be able to challenge any putative infringers without clear, concrete evidence. The evidence can take the form of photos of the fake goods on display, details of the scope and location of the infringement, and other relevant background information, which can only be collected through a serious investigation.

Choose the Right Enforcement Body

Vietnam has quite an extensive variety of authorities that are entitled to suppress counterfeiting. These include the Inspectorate of the Ministry of Science and Technology, the Inspectorate of the Ministry of Culture, the police, Market Control Force, and Customs. Unlike legal actions against copycats, these authorities can take actions against counterfeit goods on an ex officio basis without any request from the IPR holder.

With so many options, IPR holders must identify the most suitable authority to tackle each case. Typically, if the infringement is committed on a large scale and in a complex manner, enforcement bodies at the central (national) level should be chosen. These authorities are more interested in raiding major counterfeiters (manufacturers, importers, distributors, etc.) than small-scale shops. In lower-profile cases, authorities at the provincial level are the most suitable choice.

IPR holders should also try to determine whether the authority or the officials who are likely to handle the case have any relationship with the suspected infringers. In practice, some administrative raids fall flat due to leakage of information on the raids, which may be the result of those relationships.

Verify the Counterfeits

It is essential for IPR holders to prepare all necessary documents relating to the verification of fake goods during the enforcement actions. Usually, such documents are declarations by IPR holders stating that the goods found in the raid are indeed fake. However, in complex cases which involve a large quantity of counterfeits or where the differences between counterfeits and genuine goods cannot easily be recognized by the naked eye, IPR holders should dispatch at least one expert on their products to oversee the raid and help the authorities verify the goods on the spot.

Prepare for Countermeasures

IPR holders need to prepare themselves for any countermeasures that the infringers may employ. Infringers are usually poised with different counteractions intended to make life difficult for the IPR owner, such as an invalidation of the trademark registration or a counterattack based on any errors or oversights made by the IPR holder or the competent authority in the course of enforcing rights.

Support the Authorities

IPR holders should be ready to cover certain costs and expenses (transportation and storage of seized goods, etc.), which may arise during the raid or the case follow-up. As statutorily provided, IPR holders have the right to assist the competent authority in legal actions at their own expense. While this is not required, it is of great importance in rendering a smooth resolution of the case.

Expect the Unexpected

While some counterfeiters are simply ignorant of the law, most are fully aware that their actions are illegal and could lead to punishment. It is not in their interest to cooperate with an IPR holder’s investigation or raid, and they may even have a well-developed list of emergency measures to thwart the IPR holder’s efforts.

This is particularly evident with computer software. In practice, infringers of software hardly ever store the unlicensed copies in large quantities. They only write the software from a computer to blank disks upon the orders of customers, in which case the competent authorities fail to seize any software as the infringer permanently deletes it from their computers right at the time of the raid. Sometimes software dealers, particularly end users, will even interrupt the raid with a planned power cut, resulting in a fiasco. IPR holders therefore need to plan for all possible contingencies ahead of the raid.

Launch a PR Campaign

When a case comes to a conclusion, the brand owner may launch a public relations campaign not only to raise customer awareness, but also to deter potential infringers from targeting the brand. PR actions are particularly effective in cases where infringement is widespread (for example, in computer software infringement), or where the infringer has a large and well-known operation.

Monitor the Market

One successful raid does not mean that the battle against counterfeiters comes to an end. In fact, brand owners must keep an eye on the market to identify any recidivism committed by the sanctioned infringer or new entrants into the counterfeits market. By virtue of this market monitoring, the brand owner can take immediate action to address new infringement before it spreads.

Summary

Counterfeits take a toll on IPR holders’ and the public’s legitimate rights and interests, and thus have always been severely punished. During the administrative resolution of the case, if the act of counterfeiting is found to constitute a crime, counterfeiters in Vietnam can be criminally prosecuted.

Although the methods above do not guarantee successful enforcement, they work well and place IPR holders in a better position to overcome obstacles that may arise during enforcement actions. Ultimately, IPR holders need to be thorough, well prepared, and keep an even keel in any situation.

Unfair Competition: Vietnam’s Conflicting Decrees

On July 21, 2014, the Vietnam Government issued Decree 71/2014/ND-CP (Decree 71), which sets out the prescribed remedies for competition violations. Among these include sanctions in cases of antitrust, unfair dealings, and unfair competition. While these measures are a step in the right direction, they potentially conflict with last year’s Decree 99/2013/ND-CP on administrative sanctions in industrial property (Decree 99), complicating the enforcement of Decree 99.

Conflicts with Decree 99

Decree 71 restates the remedies in Decree 99 that are available in cases of unfair competition relating to industrial property. As a consequence of this restatement, a conflict arises between how the two decrees treat remedies, proceedings, and competent authorities.

In terms of remedies, Decree 71 states different levels of fines as compared to Decree 99. For example, Decree 71 lowers the ceiling fine to just VND 200 million (USD 9,430) on infringing juristic persons (i.e., companies) who palm-off their goods as the goods of other entities, whereas the same fine under Decree 99 is VND 500 million. For infringing individuals, the maximum fine drops from VND 250 million under Decree 99 to VND 100 million under Decree 71. Whether such lower levels of fines still act as a deterrent is questionable.

Although Decree 71 decreases the amount of fines for palming-off, it raises the fines imposed on cyber-squatting, the unauthorized use of trademarks by agents, and the infringement of trade secrets. Decree 71 also raises the fine from VND 10 million to VND 40 million on representatives or agents of brand owners who, without any authorization or justification of the owner, use marks that are protected in a foreign country and are also a contracting party to the Paris Convention. Additionally, Decree 71 applies the same fine to the registration or use of domain names that cause harm to the reputation and goodwill of trademarks, trade names, or geographical indications. It also creates a range of fines from VND 10 million to VND 30 million to sanction any unauthorized access, use, or disclosure of trade secrets. These fines are slightly higher than those under Decree 99.

As far as supplementary measures are concerned, Decree 71 leaves out some important measures that could render enforcement actions ineffective. Under Articles 28 and 29, Decree 71 provides for such supplementary measures as confiscation of the infringing goods and means whereby the violations are committed and confiscation of the profits earned from the unfair dealing. Bearing in mind these measures, brand owners would be uncertain as to whether they can recover a disputed domain name, force an infringer to change an infringing company name, or seek removal and/or destruction of the infringing elements of the infringing goods. Given the comprehensive and detailed measures under Decree 99, Decree 71 seems to be a step backwards in the fight against unfair competition acts relating to industrial property.

Decree 71 reduces the number of choices that competent authorities have to deal with unfair competition. Under the Decree, the only authority authorized to tackle misconduct relating to industrial property is the Vietnam Competition Authority of the Ministry of Industry and Trade. The Decree clearly rules out the other agencies that previously held such authority under Decree 99, including the Inspectorate of Science and Technology, Customs, the Inspectorate of Information and Communication, and the Market Control Bureau.

Under Article 43 of Decree 71, enforcement actions must follow specific proceedings laid out in Decree 116/2005/ND-CP (Decree 116) to deal with violations of competition regulations. Meanwhile, Decree 99 requires competent authorities to carry out enforcement actions in accordance with its administrative procedure and the Law on Handling Administrative Violations. Essentially, the proceedings under Decree 116 are quasi-administrative procedures and in the vicinity of administrative procedures and civil proceedings.

The proceedings do bring about positive progress when enabling the competent authorities to handle the disputes ex parte. Such ex parte resolutions are not available under the administrative measures governed by Decree 99 and the Law on Handling Administrative Violations. With the ex parte regime, Decree 71 can address cases where the infringers cannot be tracked down or disappear during the enforcement action.

Validity of Decree 99

Given the prevailing laws and regulations, it seems likely that Decree 71 will take precedence over Decree 99 in rulings on misconduct governed by both Decree 71 and Decree 99. While both decrees were promulgated by the government, Decree 71 was introduced at a later time. In accordance with Article 83.3 of the Law on the Promulgation of Legal Documents of 2008, the competent authorities will therefore give priority to Decree 71 in handling unfair competition relating to industrial property.

In addition, Articles 198.3 and 211.3 of the Law on Intellectual Property grant competent authorities the power to sanction acts of unfair competition relating to industrial property in cases of unfair competition. Accordingly, it seems that Decree 71 will supersede Decree 99 in dealing with unfair conduct cases relating to industrial property when it takes force on September 15, 2014.

Landmark Win in Lafarge Domain Name Dispute

On April 22, the People’s Court of the city of Da Nang issued a decision ordering the revocation of the “lafarge.com.vn” domain name registered by a Vietnamese individual, giving Lafarge S.A. of France a 10-day “sunrise” period to register the domain name itself. This brought to a conclusion a five-year battle over cybersquatting and set a precedent for domain name cases in Vietnam. In a report on the settlement, Vietnam’s national domain-name administration agency VNNIC stated, “This is the most prominent court settlement of a domain name dispute so far, and can be seen as a model for judicial bodies to apply for the settlement of disputes going forward.” Tilleke & Gibbins advised Lafarge on the case.

Case Background

France’s Lafarge SA, founded in 1833, is a world leader in building materials, specializing in cement, concrete, and aggregates. The company’s “LAFARGE” trademark has been protected in Vietnam since 1974, while its LAFARGE and Device trademark has been protected in Vietnam since 1995.

In 2009, Lafarge discovered that the Vietnamese domain name www.lafarge.com.vn had been registered by Pham Thi Ngoc Han, a woman from Da Nang. Concerned about the cyber-squatting, in February 2010, Lafarge sent a cease-and-desist letter to the registrant, seeking a voluntary return of the domain name to Lafarge. In reply to the letter, Ms. Han brazenly demanded USD 1,200,000 for the return of the domain name.

Concluding that the registrant had no legitimate interest in amicably resolving the case, Lafarge decided to proceed with legal actions to retrieve the disputed domain name. However, no authorities could help Lafarge to resolve the dispute. The Market Control Department of Da Nang could not handle the case although they interrogated the cyber-squatter. The Inspectorate of the Ministry of Information and Communications denied the administrative actions set forth under Decree 97/2010/ND-CP and declined to deal with the case by administrative route. The Inspectorate of the Ministry of Science and Technology, though they acknowledged the administrative action under Decree 97/2010/ND-CP, stayed the proceedings due to a lack of legal documents guiding the Decree. The Department of Science and Technology of Da Nang turned down the case as they could not summon the cyber-squatter.

When no administrative bodies accepted the dispute, Lafarge had to fall back on the court. On March 25, 2013, Lafarge brought a lawsuit against the cyber-squatter to recover the domain name, understanding that the defendant would likely be untraceable, having possibly fled to another country as she was being hunted for a criminal offense. Therefore, the plaintiff relied on various regulations to request the court to officially search for the defendant. The search of the court would pave the way for an ex parte resolution of the dispute.

When the timeframe for the search expired, the defendant still had not appeared. Accordingly, on April 22, 2014, the court opened an ex parte hearing to conclude the case. In the hearing, the court ordered a revocation of the domain name and gave Lafarge a sunrise period of 10 days to register the domain name after the revocation.

Significance of the Victory

The suit is the first ex parte IP case that the local Vietnamese courts have ever dealt with, setting a precedent for all future cases in which the parties cannot trace down the defendant. In light of Lafarge’s successful approach to achieving an ex parte hearing, other IPR holders need only follow suit to seek such a hearing for not only domain name dispute cases but also for other IP cases.

The case is the second domain name dispute case ever handled by the local courts, with the first being a dispute over the domain names “samsungmoible.vn” and “samsungmobile.com.vn” in 2011. The suit marks a positive development in applying the laws to resolve domain name disputes by the competent authorities. Currently, there are two parallel systems for resolution of domain name disputes, namely, a system set forth under the Law on Information and Technology and its subordinate documents and a system provided under the Law on Intellectual Property. In the Samsung case, the court relied mainly on the Law on Information and Technology to resolve the dispute. In the Lafarge case, the court seems to have also relied on the IP system.

Subordinate agencies under the Ministry of Information and Communication such as the Inspectorates of the Ministry often have refused to acknowledge the system under the IP Law. VNNIC, a subordinate agency under the Ministry in charge of withdrawing disputed domain names upon the request/order of competent authorities, had in fact usually disregarded the system under the IP Law and had declined to withdraw disputed domain names as instructed by the competent authorities attempting to resolve the disputes based on the IP system. In the Lafarge case, VNNIC dropped its objections and withdrew the domain name www.lafarge.com.vn after receiving the court’s judgment.