New joint circular should resolve the problem
It has been common practice in Vietnam for new companies to register names that consist of, or include, registered trade marks or other IP rights. Because of the lack of co-operation and the conflicting bureaucratic rules that exist between the two relevant ministries, the Ministry of Science and Technology (MoST) and the Ministry of Planning and Investment (MPI), it has often been difficult for IP owners to rectify the situation. When, for example, following a sanction decision, the MoST Inspectorate has requested an infringer to change its company name, it has often been faced with either a challenge or inaction on the part of the MPI, because of the unclear procedures involved and the frequently vague interpretation of the relevant laws.
This scenario is, however, expected to come to an end shortly, following a new circular issued jointly by the MoST and MPI on 5 April 2016 (No. 05/2016/TTLT-BKHCN-BKHDT). The new joint circular, which is due to come into effect on 20 May 2016, details and provides guidance on the handling of cases involving conflicting company names and IP rights. It aims to resolve the current situation in three major ways:
- Clarification of the competent authority decisions that can be enforced.
- Introduction of detailed procedures, with clear timeframes, for the handling of company name/IP right disputes.
- Clarification of responsibilities and required co-operation in the handling of the alleged conflicts.
It should be noted, however, that the strictest sanction, i.e. withdrawal of a Business Registration Certificate (BRC) is available only under the Law on Enterprises (Articles 209.1c and 211.1d) and only on the basis of a failure to submit a report that has been requested by the Business Registration Office (BRO) of the Department of Planning and Investment. There is no provision for withdrawal of a BRC on the basis of IP infringement. It remains to be seen how, in practice, the BRO will deal with the situation where an infringing company sends back its report/explanation in relation to the infringement.
Although some uncertainty remains in relation to the regulations concerning withdrawal of a BRC, however, the joint circular is groundbreaking and should be welcomed by IP owners: it achieves as much as can be expected from a joint circular. We look forward to further changes to the Law on Enterprises in relation to BRC withdrawal in due course. In the meantime, the joint circular represents a great step forward.