Vietnam To Muddle With The Zombie Trademark And Its Residual Goodwill – Mondaq News Alerts

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According to the authors Jerome Gilson and Anne Gilson LaLondein their article titled "The Zombie Trademark: A Windfalland A Pitfall" published on the INTA's TrademarkReporter Vol. 98 TMR, zombie brands are also called ghost brands,orphan brands, dinosaur brands, antique brands and graveyardbrands. Looking at the Vietnamese IP Law, it seems Section 74(2)(h)is the due provision matching with the concept of zombietrademark.

The National Office of Intellectual Property of Vietnam (the"NOIP") sometimes uses Section 74(2)(h) as refusalground, although of which applicability in practice is recentlydebatable. Such refusal ground states that an applied-for markshall be rejected if it is or contains signs identical with orconfusingly similar to another person's mark which has beenregistered for identical or similar goods or services, theregistration certificate of which has been invalidated for no morethan 5 years, except where the ground for such invalidation isnon-use of the mark according to Point d, Clause 1, Article 95 ofthis Law.

At first glance, the above ground for refusal seems to beproblem-free, but the existence of different interpretations leadsto the emergence of many disputes and persistent complaints overmany years and have not ended.

For the purpose of easy imagination, before looking into thedetailed analysis, we assume that the validity of earlier mark hasbeen terminated, namely, the expired mark X (owned by A), anothermark applied-for is the mark X' (filed by the applicant B) andre-applied-for mark X (filed by applicant C, although C isessentially A but its standing has become an applicant at the timeof re-filing) and it is also presumed that the marks X and X'are identical with or confusingly similar to, and used for goods orservices identical with or similar to, each other. Accordingly,there are basically three possible scenarios:

Scenario 1: X' is filed in the period where thevalidity the expired mark X has not yet expired 5 years and theNOIP's substantive examination report has not been come outduring such 5-year period.

Scenario 2: X' is filed in the period where thevalidity the expired mark X has not yet expired 5 years and theNOIP's substantive examination report has been released on orafter the point of time of expiry of such 5-year period.

Scenario 3: Same as Scenario 1 or 2, but Scenario 3emerges a new relevant incident, particularly, the re-applied-formark X filed by C (with the filing date later the filing date ofthe mark X' but still within such 5-year period). In thiscircumstance, kindly note that C may also lodge or not file anopposition against the mark X'.

In principle, the NOIP will ex officio refuse the markX' for all of the three scenarios. However, in the event thatthe applicant B of the mark X' provides for a marketinvestigation evidence showing that the mark X has not been usedfor at least 5 consecutive years calculated from the point of timeof non-use evidence by B backwards then the NOIP, from ourexperience, in practice, accepts the registration of the markX'. To our best knowledge, such non-use evidence admitted bythe NOIP is understood to comprise the supplement of non-useevidence to the pending applied-for mark X' before theNOIP's substantive examination report, or to a written responseagainst the NOIP's refusal or office action (also unofficiallycalled as Notice of Refusal 1).

Nevertheless, recently the NOIP has fundamentally changed itsviewpoint, even a 180-degree change. For example, in some practicalcases with similar elements to Scenarios 1, 2 and 3, meaning themark X' was rejected even if the applicant B submitted non-useevidence against the expired mark X prior to the point of time ofissuance of substantive examination report by the NOIP. But byreason of an opposition filed by A or C, the NOIP objectedprotection in favor of the mark X'. Subsequently, the applicantB replied to the Notice of Refusal 1, stating that at the time ofhis response, the validity of the expired mark X had expired morethan 5 years but the NOIP insisted on its refusal by issuing adecision on confirmation of refusal (unofficially known as Noticeof Refusal 2). Given the occurrence of the re-applied-for mark X byC, the applicant B was forced to oppose it based on the legalground stipulated at Section 90(2)2 . And a case thatappears to be simple turns into a double-dispute: the disputebetween B and C or/and between B and A, and the appeals by Bagainst the NOIP's refusals. Accordingly, the NOIP's changeof viewpoint may also imply that the future similar cases whosefacts merely resemble Scenario 1 or 2 would be disapproved by theNOIP the same as Scenario 3.

We take the view that the NOIP's point of view of refusal isboth inappropriate and ungrounded because the NOIP did not directlygo into the response/appeal by B contending that Section 74(2)(h)based-refusal ground had no longer existed at the time of thesubmission of response by B opposing the Notice of Refusal 1 the point of time where the certificate of registration ofthe expired mark X had been abandoned more than 5 years - then whydid the NOIP still utilize such provision as a legal ground?!.Instead of persuasive arguments, the NOIP only replied with asimple statement that C re-applied to register the expired mark X,coupling with its continuous making reference to Section 74(2)(h),although it is obvious that such legal ground is inapplicable

Some opine that the owner of the expired mark has the right tomaintain the priority date (for the purpose of re-registration)until the last day of the 5-year period since the validity of theexpired mark had been invalidated. Or some other similar point ofviews are that there is the existence of the concept"right to reserve re-registration" whereby C isof course entitled to re-register. However, all of these ideas arenot convincing because they are not based on any existing legalgrounds.

In order to determine the root cause of the problem, we think itis necessary to revert to the core principles of trademark law. Oneof the core tenets is goodwill. Goodwill is a concept that isdifficult to translate into Vietnamese but we can understand it asthe credibility, memory, connection objectively existed betweenconsumers/clients and goods/services bearing that trademark whenthese goods or services are sold, marketed or supplied. In thatsense, objectively speaking, there would be basically manydifferent types of goodwill in terms of content and status, ie.sort (a) no goodwill (this sort corresponds to the status ofregistered trademark but has not been put into use in commerce yetand Vietnamese consumers have never known its existence), sort (b)having goodwill in an insignificant level (not yet reached thethreshold of widely used and recognized under Section74(2)(g)3 ), and sort (c) having earned goodwill in avery considerable extent, meeting the criteria set out at Section74(2)(g).

From the rationale analyzed above, it is clear that one of theduties of Section 74(2)(h) is to deal with the matter of residualgoodwill that may be still left-over even if an invalidated mark(mainly due to non-renewal). The spirit of law is duly to protectconsumers, to avoid the possibility of deceiving them in terms oforigin of trade and by so stating, a particular statutory timelimit allowing the consumers to forget or end up a connection witha previous source of commerce likely residual in their minds ormemories, prior to re-registration by a third party other thanprevious owner, is an accurate thought.

The above accurate thought, however, needs to be changed tobetter fit and adapt the contemporary time and business environmentthat has been inherently changing so fast, especially because ofthe internet and technology, making the amount and speed ofinformation exchange by the public get more and faster. And ofcourse, the opposite side of such real phenomenon is that thepossibility of forgetting old information also becomes much fasterand shorter than before, according to which on the one hand thefive-year rule existed in Section 74(2)(h) is deemed outdated incomparison with other countries and in the other hand, the sameunintendedly causes a unreasonable hurdle irrationally baring thepublic or competitors from establishing their trademark rights.

By comparing with the trademark laws of some other countries, wefind that for example, China allows the re-registration of atrademark which has terminated under the name of another person onthe condition that it has exceeded one year from the date oftermination4 . Hong Kong Trademark Law requires that anexpired mark use as a ground for refusal of an application forre-registration of such expired mark within one year after theexpiry date, unless the Trademark Office has the ground to believethat the expired mark was not used in good faith in Hong Kongwithin 2 years right before that date5 . Similar to thetwo-year rule approach of Hong Kong, Malaysia provides that where asenior mark is removed from the national register for failure topay the renewal fee, for the purpose of determining the eligibilityof a junior mark that is identical with or similar to, the seniormark, and filed in a period of 1 year calculated from the date ofexpiry of the last renewal then the senior mark would be deemedexistent in the national register, except where the registrar hasthe basis for believing that there is no evidence of actual use ofthis senior mark for a consecutive 2-year period preceding thepoint of time on which the senior mark had been removed from theregister6 .

In the context of the amendment and revision of the 2005 IP Lawas revised, including the clarification of the interpretation ofSection 74(2)(h) above that would be unlikely take place in theshort term and on the other hand, the present context is very inneed of a unified understanding of how to resolve conflicts ordisputes in an equitable way, to balance the interests of rightholders, consumers and the freedom of competition, we have a fewsuggestions as follows:

In addition, the acceptance of market investigation evidenceshould be considered consistently, in particular, we would thinkthat the non-use investigation report made by the Industry andTrade Information Center (Ministry of Industry and Trade) or by theJournal of Market Price (Ministry of Finance) should be admissiblebecause they are initially and preliminary evidence whereas thetrademark owner is liable for counteracting.

Footnotes

This presentation was prepared and presented according tothe invitation of the Vietnam Intellectual Property Association(VIPA) on the occasion of the roundtable "Industrial propertyrepresentatives with innovations in the system" jointly heldby the VIPA and NOIP taking place on July 24, 2018 at the MuongThanh Hotel, 78 Tho Nhuom Street, Hanoi

2 Section 90 of Vietnam IP Law."First to file"principle

(2) Where there are two or more applications satisfyingall the conditions for the grant of a protection title and havingthe same earliest priority or filing date, a protection title mayonly be granted to a single application from such applications withagreement from all applicants. Without such an agreement, all suchapplications shall be refused the grant of a protectiontitle.

3 Section 74 of Vietnam IP Law. Distinctivenessof marks

(2) A mark shall be deemed to be indistinctive if it is asign falling into one of the following categories

(g) Signs identical with or confusingly similar toanother person's mark which has been widely used andrecognized for similar or identical goods or services beforethe filing date or the priority date, as applicable

4 Article 50 of the China Trademark Law (Originally inEnglish):

Within one year from the time where a registeredtrademark is cancelled or declared invalid, or is not renewed uponthe expiry of its validity period, the trademark office shall notapprove any application for registration of a trademark identicalwith or similar to the aforesaid trademark.

5 Article 5(3) of the Hong Kong Trademark Law

A trade mark which is an earlier trade mark under orby virtue of subsection (1)(a) shall continue tobe taken into account in determining the registrability of a latertrade mark for a period of 1 year after the date on which itsregistration expires unless the Registrar is satisfied the trademark has not been used in good faith in Hong Kong during the 2years immediately preceding that date

6 The Malaysia Trademark Law 1976 amended in 2006.Section 42. Status of unrenewed trade mark. Where a trade markhas been removed from the Register for nonpayment of the feefor renewal, it shall, nevertheless, for the purpose of anapplication for the registration of a trade mark within one yearfrom the date of expiration of the last registration be deemed tobe a trade mark which is already on the Register except that thissection shall not have effect when the Registrar is satisfiedeither

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Vietnam To Muddle With The Zombie Trademark And Its Residual Goodwill - Mondaq News Alerts

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