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Decree No. 106-2006/ND-CP on Dealing with Administrative Offences in Relation to Industrial Property

Practice shows that administrative action is most frequently chosen by intellectual property owners to inforce their rights in Vietnam as it is considered as more effective than civil action. However, the low level of administrative penalties provided by law in the past was not sufficiantly discouraging to infringers. To make the measure more attractive, Decree No. 106-2006/ND-CP dated September 22, 2006 has increased penalties in line with the scale of infringement. Decree 106 has become effective as of October 21, 2006 and replaced Decree No. 12/1999/ND-CP dated March 6, 1999 on Dealing with Administrative Offences in Relation to Industrial Property.
Decree 106 provides in detail for administrative authority competence and procedure for handling administrative breaches of industrial property (IP) rights. It also identifies types of conduct constituting such breaches and corresponding penalties. As before, main penalties include warning and fines. Additional penalties (such as confiscation of evidences and means of violation, suspension of infringer’s business activities etc…) and compulsary remedial measures (such as removal of infringing elements from the infringing goods, destruction or distribution for non commercial purpose of infringing goods, publication of corrective notices etc…) may also be imposed. But for the first time Decree 106 has proposed that penalties be calculated based on the actual value of detected infringing goods.
Below are details of penalties for administrative breaches of IP rights under Decree 106:
1. For acts of manufacturing, transporting, importing and selling articles bearing a mark or a geographical indication infringing the right of a protected one; and for acts  of infringement of rights with respect to a patent, an industrial design or a layout designe (i.e. manufacturing, selling, transporting, advertising, offering and storing for sale and importing goods infringing such rights for business purposes), fines to be imposed are calculated as follow (Article 12 & 14):
Value of infringing goods
Penalty
Up to  VND20 million
A warning or a fine of from 1 to 2 times the value
VND20 to 40 million
A fine of from 2 to 3 times the value
VND40 to 60 million
A fine of from 3 to 4 times the value
Over VND60 million
A fine of from 4 to 5 times the value
2. For acts of infringement of IP rights with respect to trademarks, geographical indications and trade names (i.e attaching elements infringing such rights to goods, selling, transporting, advertising, offering or storing for sale, importing goods bearing infringing elements), fines to be imposed are calculated as follow (Article 13):
Value of infringing goods
Penalty
Up to VND 15 million
A warning or a fine of from 1 to 2 times the value
VND15 to 30 million
A fine of from 2 to 3 times the value
VND30 to 45 million
A fine of from 3 to 4 times the value
Over VND45 million
A fine of from 4 to 5 times the value
Where a symbol infringing IP rights with respect to trademarks, geographical indications and trade names is attached to a business document, a business means or a shop sign, a VND10 to 15 million fine may be imposed.
3. For acts of manufacturing, importing, transporting, commercialising, storing for sale goods bearing a counterfeit mark or a counterfeit geographical indication, fines to be imposed are calculated as follow (Article 15):
Value of infringing goods
Penalty
Up to VND 10 million
A warning or a fine of from 1 to 2 times the value
VND10 to 20 million
A fine of from 2 to 3 times the value
VND20 to 30 million
A fine of from 3 to 4 times the value
Over VND30 million
A fine of from 4 to 5 times the value
4. For other types of offences
a)                     Fines for offences relating to procedures of establishment, exercice and protection of IP rights include: (i) VND1 to 3 million for acts of amending and erasing the content of a certificate of protection of IP rights or other documents proving such rights; (ii) VND5 to 10 million for acts of supplying false information and evidence during IP related legal proceedings; (iii) VND10 to 15 million for acts of falsifying documents during IP related legal proceedings (Article 6):
b)                     For breaches of regulations on indication of the legal status of protection: A VND1 to 3 million fine may be imposed for acts of suplying false information about the legal ownership, goods/services bearing protected elements, authors or legal status of protection of IP rights (Article 9).
c)                     For breaches of regulations on confidentiality of data: A VND7 to 10 million fine may be imposed for acts of breaching confidentiality of test results supplied during a procedure for obtaining a business license or a license for distribution of pharmaceutical and agrochemical products (Article 10).
d)                     For illegal obstructions of state officers’ inspection and control:  a VND100 thousand to 4 million fine may be imposed, depending on the nature of offences. Details of penalties for such offences are  provided in detail in Article 11.
e)                     For offences relating to IP representation, a VND1 to 5 million fine may be imposed, depending on the nature of offences. Details of penalties for such offences are  provided in detail in Article 7.    
f)                       For offences relating to industrial property expert profession, a VND10 to 20 million may be imposed, depending on the nature of offences. Details of penalties for such offences are  provided in detail in Article 8.
g)                     For acts of unfaire competition in relation to IP and breaches of business secret, administrative penalties will be imposed in compliance with the competion law.
(*) US$1 = about VND16,000
(23/1/2007)