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First unfair competition case handled by the administrative authority in Vietnam

According to domestic media, on September 1, 2006, a fine worth VND10,5 millions (USD660) was imposed by the Inspector of Ministry of Science and Technology (the MoST) on Ha Tay Pharmaceutical Joint-stock Company (HaTay PJSC) for an administrative violation in the field of industrial property and unfair competition. A VND10 millions (USD625) penalty was also imposed on its exclusive distributor, Xuyen A Company. Less than one year after the Decree 120 on Dealing with Breaches of the Competition Law came into effect, a violation of unfair competition law was handled by an administrative authority for the first time in Vietnam.
Facts
The trademark « GASTROPULGITE » is protected in Vietnam under the International application n° 314437 in the name of SCRAS, a member company of the French IPSEN Group. After finding that HaTay PJSC offered in the market a drug for treating digestive deaseases bearing the trademark « GASTRODIC », SCRAS lodged a complaint with the MoST Inspector against the Vietnamese company. According to SCRAS, the text, color scheme and layout presented in the boxes and packages of the GASTRODIC product is confusingly similar to its GASTROPULGITE product.
On August 30, 2006, the MoST Inspector and the Economic Criminal Investigation Department (called C15) of Ministry of Public Security carried out a search in the premises of Hatay PJSC and Xuyen A Company. They found 1,920 empty boxes and 57,600 empty packages bearing the trademark « GASTRODIC ». The representative of Hatay PJSC had to sign in the Infringement Report. In addition to the aboved mentioned fine, infringers were required to remove the infringing elements from infringing boxes and packages.
Comments
 
  1. The first unfair competition case handled by the MoST Inspector is a fruit brought by the application of Decree 120 of the Government on Dealing with Breaches of the Competition Law which provides details on monetary penalties. Previously unfair competition with regard to industrial property had been provided in Decree 54 dated October 3, 2000. However, because of the lack of provisions on enforcement aspects, no unfair competition act had been penalized before.
  2. In this case, Hatay PJSC was penalized for two different infringing acts, namely: (i) the use of the sign ® for an unregistered trademark on product boxes and packages to mislead the public as to the registration of the trademark in violation of Article 6-1-b of Decree 12 of the Government dated March 6,1999 on Handling of Administrative Violations in the Field of Industrial Property. Fine imposed for this act is VND500.000 (USD35); (ii) use of a misleading indication to create confusion in the customers’ mind as to the origin of the product for the purpose of competition in violation of Article 30-2 of Decree 120 and Article 130 of the IP Law. Fine for this act is VND10 million (USD660).
  3. Although a monetary penalty is culmulative, the total amount of fine remains rather low and therefore is not sufficiently discouraging (the total amount of penalty for the two companies is VND20.5 million or USD1,285). However, administrative measure remains presently the most effective and rapid way in dealing with infringement of  IP rights in Vietnam. This case is anyway  good news for the holders of IP rights because it shows the Vietnamese authorities’ willingness to deal more effectively with this problem.
(11/11/2006)