Assignment of trademarks – Current regulations and practice in Vietnam

Assignment of the industrial property rights to a trademark means the trademark owner transferring/assigning its ownership of the trademark to another person. Under the current IP Law of Vietnam, a trademark assignment must be made in writing, i.e. a trademark assignment agreement, which shall be effective only when it is recorded with the Intellectual Property Office of Vietnam (“VNIPO”).

In this article, we will focus on some obstacles that a trademark owner may encounter during the recordal of a trademark assignment agreement with the VNIPO to which no solution is presently clear. In detail, Article 139 of the current IP Law stipulates some restrictions on trademark assignment, namely, “the assignment of the rights to trademarks must not cause confusion as to characteristics or origins of the goods or services bearing such trademarks”, with the most notable case where confusion as to the characteristics or origin of the goods or services bearing the mark is determined because the assigned trademark is identical with or confusingly similar to the trade name of the Assignor.

Under the previous practice, this ground of refusal used to be easily covercome by the submitting to the VNIPO the Assignor’s Declaration stating that the Assignor undertakes to cease or not to carry out any business activities in the Vietnamese markert using its trade name. However, currently this practice is no longer accepted by the VNIPO and, instead, some solutions have been provided in the VNIPO’s Guideline on the examination of the dossiers for recordal of assignment agreement of industrial property rights, which was issued on 31 December 2020 (this is the first official Guideline on the examination for this procedure since the IP Law came into effect). The solutions provided by the VNIPO are listed below:

(i) The Assignor has transferred the entire business premise and business activities under the trade name to the Assignee; or

(ii) The Assignor has deleted their business lines that are related to the goods/service bearing the assigned mark and such deletion must be recorded in the Assignor’s Certificate of Business Registration; or

(iii) The Assignor was dissolved and ceased to exist after the Assignment Agreement was signed, which must be proved by relevant documents; or

(iv) After the Assignment Agreement was signed, the Assignor already changed its name so as not to contain the element which is identical with or confusingly similar to the assigned trademark, and such change of name must be recorded in the relevant trademark registration certificate; or

(v) All other cases which meet the crieria as provided for in Article 74.2.k and Article 139 of the IP law of Vietnam.

We found that the above solutions (i), (ii), (iii) and (iv) can only be applicable in the case where the Assignor has a production and business establishment in Vietnam where the assigned trademark is terriorially valid. In the case where the Assignor does not have a production or business establishment in Vietnam, the above four solutions are not applicable because the IP rights to the trademark and trade name are only territorial, accordingly, when the said IP subject matters are protected or assigned in a country/territory, the protection and assignment thereof is effective only in that respective country/territory. As such, the requirements that the trademark owner changes its trade name or removes its business lines or transfers its entire production and business establishment in other foreign country/territory when the owner only wishes to ptransfer its trademark in Vietnam is impractical. In this connection, the Article 6 quater of the Paris Convention concerning trademark assignment stipulates that “When, in accordance with the law of a country of the Union, the assignment of a mark is valid only if it takes place at the same time as the transfer of the business or goodwill to which the mark belongs, it shall suffice for the recognition of such validity that the portion of the business or goodwill located in that country be transferred to the assignee, together with the exclusive right to manufacture in the said country, or to sell therein, the goods bearing the mark assigned” and we find that this stipulation is completely appropriate.

The fifth solution (v) listed above only stipulates generally that the assignment must meet the criteria as provided for at Article 74.2.k of the IP Law, specifically, the assigned trademark must not be identical with or similar to another person’s trade name currently in use if the use of such signs may cause confusion to consumers as to the origin of goods or services, and Article 139 of the IP Law, specifically, the assignment must not cause confusion as to the origin and characteristics of goods and services bearing the assigned trademark. However, as there are no further detailed guidelines, this solution is merely formalistic and impracticable.

We are still seeking for the answers to the above issue and will provide you with our further updates once available.

[Click HERE to read our article sumarizing a recent case in which we assisted a client to successfully overcome the Vietnam IPO’s refusal of a trademark assignment which is deemed to cause public confusion.]