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Samsung Electronics Co., Ltd. represented by D&N International wins the first domain name lawsuit in Vietnam

A positive signal for the Vietnamese enforcement system

The judgment No. 52/2011/KDTM-PT dated March 29, 2011 of the Appellate Court – the Supreme People’s Court in Hanoi, in favor of Plaintiff, Samsung Electronics Co., Ltd. (“Samsung Company”), on its claim in respect of the domain name samsungmobile.vn, has marked a new milestone in the history of the Vietnamese judicial system for enforcement of intellectual property and information technology laws. In this judgment, the Appellate Court decided to withdraw the above domain name and grant to Samsung Company priority right in its registration, amending the Verdict No. 69/2010/KDTM-ST of the first instance court. Previously, in the same case, on February 6, 2011, the First Instance Court – Hanoi People’s Court, rendered a similar verdict in respect of the domain name samsungmobile.com.vn.

The fact that Vietnamese courts, both at first instance and appellate instance, could have rendered judgment in favor of a company having domain names unlawfully cyber-squatted by some other companies and individuals, shows that domain name resolution may be effectively conducted by Vietnamese court, thus improves its pour image in the field of intellectual property and domain names, gives people reason to be confident in its effectiveness, thus encouraging them to bring their case before court. Moreover, this event will hopefully contribute to stop cyber-squatting activities, which is extremely active in Vietnam during recent years.

Facts

            On October 21, 2009, Samsung Company (“Plaintiff”), through its authorized representative, D&N International, a leading intellectual property law firm in Vietnam, filed a Complaint to Hanoi People’s Court against Mr. Duong Hong Minh and Vietnam Design and Technology Network Transfer Company (“ViTechNet”), of which Mr. Minh is director (“Defendant”), for having registered in bad faith the two domain names samsungmobile.com.vn and samsungmobile.vn, requesting the Court to issue judgment to withdraw the domain names and give to Samsung Company priority right in their registration and use.

      According to the case file, Samsung Company is the owner of the trademark “Samsung” for mobile phones under Trademark Registration Certificate No. 9142 dated September 16, 1993 issued by the Intellectual Property Office of Vietnam, and the international domain name samsungmobile.com. To support its business and activities in Vietnam, Samsung Company needs to register and use Vietnam domain names “.vn”. However, it could not, because the domain name samsungmobile.com.vn was registered in the name of Mr. Duong Hong Minh since November 3, 2005 and the domain name samsungmobile.vn in the name of ViTechNet since December 20, 2007. After their registration, Mr. Minh and ViTechNet offered for sale the domain name samsungmobile.com.vn at the price of VND80 million with promotional reward of the domain name samsungmobile.vn on the website www.muare.com.

In order to recover the domain names in which it has rights and legitimate interests, Samsung Company authorized D&N International to enter into contact with Mr. Minh and ViTechNet in an attempt to settle the above domain name dispute through conciliation. During the conciliation process, Samsung Company requested Mr. Minh and ViTechNet to stop using the two domain names and return them to Samsung Company. In consideration, Samsung Company would reimburse a reasonable expense that Mr. Minh and ViTechNet had paid for the registration and maintenance of the domain names. In response, Mr. Minh sent a quotation for transferring them to Samsung Company at the unreasonable price. According to him, such high price was determined based on the registration fees paid to VNNIC plus the fees for designing websites. He insisted that he did not offer the two domain names for sale in the website www.muare.com, and such offer was carried out by ViTechNet’s employees at their initiative.

With the above evidences, on June 2, 2010, the First Instance Court – Hanoi People’s Court, rendered verdict to withdraw the domain name samsungmobile.com.vn and give to Samsung Company priority right in its registration during 10 consecutive days. Nevertheless, the Court dismissed request to withdraw the second domain name (samsungmobile.vn), on the ground that it has been registered in the name of another person, Mr. Tran Ngoc Tien, since ViTechNet did not renew it upon its expiration.

In disagreement with the part of the first instance verdict in respect of the domain name samsungmobile.vn, Samsung Company filed an Appeal with the Appellate Court – the Supreme People’s Court in Hanoi, considering that grounds for its claims in respect of the two domain names are the same, therefore, the first instance verdict to withdraw one of them, but not the other, is inappropriate. The ground that the domain name is registered in the name of other person than defendant is not valid, as the law provides that disputed domain name must maintain status quo, not allowed to be transferred to any other organization or individual. Agreeing with the above arguments, the Appellate Court held on March 29, 2011 that the first instance verdict must be amended to withdraw the domain name samsungmobile.vn and give to Samsung Company priority right in its registration and use.

Comments:

           This Samsung case is very important for the Vietnamese judicial system for enforcement of laws in the fields of intellectual property and domain names, not only because this is the first domain name case ever brought to a Vietnamese court. More importantly, in this case, Vietnamese court has shown its capability to enforce the laws in a professional and effective way although intellectual property and internet resources are considered as new and difficult legal fields in Vietnam.

            The Law on Intellectual Property of 2005, amended in 2009, prohibits act of usurping domain names which are identical with or confusingly similar to a protected trademark. Nevertheless, cyber-squatting for the purpose of gaining illegitimate profits remains rampant in Vietnam, especially with respect to well known trademarks. The main reason for that is the general lack of confidence in Vietnamese courts. When facing with cyber-squatting, trademark owners usually are not confident in the courts’ ability to resolve their case properly, thus reluctant to initiate a lawsuit they consider cumbersome, expensive, and time consuming, while the outcome is uncertain and unpredicted.

            The success of Samsung Company in its recovery of both domain names samsungmobile.com.vn and samsungmobile.vn at both first instance and appellate instance shows that Vietnamese courts are capable to enforce laws in a proper, professional and effective way, would they have opportunity to do so. Efforts and perseverance of intellectual property right holders in enforcing their rights through civil action may be rewarded beyond expectation.

            This event sends also a very strong warning to cyber-squatters who have bad intention to register domain names in respect of which they do not have rights and legitimates interests with the purpose to gain undue profits, and will hopefully encourage intellectual property owners to be more active in the protection of their rights through civil action, thus hopefully contributing to possible development of an intellectual property court in Vietnam.

            On the legal aspect, the case raises the following issues:

  1. In order to have sufficient grounds to initiate a domain name dispute resolution lawsuit, all the three conditions provided for in item 1 section II of Circular 10/2008/TT-BTTTT dated December 24, 2008 of the Ministry of Information and Communication must be met: (i) The disputed domain name is identical with or confusingly similar to Plaintiff’s name; identical with or confusingly similar to the trademark or service mark in which the Plaintiff has rights or legitimate interests; (ii) Defendant has no rights or legitimate interests with respect to the disputed domain name; and (iii) The domain name has been used by Defendant in bad faith with regard to the Plaintiff.In this Samsung case, the courts held that the three above conditions have been met. The domain names samsungmobile.com.vn and samsungmobile.vn are confusingly similar to the “Samsung” trademark registered in Vietnam by Plaintiff for mobile phones. Defendant has no right and legitimate interest in respect of the two domain names because Defendant is not manufacturer or trader of Samsung mobile phones. Defendant has had bad intention because Defendant has offered the domain names for sale on the internet and sent an quotation for domain name transfer to Plaintiff and prevented Plaintiff from registering domain names corresponding to Plaintiff’s trademark.

Disputed domain names in a pending case must maintain the status quo, not allowed to be returned or withdrawn, or transferred to another registrar, or to any other organization or individual, in accordance with point 2.2, item 2 Section IV of Circular No. 10/2008/TT-BTTTT dated December 24, 2008 of the Ministry of Information and Communication. The Appellate Court held that the domain name samsungmobile.vn was still in the name of ViTechNet, Defendant, at the moment of initiation and acceptance of the case by the court, and was transferred to Mr. Tran Ngoc Tien when the case was still pending, causing damages to Plaintiff. The First Instance Court should have notified Defendant and domain name management authority to avoid the transfer. Accordingly, the Appellate Court amended the first instance verdict in favor of Plaintiff and gave to Plaintiff priority right in registration of the domain name samsungmobile.vn.