Judging the real value of a brand

by Le Quang Vinh, Attorney at Law – Partner BROSS & Partners Law Firm

A trademark or brand name is a commercial indicator with broad meaning. It can be a national brand (Made in Viet Nam); an indicator of a particular industry (Viet Nam Agricultural Product); a geographical or regional indicator (Phu Quoc sauce); a brand of a particular enterprise (Trung Nguyen coffee, Vinamilk milk, etc.); or a brand indicating a specific product or service (Wave motorbike, CLEAR shampoo, etc).

Brand can be viewed as a generic commercial term, while words like trademark, trade name, and geographical indicator are terms of art with specific legal meaning.

Most countries give exclusive protection to these forms of intellectual property, provided that ownership is registered. Rights of exclusive use are conferred on an owner based on two basic principles:

(1) the first-to-file rule. Where two or more applications for registration are filed by different parties to register marks that are identical (or confusingly similar), or for identical or similar goods or services, then a protection title is granted to the valid application with the earliest priority or filing date among applications which satisfy all conditions for the grant of a protection title. This rule is the same as followed in the granting of domain names.

(2) exclusivity limited by territory. Protection of a trademark recognised by a particular country extends only to that country.

Trademarks ‘stolen’

Recognising that a number of well-know Vietnamese brands have been appraised by foreign companies to be worth millions (e.g., P/S toothpaste, estimated to be worth US$5 million), some enterprises have attempted to take advantage of these two principles and attempted to "steal" well-known Vietnamese trademarks by registering them with other countries’ trademark authorities.

In 2002, Indonesian company P.T. Putra Stabat Industri registered the trademark of leading Vietnamese tobacco brand Vinataba in as many as12 countries, including China, Japan, South Korea and nine ASEAN member states.

In April 2002, a US corporation, the Nguyen Lai Corporation, lodged an application with the USPTO to register the trademark "PetroVietnam and flame device."

Afterwards, these firms typically offer to resell the mark to its genuine owner at a high price; force the genuine owner to sign distribution contracts; or prevent the genuine owner from exporting the goods bearing the trademark into relevant foreign markets.

Unlike fixed assets such as a house, a motorcyle, or a pen, things that are easily possessed, a brand (trademark) affixed on goods or services is intellectual property that cannot be physically possessed. Rights to such property can be infringed by counterfeiting, confusing consumers and undermining confidence in the legitimate product. such genuine trademark by other illicit competitors for wrongful benefits.

Registering trademarks is important, therefore, to confer title to the genuine owner of the trademark, and to provide the trademark owner with legal remedies to enforce the right to exclusively use the trademark and prevent public confusion over counterfeit goods or services.

In addition to registration domestically, marks also need to be registered in strategic foreign markets in which goods might be distributed in the future.

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