Cease and Desist Letter
The cease-and-desist letter is a valuable tool for intellectual property enforcement as it provides a formal warning to individuals or entities infringing on IP rights (“IPR”).
By clearly outlining the specific infringements and demanding that the infringing activities cease immediately, the letter sets the stage for potential legal action if necessary. Additionally, the letter can serve as a way to open up communication and potentially resolve the issue amicably before escalating to costly litigation. Ultimately, the C&D letter is a proactive measure that can help protect and defend intellectual property rights effectively.
In practice, the C&D letter usually serves as the first stage of any IP enforcement case. The IP owners will provide details about their background, related businesses, and IP rights (trademarks, copyrights, patents, or other rights). The end of the letter opens up about requests of the IP owners, typically for the opposing party to cease any infringing acts, and reserves of rights where the IP owner may opt to impose stricter actions without notifying the opposing party.
Rights of Self-Defense under IP Law and the Civil Code
Vietnam IP Law allows IPR owners to self-protect against infringements from 3rd parties, including self-defense measures (Article 9 and 125.1), where the IP owner is entitled to prevent any 3rd parties from using their IPR (with exclusions listed in Article 125.2). The Civil Code also precludes the right to self-defense in violations of civil rights (for individuals or legal persons), which include IP rights.
While the law does not specify which measures IPR owners could apply to prevent 3rd parties, it could be deduced that the IPR owners could apply mechanisms such as: i) knock-and-talk, ii) negotiation, or iii) requesting for enforcement action. This is where the Cease & Desist letter comes into play.
Sending a letter to the opposing party in any infringement case is considered the first step in enforcement action. It serves 03 main purposes:
- To educate the opposing party about the IPR owner’s background, information, and protected IP rights in Vietnam;
- To set out requests for the opposing party to cease infringements;
- To initiate contact between the IPR owners and the representative of the opposing party(s).
- In case of target’s non-compliance, it can be considered as ignorant to preventive attempts and increase sanction threshold in enforcement actions later on.
Practical view of the C&D letter in IP enforcement
Sending out a C&D letter, in most cases, is a no-brainer option thanks to its cost-effectiveness and advantages of direct address to the opposing party. The IPR owners may receive a response within a reasonable timeline with minimal cost. However, some IPR owners may see significant obstacles when dealing with the target via a C&D letter.
Firstly, as C&D letter practice becomes more and more popular, infringers in Vietnam have become somewhat acquainted with receiving letters from IPR owners. The non-binding effect of the letter imposes no responsibility on the infringer to respond back to the IPR owners; thus, there are cases where the infringer will ignore the letter, which challenges the IPR owners to settle the matter amicably before engaging in more costly options.
Secondly, for IPR owners with limited budgets, sending repeating C&D letter to an infringer might imply so to the other party. Infringers will continue with their infringement act, knowing that the IPR owners cannot afford to apply stricter, more costly mechanisms to prevent their infringement. In practice, retail infringers who receive C&D letters frequently from brand owners are very stubborn and ignorant of the requests.
Lastly, C&D letters is an engaging mechanism from the IPR that may have reverse effect. Infringers in the market may be aware of the IPR owner’s presence in Vietnam and try to avoid monitoring efforts from the IPR owners. For small retailers, it might be dealing counterfeits in more secretive manners. For more organized infringers, it might be countermeasures, such as slightly amending the infringements to avoid scrutiny or even fighting back attempts to exhaust the IPR owners of resources in enforcement activities. This also stems from the non-binding weakness of the C&D letter.
How to be effective
Nowadays, enforcement activities face various challenges, from the lack of human resources of the competent authorities to the complex nature of IP infringement in the market. Therefore, a C&D letter is still a very affordable option for IPR owners to impose their rights. However, given that a C&D letter is a method to engage with the target and negotiate compliance, it is best that IPR owners seek to strengthen their claims in their letter. Some of them are:
- Evidence Gathering: IPR Owners may seek to obtain evidence of infringement by observing or conducting official investigations into the infringers’ business. All evidence should be notarized to increase credibility and minimize the risks of the target temporarily hiding the infringing materials. All evidence can be included in the C&D letter to increase the chance of the infringer’s compliance, given that they can be enforced based on the notarized evidence;
- Conduct official infringement assessment: In Vietnam, the IPR owner may seek assessment of infringement from official bodies, including the Vietnam Institute of IP Research (VIPRI) or the Vietnam IP Office. The former is usually the top choice thanks to the quick results and credibility of enforcement action.
- Request the target to sign Undertakings: This will ensure that the infringer does not re-violate in the future, and can be deemed evidence of re-violation in administrative enforcement action.
- Actively follow-up post letter: The IPR Owners can follow up actively with the infringers to learn their point of view, benefits from infringements, and explain to the target the consequences of non-compliance. This stage should be done by a professional, ideally an experienced IP Attorney/IP Agent to ensure the best result in negotiating with the target.
Enforcing rights in Vietnam is a complex and ever-changing process. To deal with a 3rd party effectively, IPR Owners should carefully plan the strategy and budget to follow the case to the end. C&D letter is an effective measure, with minimal cause that can generate great results in that facet. It is essential that IPR Owners seek consulting, preferably with an experienced IP Attorney/Agent before proceeding.
Tung Pham
Enforcement Department
