Termination of a trademark

Termination of a trademark on the basis of non-use

CategoriesLegal News

Legal regulations and practical application

I. Current regulations of Vietnamese IP law

Article 136, Clause 2 of the Intellectual Property Law (IP Law) on the obligation to use trademarks provides:

“The owner of the mark is obliged to use the mark continuously. In case a mark is not used continuously for five years or more, the ownership of such mark shall be terminated according to the provisions of Article 95 of this Law”

In Article 95, Clause 1 d) on termination of validity of a protection title, it is stated that:

“The mark has not been used by the owner or the person authorized by the owner for a time-limit of five consecutive years prior to the date of the request for termination without good cause, unless the use is commenced or restarted at least three months prior to the date of the request for termination”

Considering the above two provisions, it can be seen that:

First, there is inconsistency in the use of term between Article 95 and Article 136 that lead to different interpretations of the same issue. Particularly, in Article 136, the trademark owner is obliged to use the mark continuously and if it is not used continuously for five years or more, then the ownership of that mark shall be terminated according to the provisions of Article 95. Meanwhile, in Article 95, it only states that the assumption of non-use for a time-limit of five consecutive years serves as a basis for considering termination of a trademark on non-use basis. It can be seen quite clearly that the provision “not continuously using for five years or more” gives a different meaning from non-use for a time-limit of five consecutive years”.

Secondly, we also believe that Article 136 above gives some points that are not consistent with international as well as Vietnamese practices. That is the first point of the article, it could be enough to just provide that “the owner is obliged to use the mark”, but not ““the owner is obliged to use the mark continuously“. And in the second point, it should be re-regulated that: the trademark owner takes the obligation to use the mark for five consecutive years or more (otherwise the trademark may be terminated according to regulations) in place of the wording: “…not used continuously for five years or more. By statement so, it would be more logic and also is compatible with the regulatory exclusions in Article 95: “except where use is commenced or resumed at least three months prior to the date of the termination request”

Thirdly, the term “trademark ownership to be terminated” as provided in Article 136 above is also inaccurate, confusing and incompatible with the name of the referred Article 95 on termination of protection titles. In all other provisions of the Law on Intellectual property as well as in practice, there is no procedure and written form of termination of ownership, but only the procedure for settlement and decision or notification on termination of the validity of the protection titles.

Fourthly, in Article 95, we deem that the use of the term “for a time-limit of five consecutive years is not totally correct, instead of this, it should be specified as: “for five consecutive years”.

Fifthly, although in practice, it is generally understood that the owner’s obligation of use of his mark counted from the date that the mark has been granted a protection title, neither of the above provisions specify when the owner’s obligation of use begins?

Sixthly, there being one another issue that we strongly believe it is more important than the current term “the continuity of the use” when considering the obligation of use of a registered trademark.In other words, it is time to legislate what is “genuine use of trademark”?

Termination of a trademark on the basis of non-use
Legal regulations and practical application
Termination of a trademark on the basis of non-use Legal regulations and practical application

Proposals to amend and supplement current regulations

From the above analysis and comments, we propose to amend and supplement Article 95 and Article 136 as follows:

Article 95, clause 1 d):

“The mark has not been actually used (genuine use) by the owner or the person authorized by the owner without justifiable reasons for five consecutive years after being granted a protection title, up to the date of request for termination, except where the use is commenced or resumed at least three months prior to the date of the request for termination.

The government shall detail and guide mote about the genuine use of trademark and justifiable reasons.”

Article 136 Clause 2:

 “The trademark owner is obliged to use his mark after being granted a protection title. In case a mark is not actually used for five consecutive years after granting, the protection title of that mark may be terminated according to the provisions of Article 95 of this Law”

II. Practical consideration and settlement of requests for invalidation of trademark protection titles on the basis of non-use

First, burden of proof of involved parties.

On one hand, when any third party files a request to terminate the validity of a protection title on the basis of non-use against a registered trademark, he is requested  to provide: the request of invalidation in the prescribed form along with content of the request, the evidence of non-use, related arguments, reasons.

On the other hand, the trademark owner, after receiving a notice from the National Office of Intellectual Property (NOIP) notifying that his trademark is being requested by a third party to be invalidated, he is required to present evidence of use of his trademark to oppose against third party’s request. In case the trademark owner does not have a reply within the fixed time limit or the answer is incorrect (cannot provide evidence to prove the use of the mark as prescribed), the NOIP will consider terminating the validity of the trademark’s protection title.

Second, the establishment of evidence.

Under current practice, establishing evidence to prove a non-use trademark is usually carried out through the following ways:

  1. Investigation/search by independent and functional agencies such as: Industry and Trade Information Center (Ministry of Industry and Trade), Market Magazine (Ministry of Finance).
  2. The party requesting for termination of validity may by himself conduct investigation, survey and search on physical market, on the internet through the Search engines like Google, Bing, Yahooo…
  3. Written opinions, responses from other state management agencies such as Tax authorities, Business registration agencies, Drug Administration of Vietnam (Ministry of Health).
  4. Getting bailiff notarization about non-use of trademark by the owner (or a third party authorized by the owner)

In fact, most of the requests for invalidation follow the method of establishing evidence No. 1) and basically, such kind of proofs is accepted by the NOIP for assuming and settlement. As for other types of evidence, they can also be consulted by the NOIP during the review and settlement of the case.

On the other hand, in the case of feedback, the trademark owner will collect and provide with proof of use in the forms of:

  1. Sales invoices, purchase and sale contracts and other means of transactions may display/affix a protection mark;
  2. Photographs of products bearing the protection mark, advertising materials and introductions about products bearing the protection mark;
  3. Referring and citing sources of trademark use such as the website of the trademark owner/licensee to use the mark, e-commerce platforms, service providers and other communication channels such as Facebook…
  4. Getting bailiff notarization or an Affidavit to prove the use of the trademark.

Notably, in order to be considered as legal proof of use, the aforementioned documents must be originals or certified/confirmed copies and clearly and specifically represent the trademark sample as protected. Transactions related to the use of the mark must indicate/relate to the product/service in the list of goods/services in the protection title, but not any product/service. Indications of the time and date of use, the place of use of the mark also need to be shown accurately and clearly on all forms of documents and evidence 1), 2) and 3) as above mentioned.

Thirdly, examining and evaluating evidence of use of trademark.

Hereinafter are some issues that have arisen in the practice, with no consistent understanding and application so far:

– Are the size, the scope and the frequency of use of the mark mandatory when assessing evidence of use? If so, can it be quantified?

– Are the value and the number of transactions related to the protection mark taken into account when evaluating the evidence?

– Products/services that are distributed by owners or third authorized parties to users but are not commercial products (gifts/sponsors, charity…) can be considered as evidence of trademark use?

– Is the actual use of a mark with a model, sample of a different mark (not completely identical, not identical) than that of the protected mark?

– Affixing the mark upon similar/related product/service but not the goods /services in the list indicated in the protections title to be considered as proof of use?

– Is the mere act of advertising/storage eligible to demonstrate trademark use?

– Products bearing the mark found in the market but not distributed or provided by the owner or a third authorized party official method (portable products, parallel imported goods, etc.) can be considered as proof of use?

– Information, documents related to IPR enforcement and protection activities such as customs supervision registration, request for handling of counterfeit goods, goods infringing upon acquired rights, IP assessment are considered as evidence of use of trademark?

– If a third party is allowed to use the mark by the trademark owner, but not thru a written contract or the contract is just signed by and between the two parties, but the same is not registered at the NOIP, can it be considered as proof of use of trademark?

– Acts of processing of goods under a contract of processing (OEM, ODM, OBM) performed in Vietnam and then exporting all goods to foreign markets can be considered as use of trademark in Vietnam?

Finally, a big problem that has been entangled for a long time but has not been thoroughly and effectively resolved is: according to the provisions of the Intellectual Property Law and its guiding documents, the procedure for settlement of requests for termination of validity of a protection title seems to be quite clear and detailed with the specific stages and deadlines below:

In case the third party requests for invalidation of a protection title, within 1 month from the date of receipt of the request, the NOIP shall notify in writing of the third party’s opinion to the title holder, in which the time limit is 2 months from the date of notification for the protection title holder to give opinions.

On the basis of consideration of opinions of the parties, NOIP shall issue a decision to terminate part or all of the validity of a protection title or to notify a refusal to terminate part or the whole of the validity of a protection title according to the provisions of Clause 4, Article 95 of the Intellectual Property Law.

The time limit for issuing a decision and notification mentioned at this point is 03 months from the date of expiry of the 2-month time limit specified at point 21.3.a without any opinion by the title holder or from the date of receiving the opinion of the title holder. This time limit may be extended for up to 3 months if the title holder has a different opinion from the applicant requesting the termination or invalidation of the protection title.

(Point 20 of Circular No. 16 dated June 30, 2016 of the Minister of Science and Technology)

However, in practice, procedures of review and settlement of a case requiring the termination of a protection title on the basis of non-use often takes at least from 02 to 03 years or even longer. In particular, for some cases, after many years from filing request and pursuing until the protection title under the request has expired because the owner no longer needs to use it, and does not renew his mark. To resolve such a situation, NOIP does not issue a decision or notice of settlement according to the provisions of Clause 4, Article 95 of the IP Law, but only notify by a brief notice that: due to the trademark (which is being requested to be terminated) has expired from the date of (…) without being extended, so NOIP will not continue to consider the request to terminate the validity of a protection title on the basis of non-use. Once receiving the notice of closing the case from NOIP, most of IP service organizations are put in the position to face with risks and difficulties when reporting, consulting, explaining to clients – who have previously authorized them to proceed with the request of termination of a protection title on the basis of non-use!

III. Petition:

From a practical perspective, while waiting for the IP Law to be amended and supplemented to make it more improved, we do hope that the NOIP will soon execute more proper solutions so as to quickly handle and settle the backlog cases that have lasted for many years.

Mr. Tang Duc Khuong

Litigation Department

INVESTIP IP LAW FIRM