5 LESSONS FROM THE CASE OF A BUSINESS OWNER CRIMINALLY RESPONSIBLE FOR PRODUCING PEANUT CANDY THAT INFRINGES ON TRADEMARKS
15 Sep 2023
Vietnam
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The Bac Tu Liem District Court in Hanoi has convicted the owner of a candy-producing business for "Industrial Property Rights Infringement" under Article 226 of the 2015 Criminal Code. As a result, the business owner has been sentenced to 12 months of probation without detention. This is notable as one of disputes brought to trial in Vietnam.
In 2009, Ms. Tran Thi Hiep established a company producing peanut candy and employed Trieu Van My as a candy production worker. In 2013, Mr. My resigned and started his own business producing peanut candy under the brand “Toàn Mỹ.” In 2015, Mr. My obtained trademark protection for "Kẹo Sìu Châu Toàn Mỹ" by the Intellectual Property Office. (see Figure 1) Later, in 2020, Ms. Hiep founded Toan My Confectionery Production Company Limited ("Toan My Company"), which also produced peanut candy under the same "Toàn Mỹ" brand. Subsequently, Mr. My discovered the infringement and warned Ms. Hiep and her Toan My Company. However, Ms. Hiep refused to comply and added the phrase "Produced by Toan My company" on the package instead. (see Figure 2)
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Figure 1 – Registered trademarks of Mr. My |
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Figure 2 – Products of Toan My Company |
Based on the examination conclusion by Vietnam Intellectual Property Research Institute (VIPRI) , the packageof products owned by Toan My’s company contains the element which is supposed to infringe the trademark rights against Mr. My’s registered trademarks. As a result, Mr. My requested the Bac Tu Liem District Police to inspect Toan My Company and seized over 300 boxes of peanut candy worth VND 314 million (equivalent to EUR 12.560). The Bac Tu Liem District Court found that Ms. Hiep's actions constituted "Industrial Property Rights Infringement" in accordance with Article 226 of the Criminal Code 2015. The Court sentenced her to 12 months of non-custodial reform and mandated a compensation payment of VND 356 million (equivalent to EUR 14.240). At present, there remains uncertainty about whether Ms. Hiep will appeal the verdict or if the case will be further reviewed.
However, this case offers valuable lessons for businesses, especially those facing infringement of their industrial property rights in Vietnam.
1. Make sure your intellectual property rights are protected: In this matter, Mr. My proactively registered the package of his peanut candy as a 2D trademark as well as his "Tòan Mỹ" trademark. Registering beforehand plays an important role, especially when Vietnam follows "First to File” Principle." In this case, albeit Ms. Hiep operatedher business earlier, registering the trademark to obtain the priority rights gave Mr. My a completely superior advantage in case of the dispute.
2. Act quickly against the infringement: By seeking legal advice, conducting a trademark examination at the Vietnam Intellectual Property Research Institute (VIPRI) to obtain the conclusion of trademark infringment, and checking to obtain the violation information as soon as it was discovered. This helps Mr My to handle Ms. Hiep's violation entirely and effectively.
4. Compensation for damages: In this case, the Court required the plaintiff to compensate for damages without considering if it is caused as a consequence of the infringement by the direct responsibility of the two businesses trading products, namelyToan My Confectionery Production Company Limited and Thanh Lan Confectionery Production Company Limited. In this case, the Court ordered Ms. Hiep to compensate Mr. My VND 356 million, a fairly large amount, for an industrial property infringement in Vietnam. Even though the Court’s calculation of the compensation for Mr. My may need further analysis, the fact that the Court granted a high compensation will serve as a warning and encourage the rights holders to handle infringement actions through the Court.
Recently, Vietnamese courts have gained more experience handling cases related to criminal industrial property rights infringements. This showsthat Vietnam have focuses more on intellectual property litigation. Therefore, the rights holders can fully consider protecting their intellectual property rights through the Court in a more proactive manner instead of prioritizing administrative penalties for violations.
