DIFFERENTIATING “COUNTERFEIT GOODS” VS. “COUNTERFEIT MARK GOODS” VIA DEFINITION IN REGULATORY DOCUMENTS OF VIETNAM

“Counterfeit goods” and “Counterfeit mark goods” are two very difficult concepts to distinguish. In the media, the phrase “Counterfeit goods” appears quite commonly, while “Counterfeit mark goods” are used less or used more conservatively. Even the enforcement bodies and the Courts when adjudicating cases related to the production and distribution of “counterfeit goods” and/or “counterfeit trademark goods” are still confused, false accusations throughout for a long time, it is understandable that the public is confused or unable to distinguish the two concepts. Let's find out what causes this situation.

It was not until 2000, that the definition of “counterfeit goods” was defined in Vietnam regulations. “Counterfeit goods” include counterfeit goods in terms of quality and use; counterfeit goods in terms of trademarks, industrial designs, origin and origin of goods; and counterfeiting of marks. This regulation was contained in the Joint Circular No. 10/2000/TTLT-BTM-BTC-BCA-BKHCNMT dated April 27, 2000. With this concept, “counterfeit mark goods” was included in the concept of “counterfeit goods”. This has led to the result that for a long time, cases related to “counterfeit mark goods” were treated the same as cases related to “counterfeit goods”.

In 2005, the Law on Intellectual Property was first promulgated, the definition of “counterfeit trademark goods” finally had a clear concept. Accordingly, Article 213.2 stipulates: “Counterfeit trademark goods are goods or packages of goods affixed with trademarks or signs identical to or difficult to distinguish from the protected mark or geographical indication used for the exact products without the permission of the trademark owner or the organization managing the geographical indication.”

In 2013, Decree 185/2013/ND-CP on regulations on sanctioning of administrative violations in commercial activities, production and trading of counterfeit goods, banned goods and protection of consumers’ interests was promulgated. Article 3.8.g) stipulates that “Counterfeit goods in terms of intellectual property specified in Article 213 of the Law on Intellectual Property 2005”. As a result, the law has made a distinction, although very small and difficult to differentiate, between the two concepts of “counterfeit goods” and “counterfeit trademark goods”.

More specifically, “counterfeit trademark goods” were “classified” with other types of “counterfeit goods” conceptually, but they had been differentiated when handling. Specifically, “counterfeit trademark goods” would be handled in accordance with Decree 99/2013/ND-CP on sanctioning of administrative violations in the field of industrial property, instead of handling under Decree 185/2013/ND-CP like other counterfeit goods (see: Article 1.3 of Decree 185 stipulates: administrative violations in commercial activities in terms of … intellectual property… then the provisions of administrative sanctions shall be applied in the fields of state management).

Decree 185/2013/ND-CP on sanctioning of administrative violations in commercial activities, production and sale of counterfeit goods, banned goods and protection of consumers’ interests

Definition of “Counterfeit goods”

The Law on Intellectual Property 2005 was amended and supplemented in 2009

Definition of “Counterfeit Trademark goods”

Article 3.8. “Counterfeit goods” include:

a) Goods without having valuable use or effects; having valuable use or effects but do not match with sources by nature, names of goods; having valuable use or effects which do not match with the registered or notified valuable use or effects;

b) Goods having determined contents of main substances or in nutrients or other basic technical characteristics which have only reached a level of 70% and lower in comparison with the quality criteria or technical standards have been registered or notified to apply or to print on labels or packing of goods;

c) Medicines preventing or treating people, domestic animals without pharmaceutical substances; or with pharmaceutical substances but do not match with the registered contents; or not sufficient the registered pharmaceutical substances; with other pharmaceutical substances which are different from the pharmaceutical substances stated on the labels or packing of the goods;

d) Insecticides without active elements; or contents of active elements of 70% and below in comparison with the registered or notified quality criteria or technical standards; or not sufficient the registered active elements; or with active elements which are different with those stated on labels or packing of the goods;

e) Goods with labels or packing which have forged names or addresses of other entrepreneurs; trade names or product names; circulation registration codes, bar codes or the goods packing of other entrepreneurs;

e) Goods with labels or packing faking indications on origin or place of manufacturing, packing, assembling goods;

g) Goods have been forged in term of intellectual property rights as provided for by Article 213 of the 2005 Law on Intellectual Property Rights;

h) Forged stamps, labels or packing.

Article 213. Intellectual property counterfeit goods

1. Intellectual property counterfeit goods regulated in this Law comprise goods bearing counterfeit marks and goods bearing counterfeit geographical indications (hereinafter referred to as counterfeit mark goods) defined in clause 2 of this article and pirated goods defined in clause 3 of this article.

2. Counterfeit mark goods means goods or their packages bearing a mark or sign which is identical with or indistinguishable from a mark or geographical indication currently protected for those very goods, without permission from the mark owner or organization managing the geographical indication.

3. Pirated goods means copies made without permission from the copyright holder or related right holder.

However, as of 2013, “counterfeit trademark goods” were still within the scope of the concept of “counterfeit goods”. This led to a lot of inadequacies in handling cases related to “counterfeit goods” and “counterfeit trademark goods”. Faced with that situation, the Ministry of Justice issued Document No. 3250/BTP-PLHSHC dated August 26, 2019 to the Prime Minister, proposing the Government “amend and supplement relevant legal documents to ensure that there is a clear distinction between the concept of counterfeit goods and counterfeit trademark goods, as the basis for the determination of crimes”. The proposal of the Ministry of Justice was approved by the Prime Minister by Document No. 8172/VPCP-V.I dated September 11, 2019.

Immediately after that, for the first time in Vietnam’s judicial history, the definitions of “counterfeit goods” and “counterfeit trademark goods” were clearly delineated by Decree 98/2020/ND-CP (which was issued for replacing Decree 185/2013/ND-CP). Specifically, the definition of “counterfeit goods” no longer contained the object of “counterfeit intellectual property goods”.

Article 3.7 of Decree 98 stipulated: “counterfeit goods” include:

a) Goods whose uses are not consistent with their nature or names; the goods which are useless or whose uses are other than the announced or registered ones;

b) Goods of which one of quality indicators or basic specifications or the amount of primary substances contributing to their uses only reaches 70%, or less, compared to the minimum levels prescribed in technical regulations or quality standards registered, or announced, or specified in their labels or packages;

c) Counterfeit drugs defined in Clause 33 Article 2 of the 2016 Law on Pharmacy and counterfeit herbal ingredients defined in Clause 34 Article 2 of the 2016 Law on Pharmacy;

d) Veterinary drug or pesticide that does not contain any active ingredients; does not contain all of registered active ingredients; contains active ingredients other than those specified on its label or package; contains at least an active ingredient whose content only reaches 70%, or less, compared to the minimum level prescribed in relevant technical regulations or quality standards registered or announced;

dd) The good whose label or package containing information forging name or address of manufacturer, importer or distributor, forging registration number, declaration number or barcode of the good, forging package of good of another entity, or forging the origin of good or place of manufacturing, packaging or assembling;

e) Counterfeit stamps, labels and packages of goods.

Decree 98 took effect from October 15, 2020, so from that time, enforcement bodies and the Courts had full legal provisions from concepts to methods to handle “counterfeit goods” and “counterfeit intellectual property goods”.