New Rules for Trade Names in the Business Registration of Enterprises
30 October 2012
The name of an enterprise is the most basic element of that enterprise’s reputation, image and brand. During business registration, it is important to clarify the proper use and registration of trade names to protect the brand. As part of a recent effort to create a more efficient administrative environment, the Government recently promulgated Decree No. 43/2010/ND-CP, dated April 15, 2010 (effective June 1, 2010), on business registration. Decree 43 replaces Decree No. 88/2008/ND-CP, dated August 29, 2006, and, amidst a slew of other changes, offers valuable assistance in declaring and protecting enterprise trade names.
Enterprises are prohibited to use trade names that are identical or confusingly similar to an already registered trade name of another enterprise. Previously, however, this prohibition was limited in geographic scale at the provincial level.
If a restaurant registered the name Horseshoe in Hanoi, a competitor could use the name Horseshoe in Ho Chi Minh City and not be in violation of the law. This caused problems for enforcement as trade names may only be protected based on their lawful establishment, and if the law allows for this dual registration, the Hanoi Horseshoe could do nothing to stop the Ho Chi Minh City Horseshoe.
In order to rectify this inconsistency, Decree 43 expands the territory in question from the province to the country level. In other words, enterprises wishing to register a trade name must now search from Ca Mau to Sapa before to make sure they have an original trade name. To help enterprises in this search, the Government has announced a National Database on Enterprise Registration that will contain information about every registered enterprise in Vietnam.
Under Decree 43, enterprises are prohibited from using protected trademarks or geographical indications in their trade names. There is an exception for enterprises that have received consent from the owners of such protected intellectual property. Registered trademarks and geographical indications are listed in the National Database on Trademarks and Geographical Indications stored at the National Office of Intellectual Property (NOIP).
Decree 43 has some weaknesses. It waffles when dealing with enterprises registered under the old regime. If an existing enterprise’s trade name is identical or confusingly similar with another existing enterprise’s trade name, there is little in the way in guidance. The enterprises are encouraged to negotiate with one another regarding the modification of the repeated trade name. There is no dispute resolution provision or deadline to finalize negotiations.
There is also a failure of urgency in Decree 43. When an enterprise uses a trade name that infringes another enterprise’s intellectual property rights, the violator has two months to change its trade name before administrative remedies come into play. Two months is a very long time to allow an unfettered abuse of something as important as a trade name.
Despite its flaws, Decree 43 is a step forward and gives enterprises a more sure footing on which to base their business’s future. The decree went into effect on June 1, 2010, but enterprises still have until January 1, 2011, before the provisions governing trade names are enforced.
