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In the context of increasingly deep international economic integration, trademark protection plays a key role in safeguarding the interests of businesses. The KIDO lawsuit is a typical example illustrating the importance of this issue in business practices in Vietnam.

1. Overview of the Legal Framework for Trademark Protection in Vietnam

Vietnam’s Intellectual Property Law has established a comprehensive legal framework for trademark protection. Accordingly, a trademark is defined as a sign used to distinguish goods or services of different organizations and individuals.

1.1. Key Legal Documents

  • Intellectual Property Law No. 50/2005/QH11 (as amended and supplemented).
  • Decrees guiding the implementation of industrial property regulations: Decree 99/2013/ND-CP, Decree 126/2021/ND-CP, Decree 46/2024/ND-CP, Decree 65/2023/ND-CP.
  • Circulars guiding the registration and protection of trademarks: Circular 23/2023/TT-BKHCN, Circular 11/2015/TT-BKHCN, Circular 06/2024/TT-BKHCN.

2. Analysis of the KIDO Lawsuit

2.1. Case Development

The KIDO lawsuit emerged as a typical case of trademark disputes between a group and its affiliated company.

This dispute arose after Nutifood became the parent company of KIDO Foods in September 2024, holding 51% of shares, while KIDO Group retained 49%. Previously, the ownership of the “Celano” trademark was transferred from KIDO Foods to KIDO Group in 2022. However, KIDO Foods continued to use and promote these trademarks without the approval of KIDO Group, leading the latter to file a lawsuit to protect its intellectual property rights.

The Ho Chi Minh City People’s Court issued a decision to apply provisional urgent measures against KIDO Foods JSC and Dat Viet Media JSC after reviewing the request from KIDO Group JSC. Accordingly, KIDO Foods was prohibited from using (including advertising, promoting, introducing, etc.) the “Celano” trademark. Additionally, Dat Viet Media was prohibited from advertising, promoting, or introducing the “Celano” trademark in the programs “Anh trai say hi” and “2 Ngày 1 Đêm,” including on their Facebook and TikTok channels.

2.2. Notable Legal Issues

Proving Ownership and Legal Use

  • Ownership of the “Celano” Trademark:
    • Before its establishment and trademark registration in 2007, the Merino ice cream brand belonged to KIDO Foods (then a single-member limited liability company) when the Group acquired Wall’s ice cream in 2003.
    • In June 2022, KIDO Foods transferred ownership of the “Celano” ice cream trademark (under protection) to KIDO Group.
    • KIDO Group had the Intellectual Property Office of Vietnam—under the Ministry of Science and Technology—amend the trademark registration certificate for this ice cream brand.
  • Capital Contribution at KIDO Foods:
    • In 2023, KIDO Group transferred 24% of its shares in KIDO Foods, reducing its ownership to 49%, thereby relinquishing control over this company.
    • In September 2024, Nutifood announced becoming the parent company of KIDO Foods (KDF) after acquiring 51% of the company’s shares.
    • Nutifood gained control over KIDO Foods; however, the “Celano” ice cream trademark remained owned by KIDO Group following its transfer from KIDO Foods. Despite no longer having controlling ownership, KIDO Group asserted that the “Celano” brand used by KIDO Foods for business activities was still owned by the Group. Thus, KIDO Foods’ use of the “Celano” ice cream trademark for commercial purposes without notifying KIDO Group constituted a violation of intellectual property rights.

Determining Damages and Compensation

  • Penalties for Trademark Infringement:
    • Article 129(1) of the Intellectual Property Law: Using a sign identical to a protected trademark for identical goods or services in the registered list without the trademark owner’s permission constitutes infringement of trademark rights.
    • Article 211(1) of the Intellectual Property Law: Those infringing on intellectual property rights causing damage shall be administratively sanctioned.
    • Article 11 of Decree 99/2013/ND-CP: Penalty levels for trademark infringement. It is necessary to determine the value of the “Celano” brand (value of infringing goods or services) to establish the penalty level.
  • Assessing Damages for Trademark Infringement (Article 204 of the Intellectual Property Law):
    • Material damages: Loss of property, reduced income or profits, loss of business opportunities, and reasonable costs to prevent or remedy damages.
    • Non-material damages: Damage to honor, dignity, reputation, or goodwill.
  • Compensation Claims for Trademark Infringement (Article 205 of the Intellectual Property Law):
    • Compensation for material damages is based on:
      • Total material damages in monetary terms plus the profits gained by KIDO Foods through the infringing act.
      • The license fee for using the “Celano” brand if KIDO Group had granted KIDO Foods a usage license under a contract for the scope of the infringement (e.g., advertising, promoting, and introducing products).
      • Other calculations proposed by KIDO Group following the law.
    • The court may set a compensation amount if it cannot be determined, capped at VND 500 million.
    • Compensation for non-material damages: VND 5 million to VND 50 million.
    • KIDO Group has the right to request the court to order KIDO Foods to pay reasonable attorney fees.

3. Lessons Learned

3.1. For Enterprises

Enterprises need to prioritize trademark registration from the early stages of operation. This not only protects their rights but also creates a competitive advantage in the market. To protect trademarks, enterprises must register them. After registration, trademarks may be limited to the scope of registered signs and products. For brands, the law does not provide direct protection. Therefore, to build a brand, enterprises must have a protected trademark.

Trademark Registration Guidelines

  1. Preliminary Trademark Search: To determine whether a trademark is identical or similar to that of another entity and to assess the likelihood of obtaining a protection certificate.
  2. Preparation of Application Documents

  • Required documents: Ensure the dossier meets the requirements of the Vietnam Intellectual Property Office (Articles 100.1, 101, and 105 of the Intellectual Property Law).
  • Accurate trademark description (Article 72 of the Intellectual Property Law):
    • The trademark must be a visible sign or sound represented graphically.
    • The trademark must distinguish the goods or services of its owner from those of others.
  • Classification of goods and services according to the Nice Classification:
    • Applicants must correctly classify goods and services according to the Nice Classification as published by the state authority.
    • If not classified or misclassified, the state authority will do so and charge classification fees (Article 105.3 of the Intellectual Property Law, Section V, 3.e of Decree 65/2023/ND-CP).

  1. Submission and Examination

  • Submit the application to the Vietnam Intellectual Property Office (Article 89 of the Intellectual Property Law):
    • Paper documents to the state management agency for industrial property rights
    • Electronic documents via the online application submission system
  • Examination process: (Articles 25, 26 of Circular 23/2023/TT-BKHCN)
    • Formality examination and publication of trademark applications.
    • Substantive examination of trademark applications.

The trademark registration process is guided by the National Public Service Portal: Trademark registration procedures.

3.2. In Terms of Law Enforcement

Law enforcement agencies need to strengthen their capacity to handle trademark infringement cases and improve dispute resolution processes. Some enforcement mechanisms to protect trademarks include:

  1. Administrative measures (Decree 99/2013/ND-CP as amended by Decree 126/2021/ND-CP and Decree 46/2024/ND-CP):

  • Imposing fines as prescribed by law.
  • Applying remedial measures:

  • Requiring the removal and destruction of infringing trademarks.
  • Requiring the destruction of materials and means of violation if the infringing elements cannot be removed.
  • Requiring changes to enterprise names and the removal of infringing elements in enterprise names.
  • Requiring the return of illicit profits gained from infringing acts.

  1. Civil measures (Article 202 of the Intellectual Property Law):

  • Requiring the cessation of infringing acts.
  • Requiring public apologies and corrections.
  • Requiring the fulfillment of civil obligations.
  • Requiring compensation for damages.
  • Requiring destruction, distribution, or non-commercial use of infringing goods.

  1. Criminal measures (Article 226 of the Criminal Code):

  • Fines ranging from 500,000,000 VND to 5,000,000,000 VND.
  • Suspension of operations.
  • Prohibition from engaging in specific fields.
  • Prohibition from raising capital.
  • Fines for non-administrative offenses (100,000,000 VND to 500,000,000 VND).

  1. Customs border control measures:

  • Temporarily suspending customs procedures for goods suspected of trademark infringement: This measure is carried out at the request of the trademark owner to collect information and evidence on the shipment for handling violations.
  • Inspecting and supervising to detect goods with signs of infringement: This is carried out at the request of the trademark owner to collect information for requesting suspension of customs procedures.

4. Proposals for Legal Improvement

To enhance trademark protection, it is necessary to:

Improve regulations on damage assessment in infringement cases:

  • Develop clear mechanisms for assessing damages, combining factors such as lost revenue, reputational harm, and expenses arising from infringement.
  • Apply international standards for damage assessment to increase transparency and fairness.
  • Provide specific guidelines to help enterprises prove and gather evidence of damages.

Strengthen sanctions for infringement acts:

  • Increase fines commensurate with actual damages and the severity of violations.
  • Strengthen non-monetary measures, such as revoking business licenses, requiring public apologies, and destroying infringing goods.
  • Strengthen investigation and adjudication processes to ensure timely and effective handling of infringement cases.

Simplify trademark registration procedures:

  • Shorten the processing time for trademark applications through technology adoption and digitization.
  • Increase support for enterprises, especially small and medium-sized businesses, during the trademark registration process.
  • Improve transparency in the approval process, minimize unnecessary steps, and reduce risks of disputes during the registration phase.

5. Conclusion

The KIDO lawsuit highlighted the importance of establishing and effectively enforcing a legal framework for trademark protection. Lessons from this case contribute to improving the legal system and raising enterprise awareness of intellectual property rights protection. For more information on the latest regulations on trademark protection, visit the Vietnam Intellectual Property Office.

Harley Miller Law Firm “HMLF”

Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.

Phone: +84 937215585

Website: hmlf.vn

Email: [email protected]

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