Reality of business activities of trademark infringing goods in e-commerce .... The laws on control of business activities of trademark infringing goods in e-commerce in Vietnam .... Acc
BUSINESS ACTIVITIES OF TRADEMARK INFRINGING
Business activities in e-commerce
E-commerce, increasingly recognized in both business and social contexts, refers to the exchange of products and services through electronic media, primarily the Internet and interconnected networks According to the World Trade Organization (WTO), e-commerce encompasses the production, distribution, marketing, sale, or delivery of goods and services via electronic means.
E-commerce encompasses a wide range of economic activities beyond just the buying and selling of goods and services According to the United Nations Commission on International Trade Law (UNCITRAL), e-commerce is defined as the exchange of commercial information through electronic means, utilizing alternatives to traditional paper-based communication and information storage methods.
In Vietnam, e-commerce is defined by Decree No 52/2013/ND-CP as the process of conducting commercial activities, either partially or entirely, through electronic means that are connected to the Internet or mobile devices.
9 Anita Rosen (2000), The E-Commerce Question and Answer Book: A Survival Guide for Business Managers, USA: American Management Association, pp.5
10 The World Trade Organization, “Electronic commerce”, https://www.wto.org/english/thewto_e/minist_e/mc11_e/briefing_notes_e/bfecom_e.htm, last visited March 16,
11 The United Nations, “UNCITRAL Model Law on Electronic Commerce (1996) with additional article 5 bis as adopted in 1998”, https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_commerce, last visited March
16, 2022 telecommunications network or other open networks” 12 Meanwhile, according to Clause
According to Article 3 of the Commercial Law 2005, commercial activities encompass various profit-generating endeavors, such as the sale and purchase of goods, service provision, investment, and commercial promotion Consequently, Clause 1 of Article 3 in Decree No 52/2013/ND-CP defines e-commerce activities in Vietnam broadly, extending beyond mere buying and selling to include a wider range of profit-oriented activities.
According to Decree No 52/2013/ND-CP, e-commerce activities are organized in three main forms: (1) sales e-commerce websites; (2) e-commerce service provision websites, which encompass e-commerce trading floors, online auction sites, online promotion platforms, and other types as defined by the Ministry of Industry and Trade; and (3) applications installed on electronic devices that connect to the network, including both sales applications and e-commerce service provision applications.
E-commerce has some basic characteristics that are different from traditional commercial activities as follows:
The e-commerce market operates on a global scale, allowing buyers to access products from suppliers across the world without the constraints of national borders This significant advantage over traditional commerce has become particularly evident during the challenges posed by the Covid-19 pandemic However, the ability of e-commerce to transcend geographical limitations also complicates the determination of jurisdiction for territorial courts in resolving business infringement issues.
12 Clause 1 Article 3 of the Decree No 52/2013/ND-CP
13 Article 25 of the Decree No 52/2013/ND-CP
E-commerce transactions involve various participants who do not require direct contact or prior relationships Key subjects in e-commerce include owners of sales websites, service providers, sellers, customers, infrastructure providers, and individuals using electronic devices connected to networks for commercial activities.
The information network is crucial in the e-commerce market, as algorithms analyze user search and purchase behavior to deliver tailored product recommendations Major platforms like Google, Facebook, and various e-commerce sites provide users with access to a wide range of online stores, offering relevant information and enhancing the overall shopping experience.
E-commerce relies heavily on technical factors, which introduces potential risks such as the theft or disclosure of customer information, technical malfunctions, and system instability that can compromise overall security Consequently, security concerns remain a significant drawback for e-commerce businesses.
E-commerce operations are based on the same fundamental principles as regular physical stores; however, the most significant difference is that customers do not need
14 Article 24 of the Decree No 52/2013/ND-CP
In his doctoral thesis, Le Van Thiep (2016) examines the current state of e-commerce law in Vietnam, highlighting the legal frameworks and regulations that govern online commercial activities The research underscores the importance of adapting legal structures to keep pace with the rapid growth of the digital economy in the country Thiep's analysis provides valuable insights into the challenges and opportunities faced by e-commerce stakeholders in Vietnam, emphasizing the need for comprehensive legal reforms to enhance consumer protection and promote fair competition.
Thương mại điện tử đang thu hút người dùng một cách mạnh mẽ, khiến họ dễ bị "nghiện" với các nền tảng trực tuyến Các chiến lược tiếp thị thông minh và trải nghiệm người dùng tối ưu là những yếu tố quan trọng giúp các trang thương mại điện tử giữ chân khách hàng Sự tiện lợi trong việc mua sắm trực tuyến và sự phong phú của sản phẩm cũng đóng góp vào việc gia tăng sự hấp dẫn của thương mại điện tử.
E-commerce is a rapidly growing sector that enables transactions over the internet, allowing customers to shop from anywhere without geographical limitations However, it comes with significant disadvantages, including a reliance on internet connectivity, which can be inconsistent in some regions Security concerns are paramount, as poor implementation can lead to data breaches, and many consumers are hesitant to purchase products without physically trying them first The rise of mobile commerce is notable, with projections indicating that by 2025, nearly 73% of e-commerce sales will occur via mobile devices As e-commerce businesses invest in advanced security measures to protect customer data, they must also navigate challenges such as late deliveries, high technological costs, and intense competition, which can impact product quality and customer trust.
Once a customer selects a suitable product and places an order on an e-commerce website or app, the seller promptly receives a notification regarding the order.
When an order is accepted, the customer's web browser communicates with the server of the online shop, transmitting order data to a central order management system This data is then reconciled with inventory and payment information, utilizing platforms like PayPal and Shopee Pay, to confirm that both stock levels and customer funds are adequate for processing Once verification is complete, the central order management system notifies the online shop's server, displaying a confirmation message to the customer that their order has been successfully processed.
(iii) Delivery The final step in the e-commerce process is delivery Deliveries must be made quickly to meet consumer demand.
Reality of business activities of trademark infringing goods in e-commerce
In recent years, Vietnam's e-commerce sector has experienced significant growth, especially as the Covid-19 pandemic disrupted traditional markets This impressive expansion highlights the increasing reliance on online shopping in the country.
18 Donna Fuscaldo, “Everything You Need to Know About E-Commerce”, https://www.businessnewsdaily.com/15858-what-is-e-commerce.html, last visited March 16, 2022
E-commerce is increasingly encountering significant challenges, particularly regarding trademark protection and enforcement.
1.2.1 Trademarks and their use in e-commerce
As the economy evolves, trademarks are becoming more prevalent and recognized, establishing themselves as crucial intangible assets for both businesses and individuals In Vietnam, the legal definition of a trademark is outlined in Clause [insert relevant clause], highlighting its significance in the commercial landscape.
16 Article 4 of the the Law on Intellectual Property 2005, amended and supplemented
A trademark is defined as any sign that differentiates the goods or services of one organization or individual from another For a trademark to be protected, it must meet specific criteria: it should be a visible sign, which can include letters, words, drawings, images, or holograms, and may consist of one or more colors Additionally, it must effectively distinguish the trademark owner's goods or services from those of others.
To ensure trademark protection, owners must register their trademarks with the appropriate state agency, as mandated by regulations in most countries Once registered, trademark owners have the exclusive right to prevent unauthorized use of identical or similar signs by third parties for the same or related goods or services, especially if such use could confuse consumers regarding the origin of those goods and services This protection encompasses various actions, including the use of trademarks on products and packaging, marketing goods bearing the trademarks, and incorporating them in advertising and business documents.
20 Article 72 of the Law on Intellectual Property 2005, amended and supplemented 2009 and 2019
21 Article 129 of the Law on Intellectual Property 2005, amended and supplemented 2009 and 2019
The use of trademarks on e-commerce platforms usually has the following characteristics 22 :
Trademarks serve as essential links between buyers and sellers, enabling sellers to communicate product information effectively When customers seek to make a purchase, they often search using specific keywords, which leads them to various brand options To stand out in a competitive market, trademarks must convey key information such as prestige and product quality, influencing buyers' decisions and encouraging them to choose a particular product.
Trademarks play a crucial role in differentiating products and services from various businesses, allowing consumers to identify the source of products In the realm of e-commerce, trademarks not only serve to distinguish offerings for regular consumers but are also recognized by intelligent algorithms that assess these marks, highlighting the intersection of branding and technology in online platforms.
The integration of algorithmic systems, including artificial intelligence (AI) and augmented reality (AR), has significantly enhanced the effectiveness of trademark rights exploitation These advanced technologies provide substantial advantages for e-commerce shoppers by facilitating quick and convenient searches The algorithmic system streamlines the process by selecting, comparing, and suggesting various brands, all accomplished with just a few simple steps.
In the article by Phung Thi Yen and Nguyen Thai Ngan (2021), titled "Some New Acts of Using Trademarks in E-Commerce - Regulations in Some Countries and Recommendations for Vietnam," the authors explore the evolving landscape of trademark usage in the digital marketplace Presented at a scientific conference focused on legal issues related to digital transformation in international trade and business, this work analyzes regulatory frameworks from various countries while offering tailored recommendations for Vietnam to enhance its e-commerce trademark practices.
23 World Intellectual Property Organization, “What is a trademark?”, https://www.wipo.int/trademarks/en/, last visited March 16, 2022
Product recommendation engines are essential tools that analyze user preferences and behaviors to suggest relevant products While they effectively utilize keywords related to specific goods, this approach can inadvertently limit consumer choices and hinder the exploration of new products from different brands within the same category.
1.2.2 Business activities of trademark infringing goods in e-commerce
Trademark infringement occurs when unauthorized individuals engage in activities that violate the legal protections established by Intellectual Property Law The assessment of such infringement depends on the protection scope of the trademark in question and the likelihood of confusion between the protected and suspected infringing trademarks Additionally, the relationship between the goods associated with the trademarks and those listed in the trademark registration is crucial Other important factors include the subject, purpose, and location of the infringement, all of which play a significant role in determining trademark infringement under Intellectual Property Rights (IPR).
Trademark infringement in e-commerce manifests in various ways, including the use of others' trademarks as search keywords to leverage their brand reputation and attract customers Additionally, infringers may incorporate another's trademark into their online store's name, signage, or advertising, leading to customer confusion The sale of goods that violate trademarks is often blatant, with terms like "premium fake" or "super fake" being used Well-known brands such as Chanel, Nike, and Adidas are frequently counterfeited and readily available online.
“online market,” with costs starting at a few hundred thousand Viet Nam dong 27
In her 2017 doctoral thesis, Ha Thi Nguyet Thu discusses the need to enhance Vietnam's legal framework for addressing infringements of industrial property rights related to trademarks The research emphasizes the importance of improving legislation to effectively protect trademark rights in Vietnam, highlighting key challenges and proposing potential solutions.
26 Article 129 of the Law on Intellectual Property 2005, amended and supplemented 2009 and 2019
27 N Tri, N Binh, “Bat mai khong het hang hieu nhai, vi sao?”, https://tuoitre.vn/bat-mai-khong-het-hang-hieu- nhai-vi-sao-20210330080155661.htm, last visited March 16, 2022
However, because e-commerce and traditional commerce differ in many ways, the challenges surrounding determining IPR infringement on trademarks in e-commerce are distinct and more complex than in traditional commerce:
Determining accountability for intellectual property rights (IPR) infringement in e-commerce is a complex issue With advanced technology, infringers can often be identified through their authentication details, such as name, phone number, and email address, or indirectly via website operators and domain owners Additionally, since e-commerce involves multiple support services, the online seller bears primary responsibility, but the shared liability of traders and service providers must also be considered The liability of e-commerce platforms in trademark infringement cases remains a contentious topic, attracting significant interest from lawmakers and researchers in each specific instance.
In a 2019 trademark infringement case in Germany, the court ruled that Amazon was liable for trademark infringement When consumers searched for the keyword “ORTLIEB” on Google, a link was generated that led to both “ORTLIEB” products and those of its competitors on Amazon The court concluded that Ortlieb could challenge Amazon’s use of its trademark in the advertising, as it misled customers who were searching specifically for “ORTLIEB” branded products.
The laws on control of business activities of trademark infringing goods in e-commerce in Vietnam
Despite the implementation of regulations aimed at identifying and addressing trademark infringement in e-commerce, significant challenges persist Before delving into an analysis of the current regulatory inadequacies and proposed improvements in Chapter 2, the author will first outline these issues.
33 Clause 1 Article 199 of the Law on Intellectual Property 2005, amended and supplemented 2009 and 2019
Trong bối cảnh ngày càng gia tăng của hàng giả và hàng lậu trên không gian mạng, việc xử lý và quản lý các vấn đề này trở nên cấp thiết hơn bao giờ hết Các cơ quan chức năng cần tăng cường các biện pháp kiểm soát và xử lý vi phạm để bảo vệ quyền lợi người tiêu dùng Đồng thời, việc nâng cao nhận thức của người dân về tác hại của hàng giả cũng là một yếu tố quan trọng trong cuộc chiến chống lại tình trạng này.
Pham & Associates discuss the challenges of protecting intellectual property rights (IPR) in the digital and internet environments, both globally and in Vietnam Their article highlights the need for regulations that effectively govern business practices related to goods that infringe on trademarks in e-commerce This underscores the importance of robust legal frameworks to safeguard intellectual property in an increasingly digital marketplace.
The Law on Intellectual Property 2005, along with Law No 36/2009/QH12, introduced important amendments and guidelines addressing various intellectual property concerns In 2019, Law No 42/2019/QH14 was enacted to adapt to advancements in science and technology, particularly focusing on intellectual property issues within the e-commerce sector.
In order to control the trading of trademark infringing goods in e-commerce, the current Law on Intellectual Property has prescribed sanctions for infringing acts, specifically as follows:
Administrative remedies for trademark infringement vary based on the value of the infringing goods Offenders may face a warning or fines ranging from a minimum of 500,000 dong to a maximum of 250,000,000 dong for acts such as selling, transporting, storing, or displaying counterfeit products For those involved in selling or distributing goods with counterfeit marks, fines start at 4,000,000 dong and can also reach up to 250,000,000 dong Additionally, the severity of the violation can lead to further sanctions or remedial actions against the infringing parties.
36 Article 11 of the Decree No 99/2013/ND-CP
37 Article 12 of the Decree No 99/2013/ND-CP
Nevertheless, according to Article 11 and Article 12 of the Government’s Decree
According to No 99/2013/ND-CP dated August 29, 2013, administrative measures for trademark infringement only apply when two conditions are met: the infringement must be for business purposes, and the value of the infringing goods must not exceed 3,000,000 dong, or 5,000,000 dong for manufacturing, importing, trading, transporting, or storing counterfeit goods These regulations complicate the enforcement of trademark rights in e-commerce, as online transactions often lack a physical warehouse, and the value of infringing products may fall below the stipulated thresholds.
Civil remedies for trademark infringement, as outlined in Article 129 of the Law on Intellectual Property (2005, amended 2009 and 2019), include several court-enforced actions These remedies may involve the compulsory termination of infringing activities, mandatory public apologies and corrections, enforcement of civil obligations, payment of damages for losses incurred, and the destruction or regulated distribution of infringing goods and materials Such measures ensure that the rights of intellectual property holders are protected while minimizing any negative impact on their ability to exploit their rights.
Clause 4 of Article 202 of the Law on Intellectual Property, as amended in 2009 and 2019, outlines a measure for enforcing compensation for damages, which is widely recognized for its effectiveness in addressing intellectual property violations.
38 Article 202 of the Law on Intellectual Property 2005, amended and supplemented 2009 and 2019
In her article, Nguyen Phuong Thao discusses the compensation for damages arising from the infringement of intellectual property rights (IPR), particularly focusing on the loss of business opportunities The Vietnamese Journal of Legal Sciences highlights that both material and emotional damages can occur due to such infringements The extent of the damage is assessed based on the actual losses experienced by the IPR holder as a result of the infringement.
Under Article 226 of the Criminal Code 2015, as amended in 2017, both individuals and corporate entities are held liable for trademark infringements in Vietnam Individuals who deliberately violate industrial property rights can face fines of up to 1 billion dong or imprisonment for up to 3 years, depending on the severity of the offense For corporate entities found guilty of such violations, the penalties include fines up to 5 billion dong or a suspension of operations for a maximum of 2 years.
The Law on Intellectual Property (2005), amended in 2009 and 2019, outlines that infringements of intellectual property rights (IPR) can be addressed through civil, administrative, or criminal remedies However, it lacks comprehensive guidelines on protecting IPR specifically in the e-commerce sector The National Office of Intellectual Property (NOIP) is currently researching and planning amendments to the Law on Intellectual Property, aiming for inclusion in the National Assembly’s Law and Ordinance Development Program, with an implementation roadmap set for 2022 This initiative aligns with commitments under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), highlighting the urgent need to revise and strengthen trademark protection laws in the context of e-commerce.
40 Article 204 of the Law on Intellectual Property 2005, amended and supplemented 2009 and 2019
41 Clause 2 Article 226 of the Criminal Code 2015, amended and supplemented 2017
42 Point b clause 4 Article 226 of the Criminal Code 2015, amended and supplemented 2017
Bài viết của Nguyễn Hoàng nhấn mạnh tầm quan trọng của việc hoàn thiện pháp luật sở hữu trí tuệ nhằm giải quyết những điểm nghẽn cản trở sự phát triển của đất nước Ông cho rằng việc cải cách và nâng cao hiệu quả của hệ thống pháp lý sẽ thúc đẩy đổi mới sáng tạo và phát triển kinh tế bền vững Để đạt được điều này, cần có sự phối hợp chặt chẽ giữa các cơ quan chức năng và doanh nghiệp trong việc bảo vệ quyền sở hữu trí tuệ, từ đó tạo ra môi trường thuận lợi cho sự phát triển.
Decree No 52/2013/ND-CP prohibits the use of e-commerce for trading counterfeit goods or infringing on intellectual property rights (IPR) Sellers must adhere to laws regarding payment, advertising, promotion, consumer protection, and IPR when conducting business online Additionally, e-commerce platforms are required to verify seller information, implement monitoring mechanisms, and take prompt action against any reported legal violations by sellers on their trading floors.
The Government's Decree No 98/2020/ND-CP, enacted on August 26, 2020, outlines sanctions for administrative violations in e-commerce from Article 62 to Article 66 These regulations address penalties for violations related to commerce, production, trade in counterfeit and prohibited goods, and consumer rights protection, with a specific focus on trademark infringement in the e-commerce sector.
Violations of regulations concerning information and transactions on e-commerce websites or mobile applications can result in significant fines For the provision, trading, or sale of counterfeit goods or services that infringe on intellectual property rights, fines between 10,000,000 dong and 20,000,000 dong may be imposed Additionally, using unauthorized logos, paths, or other intellectual property can lead to fines ranging from 20,000,000 dong to 30,000,000 dong.
44 Point b clause 1 Article 4 of the Decree No 52/2013/ND-CP
45 Clause 6 Article 37 of the Decree No 52/2013/ND-CP
46 Article 36 of the Decree No 52/2013/ND-CP
REGULATIONS ON TRADEMARK INFRINGEMENT IN E-COMMERCE OF SOME COUNTRIES AND EXPERIENCE FOR
Regulations on trademark infringement in e-commerce in China
In just ten years, China has transformed from accounting for less than 1% of the global e-commerce market to becoming the largest, holding over 40% of the share By the end of 2020, China's retail e-commerce sector boasted 782 million internet users, more than double the U.S population, which ranks second in e-commerce Notably, Alibaba, one of China's leading e-commerce platforms, features 4.5 million active sellers, while Amazon, the U.S giant, has 1.5 million active sellers worldwide.
To effectively manage trademark infringement in the e-commerce sector, the Chinese Government has strengthened its legal framework beyond the Trademark Law of 1982, which has undergone amendments in 1993, 2001, and 2013 This includes the introduction of the E-Commerce Law in 2019, aimed at enhancing intellectual property rights (IPR) protection on online platforms Following this, the China National Intellectual Property Administration (CNIPA) made significant announcements on June 15, 2020, to further reinforce these regulations.
“Standards for the Judgment on Trademark Infringement” to strengthen trademark operation rules, unify enforcement standards, and maximize business innovation 56
54 Kevin Wei Wang, “Digital China: Powering the economy to global competitiveness”, https://www.mckinsey.com/featured-insights/china/digital-china-powering-the-economy-to-global- competitiveness, last visited March 30, 2022
55 Hsiao Chink Tang, “What is driving China’s e-commerce growth?”, https://www.eastasiaforum.org/2021/10/13/what-is-driving-chinas-e-commerce-growth/, last visited March 30,
56 Linda Liu & Partners, “The CNIPA issued the Standards for the Judgment on Trademark Infringement”, http://www.lindapatent.com/en/law_trademark/1083.html, last visited March 30, 2022
Diagram No 2 Top 10 Countries Ranked by Retail Ecommerce Sales, 2020 & 2021 57
(billions and % change) Regulations that should be noted regarding the online purchase and sale of infringing trademarks in the above legal documents include:
The CNIPA's Standards for the Judgment on Trademark Infringement provide clear criteria for determining trademark usage, which includes affixing marks on products and packaging, labeling trademarks on documents and transactions, and displaying trademarks in advertisements and commercial activities Additionally, these standards have adapted to modern practices by incorporating forms of trademark usage on online media, such as websites, social networking platforms, and apps.
QR codes, and so on
57 eMarketer, “Top 10 Countries, Ranked by Retail Ecommerce Sales, 2020 & 2021”, https://www.emarketer.com/chart/242909/top-10-countries-ranked-by-retail-ecommerce-sales-2020-2021- billions-change, last visited March 30, 2022
Trademark infringement encompasses various acts, including altering a registered trademark or using a combination of multiple trademarks, attaching colors to trademarks that are similar to others on identical or similar goods, and infringing on exclusive rights through complimentary goods Additionally, organizers of fairs, exhibitions, and e-commerce platforms may be liable if they fail to manage trademark infringement by exhibitors or users, especially if they were aware or should have been aware of such acts Lastly, online sellers who use domain names that are identical or similar to registered trademarks can cause customer confusion, further contributing to trademark infringement issues.
To enhance trademark management and safeguard brand reputation in e-commerce, the Trademark Law encourages manufacturers and traders to register their trademarks for exclusive use This registration is crucial for protecting intellectual property rights (IPR) on e-commerce platforms, as business owners are required to present valid certification documents, confirming their ownership of the trademarks Given that trademark registration operates on a first-to-file (FTF) basis, it is essential for right holders to register their trademarks promptly to secure their interests.
The China National Intellectual Property Administration has implemented a new Trademark Infringement Judgment Standard, which aims to enhance the legal framework surrounding trademark protection in China This development is significant for businesses and legal practitioners, as it provides clearer guidelines for assessing trademark infringement cases For more information, visit the article by King & Wood Mallesons on China Law Insight.
59 Alibaba Group, “Guidelines for intellectual property complaints”, https://ipp.alibabagroup.com/instruction/cn.htm#material2, last visited March 30, 2022
60 Article 31 of the Trademark Law of the People’s Republic of China 1982, amended and supplemented 1993,
Trademark registration provides businesses with a clear proof of ownership, essential for resolving disputes Infringement on registered trademarks can lead to significant penalties, including fines of 250,000 yuan for businesses with no or minimal revenue, or up to five times the revenue generated from the infringement for higher earnings, alongside potential criminal prosecution To safeguard evidence from being lost or inaccessible, Article 66 of the amended Law on Trademarks allows right holders to request provisional emergency measures prior to filing a formal petition This provision is particularly important in the fast-paced realm of internet trading, where quick information exchange can lead to the rapid erasure of evidence, complicating the identification of trademark violations.
In China, e-commerce platforms have a crucial responsibility to protect intellectual property rights (IPR), facing penalties ranging from 50,000 to 500,000 yuan for minor violations and up to 2,000,000 yuan for serious infringements Consequently, many platforms, such as Taobao, have established regulations to address IPR infringement complaints Violators may experience consequences like points deduction, activity limitations, product restrictions, removal, compensation for damages, or account lockout, depending on the case's severity Additionally, e-commerce platforms are prohibited from imposing unreasonable conditions or charges on consumers.
61 Article 60 of the Trademark Law of the People’s Republic of China 1982, amended and supplemented 1993,
62 Article 84 of the E-Commerce Law of the People’s Republic of China 2019
63 Alibaba Group, “Alibaba Intellectual Property Protection Infringement Complaint Handling Rules”, https://ipp.alibabagroup.com/infoContent.htm?skyWindowUrl=rules/info-cn, last visited March 30, 2022
Article 82 of the 2019 E-Commerce Law of the People's Republic of China mandates that e-commerce platforms retain transaction, product, and service information for a minimum of three years post-transaction This regulation ensures the integrity, confidentiality, and availability of transaction data, thereby providing a solid foundation for intellectual property rights (IPR) holders to enforce their rights effectively.
E-commerce platforms face challenges with IPR infringement complaints due to the exploitation of strict regulations by malicious parties, undermining their intended purpose A notable case occurred on June 4, 2018, when Beijing Weihai submitted a forged judgment claiming trademark infringement by another seller, leading to the removal of that seller’s products on Taobao and resulting in significant harm However, on March 31, 2020, the Beijing Internet Court ruled that Beijing Weihai had severely impacted Taobao’s business environment and should be held accountable, emphasizing the need for Taobao to adopt a more rigorous approach in evaluating goods removal requests.
Regulations on trademark infringement in e-commerce in U.S
The U.S e-commerce market, particularly through platforms like Amazon, plays a crucial role in the global expansion of e-commerce In 202
65 Article 31 of the E-Commerce Law of the People’s Republic of China 2019
Zhu Zhigang and He Wei provide an essential update on the evolving legislation and case law concerning online infringement in China Their article highlights significant changes and interpretations that impact anti-counterfeiting measures and online brand enforcement For more detailed insights, refer to the complete article available at World Trademark Review, last accessed on March 30, 2022.
According to Statista, retail e-commerce revenue in the United States is projected to reach $18.7 billion by 2025 As e-commerce continues to thrive in a global market with diverse products, understanding the legal regulations and guidelines established by leading U.S e-commerce platforms for managing intellectual property rights (IPR) violations is essential for effective trading practices.
Diagram No 3 Retail E-commerce Sales of the U.S from 2018 to 2024 69
(billions, % change, and % of total retail sales)
Trademark regulations in the United States primarily stem from two federal statutes: the Trademark Act of 1946, known as the Lanham Act, and the Trademark Counterfeiting Act of 1984 The Lanham Act provides civil remedies for trademark infringement, ensuring the protection of brand identity and consumer trust.
68 ecommerceDB, “The eCommerce market in the U.S.”, https://ecommercedb.com/en/markets/us/all, last visited March 30, 2022
The Trademark Counterfeiting Act of 1984 establishes criminal remedies for trademark infringement under the Lanham Act, while also outlining civil and criminal liabilities at both federal and state levels.
The Lanham Act governs the registration and protection of trademarks at the federal level as follows:
First, the legal basis for obtaining trademark rights A trademark owner in the
U.S can establish rights to a trademark on two grounds: (1) being the first to use the mark in commerce, or (2) being the first to register it with the U.S Patent And trademark Office Office (USPTO) This implies that the law also protects trademarks that become distinctive through commercial usage without the necessity for official registration Thus, using a trademark that is identical or confusingly similar to an already used trademark may be considered trademark infringement However, registering a trademark under the Lanham Act provides a complete defense against infringements 71
When evaluating trademark infringement, courts typically address two key questions: first, whether the accused party has utilized the trademark in commerce, and second, if such use creates confusion among consumers.
Clause 1 Article 32 and clause 1 Article 43 of the Lanham Act have prevented anyone from: (1) using counterfeit goods, copying, imitating registered trademarks to trade in goods, services in a manner that is likely to be misleading or deceptive to
I don't know!
71 Clause 6 Article 43 of the Lanham Act
Trademark infringement occurs when a commercial advertisement uses any word, term, name, symbol, or device that is likely to confuse or deceive customers regarding the affiliation, connection, or origin of goods and services This includes misrepresenting the characteristics, qualities, or geographical origin of products, leading to potential deception about sponsorship or approval by another entity.
The court evaluates the "likelihood of confusion" on a case-by-case basis, considering several key factors: the strength of the trademark, the relevance of the products, the similarity between the trademark owner's mark and the allegedly infringing mark, evidence of actual confusion, the marketing and sales channels of the products, the target customer demographic, the defendant’s intention behind using the mark, and the potential for product line expansion.
Sellers on the Amazon e-commerce platform are liable for any damages resulting from trademark infringement, which includes compensating for the defendant's profits, the claimant's damages, and legal costs This responsibility underscores the importance of adhering to trademark regulations to avoid potential financial repercussions.
In 2021, few trademark infringement cases on the Amazon platform led to litigation, as U.S law holds online intermediaries accountable for knowingly enabling the sale of counterfeit goods Consequently, these platforms must respond promptly to reports from rights holders, leading to a general satisfaction among these rights holders regarding the resolution of their concerns.
73 Legal Information Institute, “Trademark infringement”, https://www.law.cornell.edu/wex/trademark_infringement, last visited March 30, 2022
74 Article 35 of the Lanham Act infringer stops infringing after a complaint of trademark infringement is submitted to the Amazon platform and before a decision to pursue a lawsuit is made 75
In response to the widespread issue of counterfeit products, Amazon has introduced measures to assist rights holders in safeguarding their registered trademarks and reporting infringements globally These initiatives include the Amazon Brand Registry and established procedures for submitting infringement notices to facilitate Amazon's intervention.
The Amazon Brand Registry is a valuable tool designed for trademark owners under the Lanham Act, encouraging trademark registration It empowers rights holders to efficiently identify potentially infringing content on the platform through standard images, keywords, or ASINs, while also proactively searching for and removing suspected infringing or inauthentic listings According to Amazon, the implementation of this tool has led to a significant reduction in trademark infringement issues, with over 95% of infringement notices submitted by rights holders being promptly investigated and addressed.
Experience for Vietnam
Many countries have established detailed and effective laws for IPR protection in e-commerce, which also enhance the responsibilities of participants in this sector As e-commerce continues to grow rapidly, Vietnam's legal framework must be refined to address trademark usage in this domain This refinement aims to safeguard rights holders, protect consumers, and promote fair competition within the digital economy By examining both legislative practices and real-world applications of laws addressing trademark infringement in e-commerce from various countries, Vietnam can gain valuable insights to improve its own regulations on trademark protection in the e-commerce landscape.
To enhance trademark protection in e-commerce, it is essential to establish stricter and more detailed regulations regarding the definition, determination methods, nature, and extent of damages resulting from intellectual property rights (IPR) infringements The current criteria for violations, especially the concept of “signs confusingly similar to,” remain vague and require clarification to ensure effective enforcement and protection of trademarks.
In the article "Lost in the Amazon: How to Combat Trademark Infringement in the E-Commerce Marketplace," authors Joshua AR Aldort, Matthew Marrone, and Amber J Carpenter explore the challenges of trademark infringement within online marketplaces They emphasize the need for robust strategies to protect intellectual property rights in the digital landscape, particularly on platforms like Amazon The piece highlights various approaches to combat counterfeiting and safeguard brand integrity, making it essential reading for businesses navigating the complexities of e-commerce For more insights, visit the full article at World Trademark Review.
In her 2011 master's thesis, Nguyen Thi Pha discusses the complexities of trademark infringement under Vietnamese civil law, highlighting the challenges posed by sophisticated infringement activities, such as algorithmic violations, which remain unregulated She notes that Vietnamese courts typically evaluate trademarks in their entirety, suggesting that the U.S legal framework's emphasis on the "likelihood of confusion" could provide valuable insights for improving trademark protection in Vietnam.
Both China and the U.S emphasize refining regulations for determining trademark infringement, which is crucial for implementing effective control measures In Vietnam, as the country embraces the digital technology era, it is essential to establish clear criteria for identifying IPR infringement related to trademarks This includes outlining the order and procedures for trademark protection in e-commerce within the Law on Intellectual Property and associated legal documents Such measures are vital for safeguarding the rights of trademark holders and providing a framework for assessing damages and addressing legal issues arising from trademark infringement cases.
Second, the fine amount for trademark infringement under Decree No
The review and enhancement of Decree No 99/2013/ND-CP is essential to effectively deter trademark infringement Previously, under Article 13 of Decree No 106/2006/ND-CP, fines for trademark violations ranged from one to two times the value of the infringing goods However, with the implementation of Decree No 97/2010/ND-CP and the subsequent Decree No 99/2013/ND-CP, the method of calculating fines was changed to a fixed level, resulting in significantly lower penalties for numerous infringement cases.
Clause 8 of Article 39 in Circular No 01/2007/TT-BKHCN, issued by the Ministry of Science and Technology on February 14, 2007, outlines the implementation of Decree No 103/2006/ND-CP, which addresses the Law on Intellectual Property concerning industrial property This regulation highlights the challenges posed by trademark infringing goods, emphasizing the need to enhance deterrence and prevention measures against trademark infringement in both traditional and e-commerce markets.
To maintain a fair competitive environment in e-commerce, it is essential to clearly define the duties and obligations of all parties involved, particularly sellers and intermediary service providers.
Sellers are required to submit complete identity verification information to facilitate easy checks and management by authorities, while also allowing rights holders to efficiently search and confirm any infringements of their intellectual property rights (IPR).
Intermediary service providers, including e-commerce trading platforms and internet service providers, may be held accountable for users' violations of trademark intellectual property rights (IPR), unless these violations are protected from liability by relevant laws.
Intermediate service providers must be held accountable for violations if they are aware of them and fail to take necessary precautions to prevent them, demonstrating their inability to fulfill their obligations and responsibilities.
To address the damage from trademark infringement and prevent the destruction or distribution of infringing goods, it is crucial to consider provisional emergency measures prior to filing a court complaint, as outlined in Article 66 of the China Trademark Law The rapid advancement of science and technology has led to increasingly complex and varied methods of trademark infringement in e-commerce, presenting significant challenges for enforcement authorities Nonetheless, current legislation allows involved parties, their legal representatives, and relevant organizations to petition competent courts for necessary actions.
In their article, Nguyen Xuan Quang and Nguyen Ho Bich Hang discuss the challenges of online trading of trademark-infringing goods in Vietnam, highlighting the difficulties faced by right holders in gathering evidence after a lawsuit is initiated The authors emphasize that the dispersal of infringing goods and the potential erasure of infringement information on e-commerce platforms can hinder the protection of trademark rights To mitigate these issues, they suggest that legislators should consider allowing right holders and relevant parties to apply for provisional emergency measures before filing a lawsuit, provided there are sufficient grounds to do so.
To combat trademark infringement in e-commerce, it is essential to implement stringent import management regulations that prevent infringing goods from entering the domestic market Additionally, enhancing advanced technological measures is crucial for the timely detection of violations in the online environment, addressing the longstanding issue of infringing goods that has persisted in traditional commerce.
During the Workshop on "Developing Market for E-commerce Businesses in the Context of Digital Transformation" on November 17, 2021, Deputy Minister of Science and Technology, Mr Tran Van Tung, highlighted the rapid growth of the e-commerce market However, he pointed out significant challenges, including uneven development across regions and disparities in competition between domestic and foreign e-commerce platforms To address these issues, he emphasized the need for collaboration between regulatory authorities, scientists, and businesses, particularly those undergoing transitions.