Legal Briefing

Resolution of domain name disputes in Vietnam

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Technology, Media and Telecoms | 01 October 2011

With nearly one-third of the Vietnamese population online, the role of the internet in both domestic and international commerce has grown substantially in recent years. According to The Economist, one-quarter of Vietnamese enterprises has used the internet to receive and place orders, with 12% using internet marketplaces to trade goods.1 While trade names serve to identify ‘bricks and mortar’ retailers, in the online commercial environment, domain names are the primary identifiers of source for goods and services. Such identifiers carry particular significance in countries like Vietnam, where the population maintains a relatively high awareness of brand use online.2 ?

Until recently, the use of trade marks and other forms of intellectual property on the internet was not of significant concern to intellectual property rights (IPR) holders in the country. However, due to increases in internet subscription and online commercial activity, rights holders have grown increasingly concerned with the abuse or misappropriation of IPRs online. Moreover, recent disputes between foreign rights holders and local registrants over domain names that incorporate high-profile trade marks or trade names have served to increase rights holders’ awareness of domain name infringement and speculation.

There are a number of options available to brand owners to prevent the misuse of trade names and trade marks online, and to resolve disputes arising from domain name abuse or speculation. This article outlines the measures available and provides specific information in relation to their utilisation. It also offers an overview of best practice in Vietnam, which should help rights holders develop effective domain name strategies.

DOMAIN NAMES IN VIETNAM

Registration of .vn domain names

The right to register a .vn domain name has been available since 1998, when the National Post Office released decision 705/1997/QD-TCBD, which set forth procedures on the registration and management of domain names. In 2000 the Vietnam Internet Network Information Center (VNNIC) was established in accordance with Official Letter No 321/CP-CN of the government and Decision No 372/QD-TCBD of the National Post Office. Since then, the VNNIC has maintained authority over domain name registration and registration procedures.

Currently, .vn country-level domain names, including second-level domain names such as .com.vn, .edu.vn, and .org.vn, are registered with the VNNIC on a first come, first served basis through accredited registrars. Although previous regulations placed limitations on the nationality or location of registrants, any organisation or individual can currently register a .vn domain name by submitting application materials to an accredited registrar. And while several regulations published by the governing body of the VNNIC – the Ministry of Information and Communications (MOIC) – necessitate compliance with regulations on intellectual property, the VNNIC does not currently require applicants to provide evidence of ownership of IP rights in the domain name they are seeking to register.

Speculation and abuse

With significant growth in internet usage and online commercial activities in the country, it is probably inevitable that infringing and fraudulent activities on the internet have increased. Speculative and abusive registration of .vn country-level domain names has also become a growing problem. Such misuse often takes the form of registering domain names that contain or closely imitate the trade marks of foreign companies, or maintaining a .vn domain name after a licence or business relationship with the trade mark owner has expired or been terminated. In certain instances, registrants may choose to point infringing domain names to derogatory websites.

In each case, the registrant acts in ‘bad faith’, seeking to exploit the good will of the foreign party’s trade mark. Several major multinational corporations have seen domain names incorporating their trade names or marks being registered by third parties in Vietnam for the purpose of profiting from the well-known mark, or in the hope of obtaining a sizable payment for the domain name.

Rights holders often learn of such infringement well after the initial registration of the domain name. In 2006, the US-based auction website Ebay attempted to register ebay.com.vn, having previously registered ebay.vn, but was informed that the domain name had been registered by a Vietnamese enterprise in 2003. Similarly, in 2003, International Business Machines (IBM) filed for registration of ibm.com.vn, only to find that an individual based in Ho Chi Minh City had registered the domain name earlier that year. Both companies filed administrative complaints with the competent authority, but failed to recover the assigned domains.3

In response to growing claims of infringement, the MOIC and the VNNIC have set forth regulations to enable IPR holders to claim priority in relation to infringing domain names and to have access to reparative measures. A detailed review of the legal framework governing dispute resolution, as well as a list of options available to rights holders facing domain name disputes, is set out below.

OPTIONS AVAILABLE TO RESOLVE DOMAIN NAME DISPUTES

Laws and authorities governing disputes

In Vietnam, the laws governing domain name disputes are:

  • The 2005 Law on Intellectual Property (IP Law 2005);
  • The 2006 Law on Information Technology (IT Law 2006);
  • Decree 97/2008/ND-CP (Decree 97);
  • Circular No 9/2008/TT-BTTTT (Circular 9);
  • Circular 10/2008/TT-BTTT (Circular 10); and
  • VNNIC Guidelines on Handling of Disputed .vn Domain Names.

In Vietnam, as in other countries, disputes related to generic top-level domains such as .com, .net, and .org, are governed by procedures stipulated by the Internet Corporation for Assigned Names and Numbers (ICANN), or the Uniform Domain Name Dispute Resolution Policy (UDRP). Under this policy, a complainant can file a complaint with a court or dispute-resolution provider for recovery of a domain name. For successful recovery, the complainant must prove that:

  1. The domain name is identical or confusingly similar to its trade mark;
  2. The registrant has no rights or legitimate interests in the domain name; and
  3. The domain name has been registered and is being used in bad faith.4

UDRP procedure, however, is only applied to generic top-level domain names in Vietnam. The VNNIC does not subscribe to the UDRP in relation to disputes involving .vn domain names; instead, it relies on domestic regulations.

The relevant domestic regulations are based on provisions in IT Law 2006 and subsequent Decree 97. The IT Law 2006 stipulates that domain name disputes shall be resolved through:

  1. informal negotiations or conciliation;
  2. arbitration; or
  3. civil proceedings in the Vietnamese court.5

Decree 97 affirms these forms of dispute resolution, as well as the first come, first served registration principle and the authority of the MOIC (formerly the Ministry of Posts and Telematics) to promulgate further regulations.6

In 2008, the MOIC promulgated two circulars to set forth methods of dispute resolution, bases for official complaints and evidentiary requirements for disputes. Circular 9 prohibits speculation of domain names, and again confirms that domain name disputes shall be resolved through the three forms provided by the IT Law 2006.7 Circular 10 sets forth specific criteria necessary to use the methods of dispute resolution stipulated above. These criteria cover:

  1. The relationship between the disputed domain name and the protected name or mark;
  2. Evidence of rights and legitimate interests with regard to the name or mark; and
  3. Evidence of bad faith in utilisation of the name or mark.8

While still untested in the context of domain name disputes, it should be noted that the IP Law 2005 defines the misuse of IPRs in the registration of domain names as ‘unfair competition’. Specifically, ‘unfair competition’ includes acts of registering or possessing domain names identical or confusingly similar to protected trade marks, trade names, or geographical indications for the purpose of ‘benefiting from or prejudicing the reputation or popularity of the mark, indication or name.’9 In addition to MOIC regulations providing for civil litigation in cases of dispute, the IP Law 2005 provides an additional basis for civil complaints within Vietnamese courts.

The legal framework referred to above provides rights holders with several options for dealing with individuals or organisations who register infringing domain names in Vietnam. While certain procedures will prove more effective in certain cases, many of the following policies and procedures have been used to recover infringing domain names and obtain priority rights to re-registration under the applicable law.

VNNIC general procedures

In 2010, the VNNIC promulgated guidelines that make provision for a temporary freeze of .vn domain names under dispute. A complainant may file with the registrars a request that a disputed domain name be held for 60 days. If the complainant can provide evidence of successful mediation or the acceptance of a case for litigation or arbitration, the domain name will remain ‘frozen’ while awaiting further review.

Upon receipt of an affirmative arbitration or court decision, or a voluntary settlement agreement, the VNNIC will provide the complainant with priority rights to registration within a specified time frame. If the complainant has not registered the domain name by the specified end date, it will be released for registration by any third party. Moreover, if the complainant cannot provide evidence of a successful mediation, or court or arbitral decision within 60 days, the domain name will be released to the respondent.

Voluntary negotiations and settlements

Beyond the initial steps of VNNIC administrative procedure, many rights holders choose to send a cease and desist or ‘warning’ letter to site registrants, outlining legal liability and requesting take-down of the site. The notice will typically allow the rights holder to enter into negotiations for settlement and/or handover of the infringing domain name. If the parties come to a financial agreement covering the cost of registration and site maintenance for the initial registrant, the site can be removed and held for priority registration under VNNIC guidance.

As voluntary negotiations of this sort can be quick and cost-effective, rights holders often choose to rely on them to settle disputes. However, complainants should be aware that such settlements may encourage others to engage in the speculative or abusive registration of domain names containing well-known marks or names.

Arbitration

Arbitration is available to foreign and domestic parties in Vietnam, under conditions provided by the 2010 Law on Commercial Arbitration. The law allows parties to enter into arbitration to resolve:

  1. disputes between parties arising from commercial activities;
  2. disputes arising between parties at least one of whom is engaged in commercial activities; and
  3. other disputes between parties which the law stipulates shall be resolved by arbitration.

Additionally, the parties must have a valid arbitration agreement in place prior to initiating proceedings.10

In cases where arbitration is a permitted means of resolution, rights holders can file an arbitration request with the relevant arbitration centre. Upon receipt of the request, the centre will notify the respondent and require a statement of defence. Depending on the arbitration clause of the underlying contract, an arbitrator or arbitral tribunal will review the case and verify evidence, and convene a hearing to settle the dispute. In contrast to earlier regulations, the 2010 Law on Commercial Arbitration allows for the relevant authorities to enforce the collection of arbitral awards.

While arbitration can often prove to be faster and more efficient than typical litigation proceedings, underlying contracts or commercial agreements necessary for arbitration are relatively rare in domain name disputes. And although claimants now have access to well-known arbitrators based in Vietnam and other countries in the region, the cost of preparing for and engaging in arbitral proceedings can be prohibitively high.

Litigation

Like arbitration, litigation is available to foreign individuals and organisations in Vietnam under conditions provided by the 2005 Civil Code (s7).11 To initiate a civil complaint, claimants in domain name disputes must file a petition with the proper court. After jurisdictional review, the court will decide whether to accept the case or refer the petition to a separate court or jurisdiction. If the court proceeds with the complaint, the claimant and respondent will be required to attend a compulsory conciliation meeting. The court will only schedule a first instance hearing if the claimant and respondent are unable to reach a voluntary agreement through conciliation.

In addition to general requirements stipulated by the civil code and regulations governing civil proceedings, claimants in domain name disputes are expected to provide evidence demonstrating that:

  1. the domain name is identical or confusingly similar to the complainant’s trade mark;
  2. the respondent has no legitimate rights to or interest in the trade mark; and
  3. the respondent acted in bad faith in registering and using the domain name.12

Litigation in Vietnam can be costly and time-consuming, often requiring several years for the filing of statements, evidence, and motions for appeal before reaching a conclusion. In addition, potential complainants often have serious concerns in relation to the Vietnamese judiciary; in particular, the fact that judges are unfamiliar with technical issues related to intellectual property or information technology.

However, the landscape for domain name litigation changed in early 2011, when an appellate court ruled in favour of the South Korean technology conglomerate Samsung and reassigned two disputed .vn domain names to the company. In 2009, the company became aware of two infringing sites using the Samsung trade mark and attempted to engage in settlement negotiations with the infringer. After failing to reach an agreement, the company filed a civil complaint with the Economic Court of the Hanoi People’s Court. The company won priority rights to one of the domain names at the first instance hearing, and after filing an appeal with the Supreme People’s Court in Hanoi, received a revised ruling providing priority rights to both domain names in 2011.13

Given the lack of swift and cost-effective procedures to handle domain name infringement in Vietnam, the Samsung case was received as a positive reminder that litigation can be a legitimate course of action for rights holders seeking to take action against domain name infringement. The subsequent decision may also serve to inform infringers that Vietnam’s ‘first come, first served’ registration policy does not protect registrants in cases of bona fide cyber squatting or malicious infringement. The decisions effectively offer rights holders additional mechanisms to handle infringers who use well-known marks and names to conduct business over the internet, and reaffirm the processes necessary to resolve such disputes.

Administrative sanctions

According to applicable law, complainants in domain name disputes are entitled to file administrative complaints that can result in financial penalties being imposed on respondents. Decree 97 sets forth administrative sanctions for those who register domain names confusingly similar to registered trade marks, geographical indications, and trade names, for the purpose of appropriating the domain, or damaging the prestige and reputation of the respective marks, names or indications. Such acts are subject to a monetary fine of VD5m to VD20m (approximately $250 to $1000).

However, since the promulgation of the IP Law 2005 and subsequent regulations, no procedures or guidelines have been published in relation to the ‘proof of damage’ to registered marks, trade names, or geographical indications that is required. Without such procedures or guidelines, rights holders are unable to take administrative action against registrants of infringing domains.

RECOMMENDATIONS FOR AN EFFECTIVE DOMAIN NAME STRATEGY

Recommendations for rights holders

Rights holders have a number of options available for the resolution of domain name disputes in Vietnam. In addition to taking action against infringers, rights holders can take a number of precautionary steps to protect their intellectual property and reduce the risk of infringement. Such steps may include the following:

  1. They should defensively register domain names that include key trade marks and trade names or variations thereof. The cost for doing so is usually negligible as opposed to the potential cost of recovering an infringing domain name from a cybersquatter. The VNNIC maintains a list of accredited registrars online, through which rights holders can file applications for registration of domain names.
  2. As per VNNIC guidelines, which require complainants to closely monitor changes to the registration of disputed domains, rights holders should regularly monitor registration of .vn domain names that may incorporate relevant forms of intellectual property. The VNNIC maintains a WHOIS searching mechanism online, which rights holders can use to search for domain names incorporating or similar to their trade marks or trade names.
  3. If an infringing domain name is identified, rights holders should carefully review the nature of the infringement before developing a long-term strategy. Certain points to consider include whether the mark is a key trade mark, whether the website is active, the profile of the registrant (including whether the registrant is a repeat offender), and any evidence of bad faith.
  4. Trade mark holders should consider taking strong action against clear domain name speculation. As noted above, initial steps include sending a warning letter and engaging in communications regarding the voluntary handover of the site. In the absence of a voluntary agreement, rights holders should seek further legal advice to assess the feasibility of arbitration, litigation, or other means of enforcing intellectual property protections.
Recommendations for authorities and policymakers

In addition to the above, the public sector should also co-operate to align state policies with regard to domain name registration and dispute resolution. Several laws and regulations under the purview of the Ministry of Science and Technology (MOST) define infringing activities related to domain names as ‘unfair competition’, while certain regulations under MOIC require compliance with laws on intellectual property. However, the MOIC has not promulgated guidelines or regulations implementing these provisions.

The MOIC and the MOST should co-ordinate an effective strategy, providing additional measures for rights holders to reduce the incidence of domain name infringement and resolve disputes. Such measures should include means to file administrative complaints and impose sanctions on infringers. While current procedures allow for appropriate relief, the provision of administrative sanctions would offer rights holders an efficient means of addressing infringement. It would also act as a deterrent to potential infringers.

CONCLUSION

While rights holders often face significant challenges to effectively resolving domain name disputes in Vietnam, recent regulatory changes and court decisions have reaffirmed the viability of available resolution procedures. With the role of online commerce growing in Vietnam, foreign rights holders should remain vigilant and take forceful action when faced with clear and deleterious infringement. And while the judiciary has taken strong steps to protect the rights of IPR holders involved in domain name disputes, further co-ordination by state agencies could serve to simplify dispute resolution procedures and reduce the prevalence of domain name infringement in the country.

Notes

  1. Economist Intelligence Unit. ‘Vietnam technology: Overview of e-commerce’. The Economist 1 April 2011: 1. Web.
  2. In a recent survey by the global research firm Nielsen, nearly 80% of Vietnamese respondents followed brands or companies online. ‘Southeast Asians highly influenced by online advertising: Nielsen.’ Thanh Nien News. 23 August 2011. Web.
  3. ‘Mot so các vu viec tiêu bieu ve tranh chap tên mien .VN.’ Tranh Chap Tên Mien tranhchaptenmien.vn. Trung Tâm Internet Viet Nam, n.p. Web. 5 August 2011.
  4. ‘Uniform Domain Name Dispute Resolution Policy’ http://www.icann.org/en/udrp/udrp.htm. Internet Corporation for Assigned Names and Numbers, n.p. Web. 30 August 2011.
  5. Luat Công Nghe Thông Tin (Law on Information Technology), No 67/2006/QH11 (29 June 2006).
  6. Nghi Ðinh ve quan lý, cung cap, su dung dich vu internet và thông tin dien tu trên Internet (Decree on Managing, Providing, and Using Internet Services and Electronic Information on the Internet), No. 97/2008/NÐ-CP (28 August 2008).
  7. Thông Tu huong dan ve quan lý và su dung tài nguyên Internet (Circular Guiding Management and Use of Internet Resources), No 09/2008/TT-BTTTT (24 December 2008).
  8. Thông Tu quy dinh ve giai quyet tranh chap tên mien quoc gia Viet Nam ‘.vn’ (Circular Stipulating Settlement of Vietnamese .vn Domain Names), No 10/2008/TT-BTTTT (24 December 2008).
  9. Article 130.1.d, Luat So Huu Trí Tue (Law on Intellectual Property), No 50/2005/QH11 (29 November 2005). English translation: http://www.vietnamlaws.com/laws/Lw50na29Nov05IP.pdf.
  10. Luat Trong Tài Thuong Mai (Law on Commercial Arbitration), No 54-2010-QH12 (29 June 2010). English translation: http://www.vietnamlaws.com/laws/Lw54na17Jun10CommercialArbitration.pdf.
  11. Bo Luat Dân Su (Civil Code), No 33/2005/QH11 (14 June 2005).
  12. No 10/2008/TT-BTTTT
  13. ASEAN Project on the Protection of Intellectual Property Rights, Samsung Electronics Co, Ltd v Defendants Duong Hong Minh and the Viet Nam Design and Technology Transfer Network (VitechNet) [2010] http://www.ecap-project.org/sites/default/files/ip_case_law/VN_10-2010.pdf. 30 August 2011.