Intellectual Property Protection: Outcome under Expectations?

Piracy, pirated product import and knock-offs are coming under more sophisticated forms, causing numerous difficulties and challenges to customs authorities in particular and intellectual property (IP) rights enforcement forces in general. Although customs forces have made an effort to put a break on this evil, the outcome fails to meet expectations.

 

Due to a wide price and profit margin between genuine products and knock-offs, many take advantage of easy customs procedures to bring unbranded goods into Vietnam and then stick faked famous brands on them to sell to the market.

 

Nguyen Van Thuy, Head of IP Rights Protection Team under the Anti-smuggling Division, General Department of Customs, said: Knock-offs are now counterfeited more sophisticatedly from quality to style and industrial design. Even, it is very difficult for specialists to identify with naked eyes. Counterfeiters and pirates use many tricks too hard for customs authorities to break down. Specifically, they place orders and import unbranded Chinese goods into Vietnam and then stick customer-trusted brands before carrying to the market. They also import components from, assemble them in Vietnam, and put on new brands. They make most use of import and export modes to achieve their purposes like temporary import for re-export, temporarily export for re-import, cross-border smuggling, goods in transit, goods imported from and exported to bonded warehouses and falsified customs declaration. They also camouflage counterfeited goods with genuine ones.

 

Mr Thuy said the Ministry of Finance issued the Circular No. 44/2011/TT- BTC to guide activities to prevent counterfeits and protect IP rights to protect legitimate rights and interests of companies. This ruling came into effect in May 2011. However, according to market watchdogs, the outcome fails to come up with expectations because of poor coordination from enterprises.

 

Many companies lack knowledge of IP rights and they usually send inaccurate protection contents to authorities. This imperceptibly affects protected rights and interests of other companies. Some even think IP rights protection is the responsibility of customs authorities. In many cases, customs authorities detect counterfeits and notify companies for coordination in settling the case but such companies show little interest and care in protecting their own legitimate IP rights. To date, the customs sector has received and accepted IP monitoring at border gates for nearly 230 IP rights owners (brand, industrial design and geographic indicators). In the year to date, the sector has received just 44 applications for IP monitoring. Moreover, legal procedures for settling counterfeiting are complex and cumbersome.

 

According to the laws, after customs authorities examine and seize goods carrying signs of counterfeiting and IP rights violation, they will define the degree of violations of such goods. The settlement decision will be made after they show evidence to the status of seized goods: fake or real.

 

According to Quang Ninh Customs Office, in most cases, when seized goods have signs of counterfeiting or IP rights violation, authorities must base on examination results with registered IP rights owners. At present, a large volume of Honda, Castrol and Yamaha lubricants is illegally imported through Mong Cai Border Gate. As this commodity contains dangerous substances, it must be treated by specialised facilities.

 

However, IP rights owners usually lack care for treating violations and they only show superficial coordination. Meanwhile, Quang Ninh province does not have any qualified facilities to treat such commodity. Hence, to treat faked lubricants, Quang Ninh Customs Department has to sign contracts to hire a Haiphong City-located facility to destroy the faked goods. As a result, this takes customs authorities more costs to finish the job.

 

According to Mr Nguyen Van Thuy, customs authorities have to spend a lot of money (e.g. buying information, transport fees, maintenance, examination, destruction, etc.) and effort (e.g. patrol, espionage, etc.) to discover a big ring of counterfeiters. However, confiscated goods are unsellable. Indeed, without support of IP rights owners, customs authorities are facing a lot of troubles in exercising their duty because of limited financial sources.

 

This also limits the driving force and working efficiency.