VIETNAM: Country Jolted Over Trademark Debacle
HO CHI MINH CITY -- Socialist Vietnam is starting to learn the ways of capitalism as its products enter the global market.
Take the case of Vietnam's prized rice pancakes, whose name is synonymous with Ngoc Linh, the family business that makes the most famous brand.
'Banh re', as the pancakes are known in Vietnamese, enjoy an enthusiastic following outside Vietnam too, and particularly in Japan.
It came as a rude shock then, to the Ngoc Linh family, when they recently learnt that their pancakes were banned from entering Japan. Shock turned to confusion when the family discovered that 'Ngoc Linh' had been registered as a trademark in Japan.
The family had not registered it, counting on its patrons' goodwill as it had done for decades. So who had?
"When we heard that our trademark had been usurped in Japan our consternation and shame was great," said Van Thanh, a family member. It turns out that several months ago, a group of Japanese tourists visited the Ngoc Linh workshop and asked family members for permission to videotape their production activities.
Gracious hosts that the family members are, they not only let the tourists film their production processes but also offered them samples of their rice paste, the unique mixture that gives Ngoc Linh 'banh re' its singular texture and flavour.
Like many other family-based enterprises in Vietnam where many capitalist enterprises are flourishing, the Ngoc Linh clan did not register its trademark. In the opinion of family members, since they have used it for so many years, and have seen it recognized by patrons and the market, the trademark is their own by default.
Unfortunately, intellectual property rights regimes deem otherwise, as they have to their dismay discovered from the Japan fiasco.
Ngoc Linh 'banh re' has been a recent sufferer, but other old favourites found in Vietnam's markets - Phu Quoc fish sauce, Buon Ma Thuot coffee, Hoa Loc mangoes, Hung Yen longan and Nang Huong rice - are in as much danger, as Vietnam Chamber of Commerce and Industry (VCCI) deputy chairman Vu Tien Loc told a workshop on trademarks recently in Ho Chi Minh City.
Famous they may be, but without intellectual property rights protection they are sitting ducks for opportunistic elements abroad. Welcome to the neo-liberal global marketplace.
"Not many Vietnamese enterprises understand the need to register their trademarks abroad," said Pham Dinh Chuong, head of the Industrial Property Department under the Ministry of Science, Technology and Environment. "That is the reason why they have trouble entering the world market. For example, tobacco company Vinataba saw its trademark usurped in Cambodia and 11 other countries by PT Putra Staba Industri from Indonesia."
Vinataba has filed a counter-claim, but so far only socialist Cambodia has responded. The tobacco company said that Cambodia's Department of Intellectual Property has stated that the Ministry of Trade of Cambodia has annulled the Indonesian group's registration.
Likewise, Trung Nguyen, a producer of processed coffee, also saw its trademark grabbed by foreign companies. But it fought back to register its trademark abroad, and also franchise 10 outlets in Japan, China, the United States and Singapore.
These however are the exceptions.
The saga of Phu Quoc Fish Sauce is rather more common. A popular sauce whose origin lies in the Phu Quoc Island, it had been prevented from entering the U.S. market, along with other Vietnamese goods, by an embargo. Seizing upon the popularity of the sauce, some Thai business registered the trademark and exported the sauce to the United States and the European Union.
This added insult to injury, for Phu Quoc was a much-sought-after sauce among the Vietnamese communities living in France, and then among the hundreds of thousands of 'boat people' who had settled abroad, particularly in Australia, Canada and the United States To date however, efforts to regain the trademark rights have come to naught.
Food multinational Unilever has bought the right to use 'Phu Quoc' on its Knorr fish sauce brand, but that is scarce compensation for the global loss. "In the case of stolen trademarks such as Phu Quoc fish sauce, the state should intervene to take back our trademark," said VCCI vice chairwoman Pham Chi Lan.
However, the reverses suffered by Ngoc Linh family and the makers of Phu Quoc fish sauce are leading to a growing recognition - from private enterprise and government authorities alike - of the need to safeguard Vietnam's intellectual property rights.
The Ministry of Trade recently decided to invest $49 million in assisting large companies in the foods, beverage, footwear, garment and textile, seafood, art, craft and furniture industries to build their trademarks globally.
The criteria for qualifying for state assistance is for the moment geared to companies with an annual export turnover of over $500,000. The products of these companies are to be branded with a national product label - "Vietnam Value Inside" - which is to be projected as a symbol of quality Vietnamese goods.
"Trademarks are not only the greatest property of an enterprise but also the country's possessions and pride," said the VCCI's Lan.
Indeed, possessions and pride, if properly branded and protected, can command a significant premium. From March 2002 to February 2003, Vietnam was the largest producer of coffee behind Brazil and ahead of Colombia, according to data from the International Coffee Organization.
Yet on average a tonne of exported Vietnamese coffee fetches a price of around $800, whereas a tonne of Brazilian coffee will sell for up to $850, even though - as the VCCI's Loc claimed - the quality of both is comparable.
A repeat of what happened to Ngoc Linh may be prevented, in the view of the authorities, but only if Vietnamese companies "invest actively to develop their own images," Lan advises.
- 110 Trade Justice