Intellectual property issues of the enterprises need to pay attention to when participating in e-commerce

Intellectual property issues of the enterprises need to pay attention to when participating in e-commerce

Section 1 – Domain Name Selection

Transcending the scale of the traditional business market, the purchase and sale of goods and the continuous development of the digital technology era have created a vibrant and powerful e-commerce environment as it is today. Besides the benefits that e-commerce brings such as easy access to customers, market expansion, cost savings, store, personnel, and many conveniences in payment transactions, e.t.c., e-commerce is an “open” business environment with many potential risks of infringing intellectual property rights. Therefore, the protection of intellectual property plays an essential role in the success of an e-commerce company.

1. Why need to pay attention to Intellectual Property when participating in e-commerce?

E-commerce is the buying and selling of products and services over electronic systems such as the Internet and computer networks. Realizing the advantages and opportunities of doing business on e-commerce platforms, many Vietnamese enterprises and individuals invest in e-commerce businesses to help trade and exchange activities more convenient. In addition to doing traditional business on e-commerce platforms such as Shopee, Lazada, Tiki, e.t.c., as previously, many business units use social networking sites such as Facebook, Instagram, Tiktok, e.t.c., or food delivery applications such as Grab food, Foody, Baemin, e.t.c., to create an account and start their business. For these individuals and e-commerce businesses, the brand or intellectual property is essential because the brand is the recognition and trust of customers – the fundamental factor of e-commerce business. Since in the online environment, customers are often located extremely far away and have little or no direct contact with the seller, the choice of the customer often comes from the popularity of the brand, the style of the product, the appearance of the product, and the reputation of the enterprise in the market. In particular, E-commerce or the internet creates a global business environment, and the competition is no less fierce, the protection of intellectual property rights in e-commerce is of great significance because intellectual properties can be stolen or copied across time and space, and businesses can be destroyable.

2. Intellectual property issues related to the selection and registration of domain names?

In e-commerce activities, domain names become the principal “identification tool” of your business and become in conflict with trademarks. Therefore, when choosing and registering a domain name, enterprises must pay attention to several issues to avoid disputes related to intellectual property and can best protect their intellectual property as follows:

  • As an identification tool in the online world, enterprises should choose a domain name matching with or similar to their business name or product name. In addition, if the enterprise owns a well-known trademark, it is also appropriate to use the trademark or a distinguishing element of the mark as a domain name. Choosing a domain name according to this method will help the domain name have a direct connection with the business or the products and services the enterprise is providing will help customers easily recognize and remember.
  • The domain name chosen should be as distinctive as the company’s trademark. In the process of e-commerce activities, if enterprises choose a commonly used domain name such as Good Law, Arabica Coffee, e.t.c., they will have difficulties creating their brand or reputation, the uniqueness of the enterprise in the field. Besides, with popular domain names, enterprises will hard prevent other businesses from using this sign in their trademark.
  • The domain name selected should not be another company trademark or a well-known trademark. According to substantive law, individuals or organizations can choose a domain name for registration, and the conditions for domain name registration do not stipulate that the domain name is not identical or similar to a registered or protected trademark. However, according to the regulations of most countries, the registration and use of a domain name that is similar to another company’s trademark are considered an infringement of that mark. In Vietnam, the registration and use of domain names identical/similar to a protected trademark is an act of unfair competition under the provisions of the Intellectual Property Law.
  • Avoid including confusing elements in the domain name as the names of landscapes, the names of famous people, the scientific names of cosmetic drugs, the names of national organizations, and especially the trade names of the businesses of another profession.
  • Although a domain name can be up to 67 characters, a domain name which is short, easy to pronounce, easy to remember, and easy to type when accessing is still the best option.

Two identical marks can coexist and own by different companies if they register for distinct classes of goods or services in the same country, except for a well-known trademark. However, domain names create an exclusivity for the domain owner that has nothing to do with the goods or services the website offers for sale. Domain names are registered on the first-to-file principle, so when choosing and registering a name to conduct e-commerce activities, enterprises need to pay attention to the content to avoid losing time and development costs. On the contrary, if the enterprises discover that another enterprise has registered or used a domain name that is similar or confusingly similar to its trademark, the enterprise may request the competent authority to revoke the granted domain name according to the uniform domain name dispute resolution policy (UDRP) on the WIPO website at http://arbiter.wipo.int/domains if the domain name is an international domain name (.com, .net, ..). In case the infringing domain name is a national domain name (.vn), the enterprises can request the competent authorities to handle acts of unfair competition in accordance with the provisions of the Intellectual Property Law and Information Technology Law in Vietnam.

Section 2 – Design and operation website

1. Notes when designing and building a website

Website design is the construction of website structure (layout), design of the function, form, and content of the website. When performing the design, the design company (in case the business hires a design unit) and the enterprise can combine, refer to the layouts, and parts of other websites or copy the links, download images, and videos available online, and put them on my website. Just because all the music, pictures, videos, and audio… are posted on the Internet does not mean that they are in the public domain. The right holder may infringe intellectual property rights by downloading and using objects without the author’s permission. Practice shows that businesses often do not own 100% of the content accessible on their website because in most cases, the construction and development of websites often use other people’s content. Therefore, for the content and design when putting on the website, businesses should note the following points:

  • Enterprises should only put information under their ownership on the website. If the enterprises want to use other information, it needs the owner’s permission. Permission may be in writing (also known as a Trademark license agreement, license or agreement) or otherwise to use images, video, music, sound, artwork, or any software owned by someone else. Businesses may have to pay to be allowed to use the above objects.
  • When an enterprise intends to use databases, open source software, or technical tools on the Internet which is licensed from another company, please carefully check the terms for using open source code and the conditions for who owns the system, whether you have the right to develop or modify the system. As for the modified development or system upgrade, who will be the owners of these new systems? To best ensure the rights and obligations of the enterprise in such situations, the enterprise should turn to a qualified lawyer for specific examination and advice.
  • If the enterprise signs a contract with the design company to design, and develop the website or any other website-related issue, the enterprise needs to have an agreement that stipulates the terms of information security. Information and intellectual property rights arising from their work are owned by the enterprise. A privacy clause should also be added to the design contract to ensure that the design business does not disclose intellectual property information it may obtain during the construction of the website.
  • According to the Intellectual Property Law provisions, the original content displayed on the website has been protected by copyright. However, businesses also need to insert a copyright notice on their website stating that the content, format, and interface on their website are protected by intellectual property rights and cannot be used by anyone without the permission of the business. At the same time, businesses can leave contact information in case a third party needs to use some information on the website.
  • In addition, when performing maintenance, updating, troubleshooting, or repairing the website, the business also needs the consent of the right owner for the content that requires the permission of a third party on the website.

2. Register for the protection of intellectual property rights for the website

According to the Law on Information Technology provisions, an electronic information page (Website) is an information page or a collection of information pages in the network environment to serve the provision and exchange of information. Websites can register for copyright protection (copyright) in two different types of works: computer programs or applied artworks:

  • The website is protected as a computer program that is a web page frame. A computer program is a collection of paths that can only be displayed as commands, code, diagrams, or any other format that, when attached to computer-readable media, is capable of making requests to the computer to perform a task or to get a specific result. For this type of work, the owner will get the source code to build the website and its functions.
  • The website is protected as an applied aesthetic work. For works of this type, businesses will be protected by the entire website interface including design images, layout, and arrangement of images and videos.

In addition, the business will register the website’s domain name and trademark it as a “site name”.

Thus, when building a website to develop, businesses need to note which content of the website is theirs, what rights can be used, and what content is not theirs that they do not have the right to use. To have a perfect website, businesses require maximum protection of their legitimate rights and interests, without infringing intellectual property rights thus affecting the rights and interests of other parties.

Section 3 – Trade name and trademark

In the intellectual property assets of enterprises, trademarks and trade names are vital industrial property assets. In e-commerce, trade names and trademarks are essential assets that distinguish the products and services offered by one company from another. Accordingly, how to protect trademarks and trade names when conducting e-commerce, in the series of articles on intellectual property in e-commerce, this article will give the necessary notes for trade names and trademarks when participating in e-commerce.

1. The differences between trade name and trademark

Trade names or trademarks are two terms mentioned in many business activities and articles on intellectual property. To help businesses understand these two objects, the author offers a table comparing trade names and trademarks as follows:

Criteria Trademark Trade name
Definition Trademark means any sign used to distinguish goods or services of different organizations or individuals. Trade name means the designation of an organization or individual used in business activities in order to distinguish the business entity bearing such trade name from other business entities in the same business sector and area.
Subject Goods, services of organizations, individuals Business entities
Function To distinguish the goods and services of different organizations and individuals To distinguish the business entity bearing such trade name from other business entities in the same business sector and area.
Grounds for the establishment of intellectual property rights Industrial property rights to a trademark shall be established on the basis of a decision of the competent State authority to grant a protection title or the recognition of international registration pursuant to an international treaty of which the Socialist Republic of Vietnam is a member. (except well known trade marks) Industrial property rights to a trade name shall be established on the basis of lawful use thereof.
Signs It is a visible sign in the form of letters, words, drawings, or images including holograms, or a combination thereof and sound Only letters and numbers can be pronounced
Conditions for protection It is a visible sign in the form of letters, words, drawings, or images including holograms, or a combination thereof, represented in one or more colors, or sound and

It is capable of distinguishing the goods or services of the mark owner from those of other subjects

A trade name shall be protected when it is capable of distinguishing the business entity bearing it from other business entities operating in the same business sector and locality.

A trade name shall be deemed to be distinctive when it satisfies the following conditions:

·       It consists of a proper name, except where the proper name was widely known by use.

·       It is not identical with or confusingly similar to a trading name that was used earlier by another person in the same business sector and locality.

·       It is not identical with or confusingly similar to another person’s mark or a geographical indication that was protected before the date of use of such trade name.

Quantity A business entity can register many trademarks. A business entity can have only one trade name.
Validity of protection titles A trademark registration certificate shall be valid from the grant date until the end of ten years after the date of application and may be renewed for many consecutive terms, each of ten years.
Indefinite term protection.
Trade names are protected until they are no longer legally used in business activities.

 

Assignment of industrial property rights Trademark ownership can be transferred without transferring the entire business and business operations. Rights to trade names may only be assigned together with the transfer of the entire business establishment and business activities under such trade name.
Licensing of Industrial Property Rights The right to use the trademark can be transferred under the contract. The right to use geographical indications or trade names shall not be licensable.
The burden of proof in a dispute In a dispute, the owner is relieved of the burden of proof based on the protection title granted by the National Office of Intellectual Property of Viet Nam. In a dispute, the owner bears the burden of proving the owner’s rights to the trade name.

2. When conducting e-commerce activities, it is advisable to protect trademarks or trade names, which are easier to protect

Protection of trade names or trademarks is essential because both objects are intellectual property assets that contribute to the value of the business. However, due to the different nature and scope of protection as well as the protection mechanism, in the author’s opinion, trademark protection will be simpler and more beneficial than the trade name because of the following reasons:

  • Trade names are automatically protected through use with the scope of protection only in one business area, and the business area means “the geographical area where the business entity has partners, customers, or reputation.” E-commerce activity refers to buying and selling on the Internet, and it usually does not generate a sales contract, so it is often difficult to prove the business area to protect the trade name. Unlike trade names, trademarks will be protected through registration with the National Office of Intellectual Property, throughout the entire territory of Vietnam and other countries through registration with the National Office of Intellectual Property or Intellectual Property offices (or through intermediary organizations are World Intellectual Property Organization) and internationally trademark registration even though the business of the enterprise has not yet developed in foreign.
  • Signs protected as trademarks are diverse and can be combined with images and other elements to create unique visuals, making it easier for consumers and customers to remember and identify, one of the essential factors in e-commerce.
  • In case many enterprises have the same trade name as the trademark when there is a violation of intellectual property rights for the above sign, the protection of the trademark (which has been granted a protection title) will help the business reduce the burden of proof when dealing with infringement of intellectual property rights. On the contrary, if the enterprise does not register for trademark protection but only applies the trade name protection mechanism during its operation, it will take a long time for enterprises to collect and store evidence to prove the use of the trade name.
  • An enterprise can do business in multiple fields, products, and services, and the advantage of trademark protection is that a business entity can register for the protection of trademarks for many suitable areas as required.
  • For long-term enterprises, trademark protection will help them save more costs in managing intellectual property when applying measures to store records and documents proving the use of the trade name.
  • Regarding the right to license, and assign industrial property rights, trademark protection also shows superior advantages compared to trade names.

Although trademark protection offers advantages over trade names, if there is enough finance and human resources, enterprises should thoroughly implement measures to protect both trademarks, trade names, and all other intellectual property of the enterprise.

Finally, intellectual property is an essential element of e-commerce. As soon as information about products and services is posted on the website and disclosed in the country, any domestic or foreign third party can use the same trade name and trademark to register for their products in their own country. It can be detrimental to businesses when exporting goods to that country. Therefore, when implementing e-commerce, enterprises need to learn, research, and prepare protection and defense plans for their intellectual property assets. 

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