Intellectual property rights holders pursuing legal actions in Vietnam have faced various challenges related to document formality in recent years. For example, in two different disputes at the Ho Chi Minh City Court, we have seen the judge request the claimants to re-prepare the civil dossier due to a lack of documentation proving the authorization of the signer—despite the fact that the cases had been ongoing for long time.
Meanwhile, many domain names have been unable to be registered and transferred in recent months. Third-party representatives cannot handle the work as they normally would, as Vietnam’s domain name authority has required all documents to be signed by the domain name holders themselves, instead of the law firms representing them.
Such demands have created unnecessary complexities and obstacles for IP holders seeking to protect their rights in Vietnam.
Legal Formalities in the Court System
Vietnam’s judicial landscape presents unique hurdles for IP holders to enforce their rights. One significant challenge is the requirement for the claimant’s legal representative (typically the CEO/president), as explicitly displayed on the company’s business license, to sign all documents related to a lawsuit.
This requirement clashes with the operational practices of many foreign companies, where multiple individuals may have the authority to represent the company. It is extremely impractical, especially in a large multinational conglomerate, for the CEO/president to personally execute all documents and transactions. Instead, authorized staff within these organizations, such as department heads or general counsel, typically handle these tasks. In this situation, Vietnamese courts often demand additional documentation to prove the officers’ authority, necessitating specific authorization documents that may not always be readily available. The courts sometimes remain unconvinced by declarations from the CEO/president affirming the authorization of these officers, and despite such assurances, they may still demand tangible proof of authorization, adding layers of complexity for IP holders.
Further, the court may insist on the company affixing its seal to these lawsuit-related documents. This requirement is impossible to meet for many foreign companies, which are commonly not required to have a seal under their home country’s law.
In addition, Vietnamese courts always have many requirements related to the company’s business license, an important document that is granted to each company established in Vietnam that shows, among other details, information on the company’s legal representation. However, depending on the country of establishment, many foreign companies do not have business licenses similar to those issued in Vietnam. Hence, the Vietnamese court cannot rely on Vietnamese law to assess the legal status of a foreign company.
Consequently, IP holders find themselves navigating a delicate balance between the legal formalities of Vietnam’s court system and the operational realities of multinational corporations. This conflict not only complicates the litigation process but also results in delays in resolving IP disputes.
Interactions with Other Authorities
Beyond the court system, IP holders encounter further challenges when dealing with regulatory bodies such as the Vietnam Internet Network Information Center (VNNIC) and the Copyright Office of Vietnam (COV). VNNIC, responsible for managing domain names ending in “.vn” in Vietnam, stipulates stringent requirements for domain name transfer and registration. One difficult requirement is the demand for a company seal and proof of signatory incumbency. VNNIC also requires foreign companies to directly execute all registration documents, prohibiting third-party representatives such as law firms from handling this matter, even when they have power of attorney. These requirements not only complicate the registration process but also introduce delays in enforcing judgments related to domain name disputes. It is extremely difficult for foreign companies to sign documents directly and deliver them to Vietnam.
The COV further adds to the administrative burden faced by IP holders seeking to safeguard their creative works. For example, for copyright recordation, the COV requires information on the author to be provided, such as a passport, or a signed declaration of authorship. However, in practice, when a company wants to record the copyright of a work created by their staff and they are no longer working at the company, it can be nearly impossible to obtain such a declaration. Needless to say, this COV requirement is very difficult to implement in practice.
Recommendations
The increasing burden of document formality in Vietnam warrants thoughtful consideration and reform. While acknowledging the importance of legal formalities, there is a need for greater flexibility within the legal framework to accommodate the diverse structures and practices of foreign companies. Simple steps like accepting signed documents without seals or allowing execution by explicitly authorized persons who are not the CEO/president would greatly reduce administrative costs (in time and money) for both foreign and domestic companies, with only a trivial increase (if any) in the risk of fraud or deceit.
Addressing the document formality challenges faced by IP holders in Vietnam requires a balanced approach that acknowledges the importance of legal requirements while advocating for practical solutions to streamline processes and reduce administrative burdens. By embracing flexibility and dialogue, Vietnam can create a more conducive environment for innovation, creativity, and the effective enforcement of intellectual property rights, benefiting both local and international stakeholders.
This article first appeared in Managing Intellectual Property.
