Trademark disputes are among the most complex and important legal issues in the field of intellectual property. This article analyzes the Kido lawsuit case study to provide detailed insight into the trademark dispute resolution process in Vietnamese courts.
Context of the Kido Lawsuit
The Kido lawsuit is one of the notable trademark disputes in the Vietnamese food industry. This dispute arose due to conflicting rights regarding the trademark use between the parties involved, leading to a lawsuit in court.
Before establishing and registering the Celano trademark in 2007, the Merino ice cream trademark belonged to KIDO Foods Co., Ltd (KIDO Foods) when the group acquired Wall’s Ice Cream in 2003. In June 2022, KIDO Foods transferred the ownership of the Celano ice cream trademark (which is under protection) to KIDO Group, and KIDO Group later had the Intellectual Property Department – Ministry of Science and Technology amend the trademark registration certificate related to this ice cream trademark.
In 2023, KIDO Group transferred 24% of KIDO Foods’ shares, reducing their ownership stake to 49%, thereby no longer controlling the company. By September 2024, Nutifood announced becoming the parent company of KIDO Foods (KDF) after completing the acquisition of 51% of the company’s shares.
In 2024, KIDO Foods continued to use and promote these brands without approval from KIDO Group, leading KIDO Group to file a lawsuit to protect its intellectual property rights. After reviewing the petition from KIDO Group, the People’s Court of Ho Chi Minh City decided to apply urgent interim measures against KIDO Foods. Accordingly, KIDO Foods was prohibited from using (including advertising, promoting, introducing…) the Celano trademark.
Causes of the Dispute
Trademark ownership conflict
- Control rights of Nutifood over KIDO Foods: Nutifood became the parent company and gained control over KIDO Foods. This means that Nutifood now has the right to decide on the business activities and operations of KIDO Foods.
- Ownership of the “Celano” brand: KIDO Group now owns the Celano ice cream brand, having acquired it from KIDO Foods. As a result, KIDO Foods may only use this brand under specific agreements or regulations set by KIDO Group.
- The conflict between usage rights and ownership rights: Although KIDO Foods still operates the “Celano” brand, the ownership of this brand belongs to KIDO Group. This creates a clear distinction between the right to use the trademark (if licensed) and the ownership rights (which belong to KIDO Group).
- Intellectual property rights violation: If KIDO Foods uses the “Celano” trademark in commercial activities without notifying or obtaining consent from KIDO Group, KIDO Group may consider this act a violation of intellectual property rights, especially if no contract or agreement licenses the trademark’s use.
Trademark registration and protection issues
- Businesses need to focus on registering trademark protection early in their operations. This not only protects their rights but also creates a competitive advantage in the market.
- The Merino and Celano brands were transferred entirely to KIDO Group’s intellectual property ownership at the end of 2022, according to the trademark registration certificates issued by the Director of the Intellectual Property Department.
- In M&A transactions during the due diligence process, the buyer must also conduct reviews of the intellectual property assets, including the trademarks.
Complaint Filing Process
2.1. Preparing Documents (Article 119a of the Intellectual Property Law, Clause 1 of Article 3 of Decree No. 124/2020/ND-CP, and Article 36 of Circular No. 23/2023/TT-BKHCN)
To begin the dispute resolution process, the parties need to prepare the complete documentation, including:
- Complaint form;
- A copy of the decision or notification being complained about, and a copy of the industrial property registration application that is the subject of that decision or notification, or documents indicating information about the above documents;
- A copy of the first-level complaint resolution decision (for second-level complaints);
- Evidence used to prove and clarify the complaint argument (which may be submitted within one month from the date of complaint submission).
- Power of attorney (if filing through a representative).
2.2. Complaint Procedure (Article 38 of Circular No. 23/2023)
Receipt of complaint:
Organizations or individuals submit one set of documents requesting dispute resolution to:
Complaint acceptance (Article 27 of the Complaint Law and Clause 1 of Article 119a of the Intellectual Property Law):
Within 10 days from the date of receipt of the complaint, the person handling the complaint must:
Issue a notice of non-acceptance if the complaint falls under circumstances not accepted, clearly stating the reason for rejection; or
Issue a notice of acceptance if the complaint is not in the non-acceptance category, stating the date of acceptance, determining search and/or assessment fees (if applicable), and setting a one-month deadline for the complainant to submit the payment.
Resolution of the complaint:
The person handling the complaint informs the concerned party of the content of the complaint and sets a one-month deadline from the notification date for them to provide feedback.
The concerned party has the right to provide information and evidence. The person handling the complaint will consider this information and evidence when resolving the complaint.
The person handling the complaint informs the concerned party of the content of their feedback and sets a two-month deadline from the notification date for the complainant to respond.
If no response is received by the end of the specified period, the complaint will be resolved based on the documents in the complaint.
Decision on the complaint resolution:
The person handling the complaint issues a decision on the resolution (Clause 2 of Article 31 of the Complaint Law).
Public announcement of the decision:
Publicized on the electronic portal of the complaint resolution agency within 15 days from the date of signing the decision.
Published in the Industrial Property Gazette within two months from the date of signing the decision.
For a more detailed understanding of the complaint resolution process related to industrial property, please refer to the National Public Service Portal: Procedures for resolving complaints related to industrial property.
Court Procedure for Litigation
The litigation process in court is carried out in the following stages:
3.1. Case Acceptance Stage
- Submit a lawsuit and litigation fees (Articles 189, 190 of the Civil Procedure Code): The plaintiff submits a lawsuit along with supporting documents to prove the legal validity of the claim and pays the litigation fees.
- The court examines the conditions for case acceptance (Articles 191-194 of the Civil Procedure Code): The court checks if the lawsuit meets all legal requirements, including jurisdiction, statute of limitations, and accompanying evidence.
- Notice of case acceptance (Articles 195, 196 of the Civil Procedure Code): If the lawsuit is valid, the court will notify the involved parties about the case acceptance and officially start the case resolution process.
3.2. Preparation for Trial Stage
- Collect additional evidence (Articles 208, 210, 212 of the Civil Procedure Code): The parties provide additional documents, evidence, or request the court to collect evidence from third parties to clarify the disputed issues.
- Mediation between the parties (Article 205 of the Civil Procedure Code): The court organizes mediation so that the parties can mutually settle the dispute without bringing the case to trial.
3.3. Court Decision on the Case
- The court decides to bring the case to trial (Article 220 of the Civil Procedure Code): After completing the preparation process and failing to mediate successfully, the court decides to move the case to the formal trial stage.
- The court announces the decision (Articles 266, 267 of the Civil Procedure Code): After the trial, the court will announce the final judgment based on the evidence, arguments, and legal provisions. This decision will clearly define the rights and obligations of the parties in the intellectual property dispute.
- Enforcement of the judgment (Article 482 of the Civil Procedure Code and the Enforcement Law): When the decision takes effect, the involved parties must fulfill the obligations determined by the court. If one party fails to comply, the enforcement agency will intervene.
Lessons Learned
The importance of registering trademark protection from the early stages:
- Legal objective: Registering trademark protection helps businesses establish legal intellectual property rights over their brand from the beginning of operations. This prevents future disputes over brand ownership and protects the company’s intellectual assets.
- Building brand reputation: A legally protected brand not only strengthens the company’s reputation but also builds trust among customers, partners, and investors.
- Preventing violations: When the trademark is protected, the business has legal rights to prevent violations such as unauthorized use or counterfeiting of the trademark.
The role of intellectual property assets in M&A transactions:
- Intellectual property assets are crucial in due diligence (DD): In mergers and acquisitions (M&A) transactions, the buyer must conduct thorough due diligence on the financial, legal, labor, and tax status of the seller. Intellectual property assets, especially the brand, are considered one of the key factors in evaluating the company’s value.
- Risks of not protecting the brand: If the brand is not registered or has ownership issues, the buyer may face legal risks such as disputes, claims, or loss of trademark usage rights after the transaction. This affects the value and benefits of the M&A deal.
- Impact on investment decisions: A clearly protected and legally recognized brand will increase the company’s value, while issues with intellectual property ownership may diminish the buyer’s confidence and cause the transaction to fail.
Conclusion
The Kido lawsuit is a typical case study of the trademark dispute resolution process in Vietnam. It highlights the importance of trademark protection and compliance with legal procedures.
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