IP Enforcement in China vs Vietnam: Courts or Administrative

A Chinese company’s brand has been registered first by a Vietnamese company in Vietnam — market entry now means ransom demands from the mark’s “owner”, or infringement suits — what to do? This is trademark squatting — the nightmare of thousands of Chinese brands: former agents, ex-distributors or professional “hunters” file first, then extort. This article analyses four legal weapons to reclaim the mark: negotiation, opposition, invalidation, and well-known-mark protection.

Why Chinese brands get squatted

Vietnam applies first-to-file — first filer wins, regardless of who used first or who truly owns the brand abroad. Yet many Chinese companies enter the market first and file later: selling through agents, advertising heavily, then thinking of registration — by which time the former agent or a “hunter” has already filed. Expensive lesson: trademark filing must come before all commercial activity, not after.

Four weapons to reclaim the mark

Weapon 1: Negotiated buyback — fast but costs money

If the squatter just wants money, buying the application/registration is usually fastest and cheapest (versus protracted litigation). But don’t overpay hastily — prepare the legal weapons below in parallel for leverage. Note: trademark assignments must be registered with the IP Office to bind third parties.

Weapon 2: Oppose the pending application — kill it early

If the squatter’s application is still under examination (no certificate yet), the true owner may file an opposition: proving true ownership and the applicant’s bad faith (knowingly filing another’s mark). Evidence: prior agency/distribution relationships, invoices, catalogs, advertising predating the squatter’s filing date.

Weapon 3: Invalidate the granted registration — when it’s late

If a certificate already issued to the squatter, the true owner may seek invalidation on the ground the registrant had no right to file (bad faith). Complex proceedings requiring proof of the registrant’s bad faith — prior commercial relationships (agency, distribution, cooperation talks) are golden evidence.

Weapon 4: Well-known marks — the “shield” needing no registration

Vietnamese IP law protects well-known marks without requiring Vietnamese registration. If the Chinese brand is sufficiently well-known (widely recognised in Vietnam through use and advertising — including cross-border advertising), it can be invoked to oppose or invalidate the squatted mark. The “well-known” proof threshold is high — use evidence, advertising, recognition surveys — but it’s the strongest weapon when available.

How squatters pick their targets — think like one to beat one

Squatters are not random; they run a business model. Where they hunt: Chinese brands newly advertising in Vietnam (trade fairs, e-commerce listings, social media) but not yet filed; brands whose Vietnamese distributors were recently changed; and brands famous in China but unknown to Vietnam’s IP Office examiners. Their tell-tale filings: applications covering suspiciously broad goods lists, filed by individuals or shell companies with no related business, often in batches across multiple Chinese brands at once. How to turn the tables: set up a trademark watch the moment Vietnam entry is contemplated — not after launch; file defensively in the classes squatters favour even before commercial use; and keep dated evidence of first use anywhere (Chinese registrations, export invoices to Vietnam, fair catalogues) because bad-faith invalidation lives or dies on the paper trail predating the squatter’s filing date. Most importantly, treat distributor contracts as anti-squatting instruments: an explicit no-filing clause plus a pre-signed assignment of any mark the distributor registers turns the former-agent squat — the most common variant — from a lawsuit into a paperwork exercise.

Anti-squatting — an early-warning system

Trademark watch services

Engage an IP firm to watch new Vietnamese trademark filings — when an identical/similar application appears, you’re alerted within days (instead of discovering it post-grant — too late). Cost: a few hundred USD/year — cheaper than one opposition/invalidation dozens of times over.

Defensive filings in related classes

Squatters often file in “odd” classes (you sell batteries, they file for… clothing) — then bargain (“pay me to withdraw this class”). Prevention: file defensively in expandable classes (even if not yet trading) — but don’t file “wildly” over-broad (fees + non-use cancellation risk).

On discovering squatting — “speed” decides

Within the first 30 days of discovery: gather evidence (squatter’s filing date, your prior-use proof), assess (pending or granted?), pick the weapon (oppose / negotiate buyback / invalidate). Don’t: “wait and see” — each passing month lets the squatter entrench (market goods, build de facto “rights”). Principle: anti-squatting is a speed race — the fast win.

IP enforcement — China vs Vietnam

China: dual tracks (specialised IP courts + strong administrative — fast, heavy penalties). Vietnam: courts (slow, thin precedent) + administrative (market surveillance — fast but light sanctions). Strategy: in Vietnam, administrative first (clearing fakes fast), courts later (claiming large damages); in China, parallel (administrative + courts). Never transplant Chinese experience to Vietnam (sanctions differ).

Cross-border enforcement coordination — fighting on two fronts

Fakes flow across the border (made in China, sold in Vietnam — or vice versa) — single-country action fails. Coordinate: (1) record IP with both customs (China GACC + Vietnam Customs — border seizures stop fakes before markets); (2) parallel actions (sue the manufacturer in China while raiding distributors in Vietnam — pressure both ends); (3) share evidence (Chinese judgments support Vietnamese administrative cases — and vice versa); (4) one counsel coordinating both sides (split counsel contradict each other). Budget cross-border enforcement as one campaign (not two cases) — divided efforts get divided results.

Anti-squatting checklist

Prevention (most important): (1) file in Vietnam the MOMENT market plans exist — before any sales or advertising; (2) register Chinese-character + Latin versions; (3) no-filing clauses against agents/distributors in every contract; (4) watch service for similar filings. When squatted: (5) identify the stage: pending (oppose) vs granted (invalidate); (6) gather evidence of prior relationships + pre-dating use/advertising; (7) weigh buyback (fast) vs legal action (thorough); (8) consider well-known-mark invocation if eligible; (9) register every assignment with the IP Office. Principle: in the first-to-file race, the first filer wins — never arrive late to your own brand.

Contact us

FLAT Law Firm advises Chinese investors in Vietnam across the full lifecycle: investment structuring, IRC/ERC procedures, tax, labour, intellectual property and dispute resolution. Contact us for advice tailored to your case.

This article has been quality-reviewed by the FLAW AI Legal Council