Identifier | Created | Classification | Origin |
---|---|---|---|
04HANOI406 | 2004-02-13 09:59:00 | UNCLASSIFIED | Embassy Hanoi |
This record is a partial extract of the original cable. The full text of the original cable is not available. |
UNCLAS SECTION 01 OF 02 HANOI 000406 |
1. SUMMARY: In November 2003, the Ministry of Trade's Market Management Bureau (MMB), in cooperation with Nike's Brand Protection Specialist, raided 21 private sport shops and a state-owned knitwear factory, confiscating more than 1,200 counterfeit items. Two months later, the MMB destroyed all of the goods it had confiscated. While the number of goods destroyed represents only a fraction of the total number of counterfeit Nike products available throughout Vietnam, Nike representatives termed the raids a victory. Building on this successful operation, Nike is working to formalize future cooperation with the MMB on IPR enforcement in Vietnam. End Summary. 2. On October 1, Nike Vietnam formally requested the MMB raid shops in Hanoi that sell counterfeit Nike products. After a short consultation with other GVN IPR agencies, the MMB's deputy director, Mr. Vuong Tri Dung issued a decision to perform the raids. On October 7, a team of MMB inspectors, in conjunction with Nike's Brand Protection Specialist, raided 21 private sport shops and the state- owned Hanoi Knitwear Factory, confiscating 229 pairs of shoes, 244 shirts, 558 pairs of socks, 32 pairs of shorts, 16 hats and six kilograms of Nike labels. All of the shops were forced to remove Nike advertisement boards and commit not to violate Nike's trademark in the future. 3. On January 9 MMB's Mr. Dung and representatives from the Economic Police, (Note: Another IPR enforcement agency, under the Ministry of Public Security. End note.) the People's Procuracy, and the Finance Department of Hanoi, supervised the destruction of all of the seized products. This is the first time that the GVN has destroyed confiscated counterfeit Nike products. In the past, infringers were simply required to remove the infringing labels or signs. In its news release, Nike expressed its appreciation for the MMB's decisive actions. MMB did not, however, levy any fines against the companies that were raided. MMB told econ assistant that fines of between VND 20 million and VND 100 million (USD 1275 to USD 6375) will be levied only if any of the stores violate Nike's trademark again. 4. Since September 2003, Nike has made it a priority to develop a strong cooperative relationship with the MMB and credits the success of these raids to its ongoing efforts. In early October, Nike organized a two-day training session for ten MMB officials on how to identify counterfeit goods. Nike also provided MMB officials with information on Vietnam's IPR commitments in the U.S. Vietnam Bilateral Trade Agreement (BTA) and how IPR is related to Vietnam's WTO accession. Basis for Future Cooperation -------------------------- 5. Nike has had a representative office in Ho Chi Minh City since 1995. In 2003, Nike exported about USD 550 million worth of shoes and USD 70 million worth of garments from Vietnam. All of Nike's production is for export. Only 4 retailers in Hanoi and 6 shops in Ho Chi Minh City are licensed to distribute Nike products and all merchandise for legitimate sale in Vietnam is imported. Nike takes stringent methods to prevent theft of its trademark - including destroying all remains and "seconds." Despite these efforts, Nike faces rampant infringement of its trademark throughout Vietnam. Counterfeit products are widely available in all major cities. Additionally, according to local Nike reps, some counterfeit products may be exported to neighboring countries including Cambodia and Laos. 6. With the goal of building on the success of these raids, Nike is now working with the MMB to draft a proposal on cooperation. Under the terms of the proposal, the MMB will be responsible for conducting a specific number of raids per year on a regular basis. At the same time, Nike will establish a fund for those activities and provide more training for MMB officials. The MMB expects to conclude the agreement next week. Moreover, the Ministry of Trade has suggested using the MMB's cooperation agreement as a model document for other provinces and cities' Market Management Bureaus. 7. Comment: Nike has a considerable investment in Vietnam and is working hard to establish good cooperation with the GVN on IPR issues. Although Nike and the GVN have a long way to go to ensure full protect of Nike's trademark, this raid and the efforts to conclude a cooperation agreement are a good first step. The raids also demonstrate that it is possible for IPR-dependant industries to establish cooperative relationships with the GVN on IPR enforcement. Despite being plagued by widespread counterfeit products, Nike remains upbeat about its operations in Vietnam. 8. Comment continued: The lack of punitive fines in these cases is disappointing. The GVN remains reluctant to levy fines large enough to deter future infringement. Mission will continue to monitor GVN IPR enforcement efforts and encourage the GVN to take stronger measures against violators. BURGHARDT |