Small- and medium-sized businesses account for over 90 per cent of the total number of businesses in Viet Nam and play a significant role in economic growth and social development.

However, in a highly competitive market, these businesses are facing a number of challenges associated with the small scale of production and limited resources to promote trademarks and gain consumers confidence. Yet, some firms are taking advantage of intellectual property tools, such as collective marks, to increase their competitive edge.

Under Viet Nam's Law on Intellectual Property, a collective mark is defined as "a trademark jointly used by a collective of individuals, legal persons or any entities, in which each member uses that mark independently in accordance with the common rules laid down by the collective."

Broadly defined by WIPO, a collective mark is a sign to distinguish the geographical origin, mode of production, quality or other common characteristics of goods or services of different enterprises that simultaneously use the collective mark under control of its owner. The owner may be any trade or professional organisation of manufacturers, suppliers, accountants, or other institutions or co-operatives. In exchange for using the mark, members must operate under common regulations and comply with certain standards or special characteristics governed by those organisations.

The function of collective marks is to inform the public about particular features of the products/services for which the collective mark is used. Bat Trang ceramics, Hoi An lanterns, Ly Son garlic, Phuoc Kieu bronze, Thai Nguyen tea, and Phu Yen fish sauce are various examples of collective marks.

Collective marks differ from trademarks in that they can be used by a variety of traders rather than a single owner. It is also to be distinguished from a certification mark which can be used by anyone who complies with certain standards certified by particular organisations. Collective marks are also distinguishable from geographic indicators as they are applicable to any group organised either geographically or on the basis of industrial sectors.

A collective mark is of great assistance in many ways. Above all, a collective mark represents a useful instrument for small- and medium-sized businesses to overcome challenges associated with small sccale and isolation to gain a reputation in the marketplace. While one firm may find it hard to gain consumer recognition for its mark, a group of businesses joining together under a shared mark can create great co-operative strength and cure the problem of isolation. Working collectively, they can benefit from the economy of scale and broader brand recognition.

Collective marks can also be used together with the producer's individual trademark, allowing firms to differentiate their products from those of competitors while simultaneously benefiting from consumer confidence in products offered under the collective mark.

Collective marks can also be a cost-saving device by allowing a joint marketing campaign promoting the special characteristics of a given geographical area or certain features of products and services offered by an association. Bat Trang ceramics, for instance, are well-known thanks to long tradition of excellence. Making full use of this comparative edge, small businesses and ceramic makers have built a collective mark, allowing them to share advertising costs.

Lastly, collective marks may foster alliances among businesses, allowing them to take fuller advantage of common resources and giving them effective protection against unfair competition and illegal copying of products. These businesses can together employ the ‘special' mark as an effective shorthand identifier of their products or services. — VNS

By Vu Thi Thao, IP Max Law Firm

Local time

Thursday, 23 March 2023

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