Last week, “Buddha Bar & Grill” bar in District 2, Ho Chi Minh City suddenly became the“spotlight” on online news and social networks following an incident relating to an airline pilot, who was recently tested positive to COVID-19 and believed to have infected dozens of other guests at the bar on the of his present.
The incident led to several controversial articles expressing opinions about the bar’s name, for example, Tuoi Tre newspaper on March 25th, 2020 had posted an article from an angry reader “How could you name a bar after “Buddha”; Some other online newspapers (for example: “News.zing.vn”) cited a statement of an official of District 2:“This bar registered its business and displayed signboards under different names, if registered as Buddha, it would not have been permitted for sure because of religious reasons”!
In this article, we shall not discuss about the contagious event or the issue “This bar registers one way, named another”, but only give analysis's, professional opinions and legal basis in term of rights in naming the enterprise, trade names in the business activities of owner under the law of Vietnam.
FIRSTLY, REGARDING THE “BUDDHA” NAME
According to the definition in Cambridge Dictionary, Buddha is the name of a religious leader who lived in India about 2500 years ago, whose teachings led to the development of Buddhism. Some Vietnamese dictionaries define briefly that Buddha is “Đức Phật” or “Phật”, hence, the meaning of this word in Vietnamese concerning a religion, which is Buddhism.
ARE THERE ANY PROVISIONS OF THE LAW PROHIBITING THE REGISTRATION AND USE OF THE NAME "BUDDHA" IN NAMING RELATED TO THE ELEMENTS OF BUSINESS IDENTIFICATION?
In accordance with Vietnamese law, external display signs for distinguishing between business entities including (i) Name of enterprise; (ii) Trade name; sign to distinguish the goods and services of one entity from another entity is (iii) Trademark. Enterprise’s name is regulated by the Law on Enterprises 2014 and other guidelines. The trade names and trademarks are regulated by the Intellectual Property Law 2005 (supplemented, amended in 2009 and 2019) and other guidelines (hereinafter referred to as “IP Law”)
Names of enterprises
Means the name which is recognized on the Enterprise Registration Certificate upon establishment. According to the provisions of Law on Enterprises, name of an enterprise consists of two main components: type of enterprise (for example, sole proprietorship, limited liability company, joint stock company or partnership) and specific name. The purpose of "specific name" is to show creativity and distinctive impression to help distinguish businesses from one another.
The Law on Enterprises 2014 stipulates prohibitions in naming enterprises in Article 39
“1. Using names which are identical or confusingly similar to the name of a registered enterprise.
2. Using the name of regulatory bodies, the armed forces, political organizations, socio-political organizations, socio-political-professional organizations, social organizations or socio-professional organizations as the whole or part of the enterprise’s specific name, unless otherwise permitted by such agency, force or organization.
3. Using words, phrases and symbols which contravene national historical traditions, culture, ethics and fine customs.”
One of the points that can be debated about the name of Buddha Bar is that the use of the word "Buddha" is a violation of the prohibition on usage of words and symbols under Clause 3, Article 39 of Law on Enterprises 2014. According to the author's viewpoint, there is no solid legal basis for the above argument because the semantics of "historical traditions, culture, ethics and customs" are not tied to religious factors:
- Historical tradition is a compound noun including the noun "traditional" and the adjective "historical". According to the Vietnamese dictionary of the Institute of Linguistics published in 2003, "tradition" is a habit that has been formed for a long time in lifestyle and mindset, passed down from generation to generation; "History" means belong to the process of passed occurence, development till perish of a certain phenomena or thing. Thus, historical traditions are understood as habits, ways of thinking, behaviours, lifestyles in which their formation and development process associated with the history of the nation.
- Culture, ethics, fine customs: According to the Vietnamese dictionary of the Institute of Linguistics published in 2003, "Culture" is a general speech of material and spiritual values created by humans throughout the course of history; "Ethics" are the standards and principles recognized by the public, prescribing human behaviors and relationships to each other and to society; "fine customs" are good habits and practices that have been ingrained in social life, recognized and followed by the people. In general, the above phrases are understood as all acts, moral conceptions, good and moral lifestyles that were formed in the long history of a nation, stabilized into order for hundreds of years, then socially recognized, educated and handed down from generation to generation.
Both of the above factors have the common feature of being formed and widely acknowledged in society for a long time, without classification or party discrimination and especially without any mentioning of religious factors. Therefore, the writer's opinion is that if an enterprise uses the word "Buddha" to name its business, such naming shall not violate the prohibitions of the law.
Trade names
Means the designation of organization or individual that used in business activities in order to distinguish a business entity bearing it from other business entities in the same business sector and geological market (Article 4.21 of IP Law). The condition for protecting a trade name is to be "able to distinguish" the business entity bearing that trade name from other business entities in the same business sector and geological market (Article 76 of IP Law). A trade name is distinguishable when it is not identical or confusingly similar to a trade name previously used in the same business sector (Article 78.2 of IP Law) and a trademark or geographical indication protected before the date the trade name is put into use (Article 78.3 of IP Law).
Industrial property rights with respect to a trade name are established on the basis of lawful usage of that trade name (Article 6.3b of IP Law). For legal entities, from our experience, one of the basis to easily determine the starting point of legal name usage is when the ERC is issued (assuming the legal entity enters into operation constantly and immediately after being established). Thus, one of the basis for assessing the distinctiveness of a trade name is associated with the process of registering for the establishment of a legal entity and one can say that the trade name also complies with the provisions on the naming of enterprises under Law on enterprises 2014.
Trademarks
Means a sign to distinguish goods or services of different organizations and individuals. A trademark is formed on the basis of each entity’s creativity, it could be just letters, numbers, images (collectively referred to as signs) or combining signs together to create a specific symbol identifying that subject’s characteristics.
Similar to a trade name, a trademark is only protected when it meets the most important condition - "distinctiveness" and not fall in the category of signs ineligible for protection as trademark. Article 73 Intellectual Property Law indicates signs of ineligibility for protection as trademarks consisting of signs that are identical with or confusingly similar to:
- National flags or national emblems;
- Emblems, flags, armorial bearings, abbreviated names or full names of Vietnamese State bodies, political organizations, socio-political organizations, socio- politico-professional organizations, social organizations or socio-professional organizations or with international organizations, unless permitted by such bodies or organizations.
- Real names, aliases, pseudonyms or images of leaders, national heroes or famous personalities of Vietnam or foreign countries.
- Certification seals, check seals or warranty seals of international organizations which require that their signs must not be used, unless such seals are registered as certification marks by such organizations.
In collation with the above regulations about trademarks, we could come to a conclusion that "Buddha" do not fall in the category of signs ineligible for protection as trademark. Public data regarding the status of trademark registration on the online portal of Intellectual Property Office of Viet Nam proved that the above statement is correct because there are 2 protection titles No. 0126733 issued on Jun 9th, 2009 and No. 0190351 issued on Aug 28th, 2012 for marks with "Buddha" signs and drawings (the below imagine – source http://wipopublish.noip.gov.vn/wopublish-search/public/home;jsessionid=44A5C5FF19D7D9337A54DC6EEE941164?0&fbclid=IwAR3dqVT6s-NvGBjWcKAhNfNVKljHzr_iG8z0EErmO-0VoDHzcS3zheNOoTY)
From our analysis, we would conclude that the provisions of the law in naming of enterprises, trade names, trademarks do not prohibit the use of religious-related terms such as "Buddha" in naming and business usage (this article excludes drawing and image factors in the trademark).
COULD THE COMPETENT AUTHORITY ISSUE A DECISION TO DEPRIVE THE BUSINESS ESTABLISHMENT (BUDDHA BAR) IN DISTRICT 2 OF ITS NAME?
The process of considering, handling a violation of the law leading to the application of penalties commonly undergo these steps:
(i) Acknowledging the actual behavior.
(ii) Determining whether there is any unlawful acts exist? If so, which provisions of law is violated and in which specific sector?
(iii) After the violation has been specified, compare it to the relevant regulations and assess the extent of the violation to decide on an appropriate penalty. Otherwise, there is no basis to conclude that a violation exists.
In the event that Buddha Bar displayed its signboard as reported by the news, whether this business will be deprived of its use of "Buddha" sign?
We do not have the resources to identify the exact relationship between the word "Buddha" and the enterprise’s name of this bar’s owner, as well as the trademark. Therefore, we consider the following assumptions:
(i) Buddha is the specific name component in the registered business name and also the trade name. Article 18 of Decree 78/2015/ND-CP: “The Business Registration Office has the right to approve or reject the proposed name of the enterprise as prescribed by law and the decision of the Business Registration Office is final". In the registration procedure of enterprise establishment, the Business Registration Office first checked the enterprise’s proposed name on database which can be understood that if an enterprise has been issued an ERC, the name of the enterprise has been approved and the throughout its usage, if no one indicates that the name of the enterprise violates industrial property rights (trademark, trade name ...) of other individuals/organizations, there is no basis to determine that the use of the sign "Buddha" in enterprise’s name is infringing.
(ii) Assuming that the entity whose name appears on the trademark protection title is also the entity operating the bar, it is clear as day that there is no infringement of intellectual property rights occurred in this situation (because protection title’s owner and trademark user are one).
No violations committed, no penalties imposed.
(iii) Assuming that the names of enterprises/trade names or trademarks that used by this entity infringes industrial property rights (trade names, trademarks, etc…) of other entities, penalties prescribed in Article 3.3a of Decree 99/2013/ND-CP could be applied: a) Forcible removal of infringing elements from goods and means of business and destruction of infringing elements; forced change of domain information or return of domain names; forced change of name of the enterprise, eliminating infringing elements in the name of the enterprise". At that time, the requesting entity must prove that the enterprise has infringement and as a result, the handling procedure must go through the aforementioned basic steps.
(iv) From an another perspective, if this bar operates under franchising method from the owner of the "Buddha - Bar" brand, the use of the phrase "Buddha" in Vietnam jurisdiction under the form of a trade name or a trademark (may also be business logos, advertisements, etc…) is a compulsory obligation of the franchisee as prescribed in Clause 1, Article 284 of Law on Commerce 2005:
“Commercial franchise means a commercial activity whereby franchisors permit and require franchisees to undertake by themselves to purchase or sell goods or provide services on the following conditions:
1. The purchase or sale of goods or provision of services shall be conducted in accordance with methods of business organization prescribed by franchisors and associated with the franchisors' marks, trade names, business knows-how, business slogans, business logos and advertisements.”
And the law also requires that before franchising is conducted, franchisor must register the franchise activity with the competent state authority.
According to our research, "Buddha - Bar" is a quite well-known brand internationally, (https://www.buddhabar.com/). It belongs to a chain of restaurants, hotels, spas, bars in different countries such as England, France, Dubai (where orthodox religion is not Buddhism). In fact, there has been quite a bit of controversies and criticisms regarding this bar’s name, especially in some countries where Buddhism is considered as an orthodox religion. However, unless there are clear legal basis that an organization or individual violates prohibition of the law in naming/using a business name, trade name or trademark, the competent state authority cannot base on controversies or reactions from the public to repeal, revoke or deprive such organizations or individuals of their rights in using trade names, business names, trademarks.
Author: Thanh Nguyen -Senior Manager, Corporate Advisory, LLVN
Translator: Minh Sang, Legal intern.
Editors: Mai Do (Head of Corporate Advisory), Thuy Anh (Legal Assistant)