From Signs to Exclusive Assets: Exploiting the Legal Value of Trademarks

Introduction

In today’s knowledge-driven economy, intangible assets account for the overwhelming majority of corporate value. Multiple studies indicate that over 80% of the market capitalization of major global enterprises derives from intellectual property (IP) and other intangible assets [3]. Within this category, the Trademark stands out as a strategic asset because of its ability to evolve from a mere identifying sign into a legally protected exclusive right—an asset that can be commercialized, valued, licensed, assigned, mortgaged, and leveraged for long-term economic gains [1].

Vietnam’s legal system, particularly the 2022 Intellectual Property Law, has incorporated the international standards of WIPO and the Paris Convention, thereby establishing a comprehensive framework for trademark protection, exclusive rights, and enforcement mechanisms, while also affirming the economic and legal significance of trademarks.

I. Theoretical Basis and International Legal Framework for Trademarks

1. Legal Concept and the Formation of International Standards

A trademark is defined in international law as “any sign capable of distinguishing the goods or services of one enterprise from those of other enterprises”. This concept is built upon the foundation of: 

• The Paris Convention for the Protection of Industrial Property (1883): This instrument marked the birth of the international industrial property protection system. The Convention established two paramount principles: national treatment and priority right.
• Modern WIPO Treaties: Instruments such as the Trademark Law Treaty (TLT, 1994) and the Singapore Treaty on the Law of Trademarks (STLT, 2006) continue to expand procedural standards, particularly concerning non-traditional forms of Trademarks, fostering legal harmonization among member states.

2. Scope of Protectable Signs: From Traditional to Non-Traditional 

2.1. Traditional Signs 

Signs such as written words, logos, images, symbols, and slogans are protected based on their inherent distinctiveness.

2.2. Non-traditional Signs 

The evolution of commerce requires the expansion of protection to non-visual and non-linguistic elements, which are recognized in many legal systems: 

• Sound Marks: Recognized if they possess strong distinctive capacity and can be graphically represented (e.g., musical notation) or appropriately described. The 2022 Vietnamese IP Law (Article 72.1) has broadened the definition, not only limiting it to visible signs but also including “sound signs that can be graphically represented”.
• Three-Dimensional Shapes (3D Marks): May include the shape of the product or packaging, provided they are not purely functional shapes (functional shape doctrine).
• Single Colour Marks: Protected mainly if they acquire secondary meaning, meaning consumers associate that color with a specific commercial source.
• Motion Marks, Holograms, Taste, and Smell: Protection remains limited by the requirement of clear and objective representation.

3. Legal Functions of a Trademark 

• Source-identifying function: This is the core function. A trademark helps consumers recognize commercial origin, thereby protecting market interests. International case law such as Qualitex Co. v. Jacobson Products (1995) has reaffirmed this function.
• Quality function: The trademark is a commitment to consistent quality and accumulated reputation (Goodwill), forming an inseparable component of the Trademark’s value.
• Advertising function: The trademark is a communication tool that plays a role in building and strengthening brand position in the minds of consumers.

II. Exclusive Rights and Enforcement Mechanisms in the IP System 

1. Priority Right 

According to Article 4 of the Paris Convention, the priority right allows an applicant to use the date of the first filing in a Paris Convention member country as the priority date for other member countries within a period of 6 months. This regulation has been fully internalized by the Vietnamese IP Law (Article 91), facilitating international expansion strategies.

2. Exclusive Right to Use and the Right to Prevent Infringement 

Once a Protection Title is granted, the owner has the exclusive right to exploit the Trademark according to Article 123 of the Vietnamese IP Law. This right includes: 

• The right to use and the right to permit others to use.
• The right to prohibit unauthorized use: The owner may request competent authorities to handle acts of using identical or confusingly similar signs for identical or similar goods/services. Such infringement is determined by the standard set forth in Article 129 of the IP Law.

3. Protection of Well-Known Trademarks and the Anti-Dilution Mechanism 

• Extended Protection: According to Article 6bis of the Paris Convention and the provisions on infringement related to well-known trademarks in Article 129(1)(d) of the Vietnamese IP Law, a well-known trademark can receive extended protection even for non-similar goods/services, if the use of the sign is likely to cause confusion about the origin or take advantage of the prestige of the well-known trademark.

Purpose of the mechanism: To prevent acts of unfair advantage (free-riding) from the reputation of the well-known Trademark and to prevent dilution, including the impairment of the distinctiveness or the evocative/symbolic value of the Trademark.

III. Giá trị kinh tế – pháp lý: Từ tài sản sở hữu trí tuệ đến công cụ tài chính

1. Financial Exploitation 

A protected trademark becomes a legitimate tradable asset, manifested through the following forms: 

• Licensing: Allowing a third party to use the Trademark and collecting royalties. In Vietnam, a license contract must be registered at the National Office of Intellectual Property (NOIP) to be effective against a third party.
• Assignment: Transferring ownership of the Trademark. The assignment procedure also requires registration.
• Valuation, Mortgage, and M&A: Trademarks often constitute a significant portion of a company’s valuation and are a common form of collateral in financial transactions. WIPO records a strong increase in the use of IP assets as collateral in the Asia-Pacific region.

2. Perpetual Nature of the Asset and the Obligation to Use 

A trademark can exist perpetually if it is renewed every 10 years and is genuinely used. According to Article 95 of the IP Law, a Trademark may be canceled if it is not used continuously for 5 years—a regulation compatible with international practice, ensuring the Trademark always serves its commercial function.

IV. Internationalization of Protection via the Madrid System and Protection in the Digital Space 

1. The Madrid System and Internationalization Mechanism 

The Madrid System (Madrid Agreement 1891 & Madrid Protocol 1989) is WIPO’s core mechanism, allowing a single application to seek protection in more than 130 countries. Vietnam has been a member since 2006 and actively uses this system. The advantages of filing under the Madrid System are cost savings, centralized management, and simplified renewal and assignment procedures through a single point of contact (the WIPO International Bureau).

2. Trademark Protection Mechanism in the Digital Space: UDRP 

Domain name misappropriation (cybersquatting) directly threatens Trademark value. The UDRP (Uniform Domain Name Dispute Resolution Policy), managed by WIPO, provides an effective dispute resolution mechanism based on three mandatory criteria: 

• The domain name is identical or confusingly similar to the Trademark.
• The respondent has no rights or legitimate interests in respect of the domain name.
• The domain name has been registered or is being used in bad faith.

The sanctions for this behavior include the cancellation or transfer of the domain name to the rightful Trademark owner. The UDRP mechanism has proven effective in protecting trademarks in the digital environment, minimizing legal conflict, and preventing brand abuse on the global network.

Summary 

A trademark has far surpassed the role of a mere commercial sign ; it has become a complex legal-economic asset with a strategic role in a company’s development. When properly registered, protected, and exploited, a Trademark creates strong legal exclusive rights, sustainable economic value, global expansion potential, and superior competitiveness in the knowledge-based economy. Mastering both international standards (WIPO, Paris Convention, Madrid System) and Vietnamese law (2022 IP Law) is a prerequisite for enterprises to effectively manage Trademark assets, maximize benefits, and mitigate legal risks.

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