How can the Vietnamese courts determine the compensable damages caused by IPR infringement in Vietnam?

2.1. If plaintiffs can prove that infringements of IPR have caused material damage to them, they may request the Vietnamese Courts to decide on levels of compensation on one of the bases specified in Clause 1, Article 205 of the Intellectual Property Law of Vietnam as chosen by them.

a) Upon determining profits earned by defendants as a result of their IPR infringements as specified at Point a, Clause 1, Article 205 of Vietnam IP Law, expenses paid by defendants should be subtracted from total turnover earned by defendants or part of defendants’ profits which is turnover from other activities not related to their infringements, if any, should be determined.

In Vietnam, total turnovers of defendants are calculated on the basis of all invoices and vouchers on the sale or use by defendants of works infringing upon intellectual property rights of plaintiffs.

Vietnamese Courts shall determine profits of defendants after subtracting all expenses from total turnovers of defendants.

Profits earned by defendants from their infringements of IPR can be accounted into the total in-cash material damage of plaintiffs only if decreased profit amounts of plaintiffs have not yet been accounted into the total material damage.

b) The price of the licensing of an IP object specified at Point b, Clause 1, Article 205 of Vietnam Intellectual Property Law is determined by one of the following methods:

b.1/ It is the payable amount in case the right holder and the infringer have freely agreed and signed a contract on licensing of that IP object (reasonable copyright fee and licensing fee). The infringement is the very act of using the IP object;

b.2/ It is the presumed licensing price of the IP object, which is determined by the method of determining the sum of money which the right holder (the plaintiff) and the licensee (the defendant) may have agreed upon by the time the infringement is committed, if the parties voluntarily agree with each other on that sum of money;

b.3/ It is based on licensing prices of IP objects applied in the relevant domain and referred to in previous practices of licensing IP objects (for example, cases of licensing of IP objects in the relevant domain in which payments or security amounts have been made before the infringement is committed, with licensing fee levels widely considered reasonable or uniformly applied in Vietnam.

c) The Vietnamese court shall apply the compensation level specified at Point c, Clause 1, Article 205 of Vietnam IP Law (law-specified compensations for damage) only in case it is impossible to determine the level of compensations for the material damage of the plaintiff on the bases specified at Point a and b, Clause 1, Article 205 of Vietnam IP Law.

c.1/ The plaintiff shall prove that the determination of the level of compensation for the material damage in this case is impossible or the market for lawful goods is not enough to determine the plaintiff’s damage based on the decrease in the sale turnover of the infringed goods after the infringement is committed, and request the court to apply the law-specified compensation level. However, if the defendant can prove that the plaintiff is dishonest in proving the damage because the compensation level to be paid under a claim made under provisions of Points a and b, Clause 1, Article 205 of the Intellectual Property Law is lower than the law-specified compensation level and that the plaintiff gives a pretext for enjoying the law-specified compensation level, and the defendant can prove the plaintiff’s actual damage level, the court shall reject the plaintiff’s claim and may accept the defendant’s request to decide on the compensation level.

c.2/ The Vietnamese Court shall decide on compensations for material damage in the case specified at Point c, Clause 1, Article 205 of Vietnam IP Law at the level of between VND 5 million and VND 500 million. In order to ensure that its decision on compensation is reasonable and suitable in each specific case and protects lawful rights and interests of aggrieved persons, the Vietnamese Court shall base itself on the nature and severity of infringements of copyright and related rights, specifically as follows:

– Circumstance and motive of the infringement (intentional, unintentional or compelled infringement, infringement committed by a person due to his/her material or spiritual dependence on another person, first-time infringement, recidivism, etc.);

– Way of committing the infringement (organized or unorganized infringement, infringement committed by a person on his/her own or after being bribed, deceived or forced by another person);

– Geographical area, period of time, volume and scale of the infringement (it is committed in a district of a province or many districts of different provinces, during a long or short period of time, involves a large or small quantity of things, on a commercial scale, etc.);

– Impacts and consequences of the infringement (local or international impacts on the honor, dignity, prestige or reputation of the right holder; material consequences caused to the right holder).

c.3/ The Vietnamese Court shall base itself on each infringed IP object to set compensation levels for material damage within the limit specified at Point c.2, Item 2.1 of this Section 2.

If a dispute involves more than one infringed intellectual property object, the aggregate compensation amount for all these objects must not exceed VND 500 million

INDEX:

Question & Answer for Joint Circular No. 02/2008/TTLT-TANDTC-VKSNDTC-BVHTT&DL-BKH&CN-BTP of April 3, 2008, Guiding the Application of a Number of Legal Provisions to the Settlement of Disputes over intellectual Property Rights at People’s Courts

Question 1: Disputes over intellectual property rights which fall under the handling competence of people’s courts in Vietnam

Question 2: Right to institute civil lawsuits on IPR in Vietnam

Question 3: Conditions on institution of civil lawsuits over intellectual property rights in Vietnam

Question 4: Application of law: IP Law of Vietnam or other Laws?

Question 5: Application of transitional provisions to settling disputes over intellectual property rights in Vietnam

Question 6: Intellectual property assessment in Vietnam – Vietnam Intellectual property assessment

Question 7: Claims for compensations for damage upon infringing Intellectual Property Rights in Vietnam

Question 8: Bases for determination of compensations to be paid for damage caused by infringements of IPRs in Vietnam

Question 9: Provisional urgent measures in Vietnam

Question 10: The right and burden of proof of involved parties in a civil proceedings in Vietnam

Question 11: Court rulings on application of civil remedies in Vietnam (Article 202 of Vietnam Intellectual Property Law)

Question 12: Coordination in settling IPR disputes

How do the Vietnamese enforcement authorities coordinate to handle the IPR disputes?

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