How can the Vietnamese Courts determine the decrease in income or profit in an IPR related lawsuit?

In order to determine decrease in incomes or profits of aggrieved persons, it is necessary to determine whether or not they earn incomes or profits before infringements are committed.

a) Incomes or profits include:

a.1. Incomes or profits earned by aggrieved persons from the direct use and exploitation of intellectual property objects.

For example: The owner of an invention manufactures patented products in accordance with Point a, Clause 1, Article 124 of Vietnam IP Law and sell them for profits.

a.2. Incomes or profits earned by aggrieved persons from the lease of infringed intellectual property objects (original cinematographic works or computer programs or copies thereof).

For example: The holder of copyright to a cinematographic work or a computer program exercises the economic right provided for at Point f, Clause 1, Article 20 of Vietnam IP Law by leasing the original cinematographic work or computer program or copies thereof and receiving rents or other physical benefits from organizations and individuals renting that cinematographic work or computer program.

a.3. Incomes or profits earned by aggrieved persons from the licensing of intellectual property objects.

For example: The owner of an invention signs a contract on licensing of that invention to another individual or organization and receives a licensing payment as agreed in the contract.

b) Based on determined incomes or profits of aggrieved persons, it is necessary to determine the level of decrease in their incomes or profits on one of the bases specified in Clause 2, Article 18 of Decree No. 105/2006/ND-CP.

For example: If incomes or profits are earned from the direct use or exploitation of IPR, levels of actual incomes or profits earned before and after infringing acts are committed must be compared in order to clearly identify the level of income or profit decrease. If an aggrieved person’s income or profit amount earned after an infringement is committed is smaller than his/her income or profit amount earned before the infringement is committed, the difference between these amounts is the aggrieved person’s actual income or profit decrease.

Upon determination of incomes or profits of aggrieved persons in Vietnam, it is necessary to clearly identify objective factors which affect the increase or decrease of incomes or profits of aggrieved persons but are not related to the infringements of IPRs in order to ensure the correct determination of the aggrieved persons’ actual income or profit decreases.

Any case in which an infringement of IPRs in Vietnam is actually committed and the determination of damage shows that the aggrieved party’s income or profit amounts earned after the infringement is committed do not decrease compared to those earned before the infringement but are still smaller than those they should actually have earned in the absence of the infringement would also be considered a case of income or profit decrease.

For example: In 2004, Company A invested in a new technological line to manufacture building steel bearing the mark “TN” which is sold well on the construction market. Based on received product orders, Company A could sell up to 200,000 tons of steel “TN” and earn a turnover of VND 10 billion and a profit VND 2 billion (100). Company B illegally affixed the mark “TN” of Company A on its steel products and sold them on the market, causing a loss of 20 of Company A’s market share. Consequently, Company A could not sell 40,000 tons of steel and suffered a decrease of 20 in both expected turnover and profit (VND 400 million). Though Company A’s profit amount earned in 2006 saw no decrease compared to that earned in 2005, its expected profit amount actually decreased by VND 40 million due to Company B’s infringement. This decrease is therefore considered a loss of Company A.

1.6. Losses in business opportunities are determined under Article 19 of Decree No. 105/ND-CP.

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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