What types of remedies can be awarded in a litigation in Vietnam? How is it determined which damage theory applies?

Pursuant to Article 204, Law on Intellectual Property of Vietnam, principles for determining loss and damage caused by an infringement of Intellectual Property rights are stipulated as follows:

1. Loss and damage caused by acts of infringement of industrial property rights shall comprise:

(a) Material loss and damage including property loss, decrease in income and profit, loss of business opportunity, and reasonable expenses for mitigating and remedying the material damage;

(b) Spiritual loss and damage including damage to honour, dignity, prestige, reputation and other spiritual loss caused to authors of literary, artistic and scientific works; to performers; to authors of inventions, industrial designs, layout designs; and to breeders of plant varieties.

2. The extent of damage shall be determined on the basis of actual losses suffered by intellectual property right holders due to acts of infringement of Intellectual Property rights.

Article 16 to 20, Decree No. 105/2006/ND-CP provide as follows:

Article 16. Principles for determination of damage

1. Damage as a result of intellectual property right infringement provided in Article 204 of the Law on Intellectual Property is actual losses including both physical and spiritual losses directly caused to the intellectual property right holder by acts of intellectual property right infringement.

2. Actual losses shall be regarded as having been occurred when all of the following bases exist:

a/ The physical or spiritual benefit is real and belongs to the aggrieved person;

b/ The aggrieved person could achieve the benefit referred to at Point a of this Clause;

c/ There is a decrease in or loss of the benefit of the aggrieved person after the act of intellectual property right infringement is committed as compared to the possibility of achieving such benefit if such act of intellectual property right infringement would not happen and it constitutes the direct cause of such decrease in or loss of the benefit.

3. The level of damage is determined in accordance with the infringing elements of the intellectual property right subject matters.

The determination of the level of damage is based on the evidence of the damage furnished by the parties, including the assessment results and damage declarations that clearly state the bases for determination and calculation of the level of damage.

 

Article 17. Loss in property

1. Losses in property are determined in accordance with the level of decrease in or loss of the in-cash value of the protected intellectual property right subject matters.

2. The in-cash value of an intellectual property right subject matter referred to in Clause 1 of this Article is determined in accordance with the following bases:

a/ The price of transfer of the ownership right or the price of assignment of the use right of the intellectual property right subject matter;

b/ The value of the business capital contributed in the form of Intellectual Property rights;

c/ The ratio of the value of Intellectual Property rights to the total assets of an enterprise;

d/ The value of investment in the creation and development of the intellectual property right subject matter, including marketing, research, advertising and labor costs, taxes and other expenses.

Article 18. Decrease in income, profits

1. The income, profits referred to at Point a, Clause 1 of Article 204 of the Law on Intellectual Property include the following:

a/ The income, profits gained from directly using and exploiting the intellectual property right subject matter;

b/ The income, profits gained from leasing the intellectual property right subject matter;

c/ The income, profits gained from assigning the right to use the intellectual property right subject matter.

2. The level of decrease in income, profits is determined on the following bases:

a/ Direct comparison between the levels of actual income, profits before and after the acts of infringement are committed, applicable to each type of income specified in Clause 1 of this Article;

b/ Comparison between the yields or volumes of products, goods or services actually consumed or supplied before and after the acts of infringement are committed;

c/ Comparison between actual sales price of the products, goods or services on the market before and after the acts of infringement are committed.

Article 19. Losses in business opportunities

1. Business opportunities specified at Point a, Clause 1 of Article 204 of the Law on Intellectual Property include the following:

a/ Actual possibility of directly using or exploiting the intellectual property right subject matter in the business course;

b/ Actual possibility of leasing the intellectual property right subject matter to other persons;

c/ Actual possibility of assigning the use right of or transferring the intellectual property right subject matter to other persons;

d/ Loss of other business opportunities directly caused by the acts of infringement.

2. A loss in business opportunities means loss of the in-cash value of the income that the aggrieved person would have achieved in any of the cases referred to in Clause 1 of this Article but fails to do so due to the acts of infringement.

Article 20. Reasonable expenses for prevention and remedy of damage

Reasonable expenses for prevention and remedy of damage referred to at Point a, Clause 1, Article 204 of the Law on Intellectual Property include expenses for temporary custody, maintenance, storage of infringing goods, costs of implementation of provisional urgent measures, reasonable expenses for hire of the assessment service, prevention and remedy of consequences of acts of infringement, and cost of notification and correction in the mass media relating to acts of infringement.

Grounds of determination of damages are stipulated in Article 205 of Vietnam IP Law 2005:

1. Where the plaintiff succeeds in proving that the act of infringement of Intellectual Property rights has caused physical damages to him or her, he or she shall have the right to request the court to determine the rate of compensation based on one of the following grounds:

a) The total physical damage equivalent in an amount of money plus the profits gained by the dependant from the act of infringement if the reduced profits of the plaintiff have not yet been included in the total physical damage;

b) The value of the transfer of the right to use the intellectual property subject matter with the presumption that the defendant has been transferred by the plaintiff the right to use that intellectual property subject matter under a license contract within the extent equivalent to the infringing act committed;

c) Where it is unable to determine the rate of compensation in accordance with subparagraphs (a) and (b) of this paragraph, the rate of compensation shall be fixed by the court but not exceeding VND500 million.

2. Where the plaintiff succeeds in proving that the act of infringement of Intellectual Property rights has caused spiritual damage to him or her, he or she shall have the right to request the court to determine the rate of compensation ranging from VND5 million to VND50 million, depending on the level of damage.

3. Apart from the compensation as provided for in subparagraphs (1) and (2) of this paragraph, the Owner(s) of IP rights shall have the right to request the court to compel organizations or individuals that have committed acts of infringement of Intellectual Property rights to pay reasonable attorney fees.

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