Table Of Contents

The bases and methods of calculating damages caused by IPR infringement in Vietnam are specified in Article 205 of the Law on Intellectual Property and Clause 2, Section 1, Part 8 of Joint Circular No. 02/2008/TTLT-TANDTC -VKSNDTC-BVHTT&DL-BKH&CN-BTP dated 3/4/2008. Damages caused by acts of infringing intellectual property rights include material loss and damages and spiritual damages. According to Article 205 of the IP Law, the court has two methods to determine the amount of compensation: (i) Material (actual) damages and (ii) statutory damages.

 

1.1. Basis considered as actual damages

According to Paragraph 2 Article 69 of  Decree 17/2023/ND-CP regarding the basis considered as actual damages if:

  • Physical or mental benefits are real and belong to the infringed persons: Physical and/or mental benefits are results (products) of copyright, related rights which the infringed persons are entitled to gain; and
  • The infringed persons are capable of gaining benefits under Point a of this Clause: The infringed persons would gain (receive) the physical or mental benefits under certain conditions if copyright, related right infringement did not occur; and
  • The infringed persons gain fewer benefits following copyright, related right infringement or none at all compared to what they would have gained without the infringement as a direct result of the copyright, related right infringement: Before the infringement, the infringed person has gained physical or mental benefits after the infringement, the infringed person gain less benefits or none at all compared to what they previously received before the infringement and there must be a causation relationship between the infringement and the loss, reduction of benefits gained.

In summary: Basis shall be considered as actual damages if:

  • The benefit loss is entitled to gain by the infringed person, and
  • Said person is also capable of gaining said benefit, and
  • Due to the infringement said benefit was lessened or lost.

 

1.2. Spiritual/Mental damages

- Damage to reputation, dignity, credibility, and other mental damage done to authors, performers, copyright holders, and related right holders as a result of copyright-related rights being infringed

- This leads to damaged reputation, dignity, reduced or lost credibility, reputation, and trust due to misunderstanding, duration of suffering, level of grief, sorrow, and emotional loss to the point where infringing organizations, and individuals are required to make public apologies, remediate and provide compensation for mental damage

 

1.3. Property damages

Determined by the level of reduction or loss in monetary value of a subject under copyright, related right protection

The basis for the monetary value is calculated as follows

  • Ownership licensing costs or use right transfer costs for copyright and related rights;
  • Value of capital contribution in the form of copyright, related right
  • Value of copyright, related rights within the total assets of enterprises
  • Investment in study, creation, and development to create works, subjects of copyright, and related rights, including costs for investment, study, provision of technical equipment, facilities, marketing, advertising, labor, tax, and other costs\

 

1.4. Reduction of income, profits

Income and profits include (but are not limited to)

  • Income, profits gained directly or indirectly by using subjects of copyright, related rights
  • Income, profits gained by leasing subjects of copyright, related rights that are original copies, copies of works or motion pictures, computer programs
  • Income, profits gained by transfer of use right of copyright, related rights
  • Income, profits gained by licensing of copyright ownership, related right ownership

Basis for reduction of income, profit

  • Regular use of works, performances, audio recordings, video recordings, and broadcasting programs is affected: Compare the number of copies sold or provided before and after the infringement occurs; frequency of use, screening, broadcast, transmission, access to works, performances, audio recordings video recordings, broadcasting programs before and after the infringement occurs; the number of users, subscribers before and after the infringement occurs
  • Compare the sale price on the market of copies before and after the infringement occurs
  • Damage to legitimate benefits of right holders is done unreasonably: Compare revenues generated by the use of subjects of copyright, and related rights before and after the infringement occurs for each type of income 

 

2. Elements of Proof

The tapestry of proof required to weave a successful damage claim in Vietnam is as diverse as the types of harm itself. Each thread, each piece of evidence, plays a crucial role in convincing the court of your suffered loss.

For material damages, including but not limited to property damages and reduction of income, and profit; concrete proof forms the bedrock. Receipts, invoices, financial statements, and expert evaluations meticulously document the tangible losses incurred. Medical bills detail treatment costs, while repair logs chronicle property damage. In cases of lost income, tax documents, and employment contracts paint a picture of financial disruption. The burden of proof rests on the claimant to stitch these elements together, presenting a clear and credible narrative of loss.

Spiritual damages, however, dwell in a realm less tangible. Proving emotional distress often hinges on witness testimonies, psychological evaluations, and personal journals that weave a tapestry of the claimant's inner turmoil. Expert opinions may shed light on the nature and severity of the psychological impact, adding weight to the narrative. For reputational damage, media articles, social media posts, and witness accounts of how the harm affected the claimant's standing in the community become crucial threads. In all cases, consistency and credibility are paramount; the narrative must resonate with the court and evoke a clear understanding of the intangible harm suffered.

The proof required for specific claims adds further intricacy to the picture. Intellectual property infringement, for instance, demands expert analysis of copyrighted material or patented technologies to establish unauthorized use. Environmental damage necessitates scientific reports and environmental impact assessments to quantify the harm caused. Each claim presents its unique evidentiary puzzle, demanding careful tailoring of evidence to fit the specific legal nuances.

Finally, remember that the burden of proof lies with the claimant. Weaving a compelling narrative from the available threads, ensuring its coherence and credibility, becomes the key to unlocking the door to compensation. Consulting legal professionals who can navigate the intricacies of evidence requirements and effectively present your case becomes a crucial step in this journey.

 

We looked into more than 30 Vietnamese IP rulings and found that plaintiffs' claims extend beyond stopping current infringement and protecting their rights and legitimate interests. The majority of intellectual property lawsuits always center on a claim for damages. Notably, plaintiffs frequently ask the court for hefty financial awards, sometimes reaching billions of dong. 

A right holder filing a lawsuit for infringement is often, if not always driven in part by the desire to make it clear to the defendant and other parties that he will take action to enforce his registered right to stop infringing behavior. Therefore, the rights holder's main objective is not limited to stopping the defendant from carrying out infringement-related actions. When a rights holder files a lawsuit, their main goal is not only to stop infringement and harm to their intellectual property but also to ask the court to compel the defendant to pay a reasonable amount of damages.

 

4. Tips involving damage claim IP cases

 

In the IP cases we reviewed, we find that most courts accept the cost that the plaintiff pays to hire a lawyer to be calculated as the material damage of the plaintiff. Typically, in Kim Dong Pharmaceutical Co., Ltd. vs. CVS Company, the court of first instance accepted the plaintiff’s claim, ordering the defendant to pay a record amount of attorneys’ fees totaling VND 630 million.

 

4.2. The Role of Expert Assessments

Intellectual property (IP) assessments play a crucial role in enforcing IP rights in Vietnam. These assessments involve expert opinions and evidence on various IP matters, including:

  • Identifying & Assessing Infringement: Experts help determine whether an IP right has been infringed, analyzing elements like similarity, confusion potential, and legal interpretations.
  • Valuing IP Assets: Accurate valuations of IP assets like trademarks, patents, or copyrights are vital for negotiations, licensing deals, or damage calculations in infringement cases.
  • Quantifying Infringement Damages: Experts estimate the financial losses resulting from IP infringement, providing invaluable evidence for legal proceedings.

In Vietnam, IP assessments are commonly initiated by:

  • Disputing Parties: To strengthen their arguments in court or during mediation, either the IP right holder or the accused infringer can seek an expert assessment.
  • Enforcement Agencies: Courts, market management authorities, customs officials, and even local committees may request IP assessments to support their investigations and decisions regarding IP infringement cases.

In Vietnam, industrial property infringement assessments play a crucial role in legal proceedings. Currently, the Vietnam Intellectual Property Science Institute (VIPRI) under the Ministry of Science and Technology holds the unique position of offering official assessment services. Upon request, VIPRI issues an "Assessment Conclusion" document, which serves as an evidence-based analysis providing comparisons, evaluations, and conclusions regarding the potential infringement of industrial property rights.

While VIPRI's Assessment Conclusion holds significant weight and is often submitted by the plaintiff as evidence, it's crucial to remember that courts retain full autonomy. They are not legally bound by the VIPRI assessment and can if deemed necessary, conduct their independent investigations through established court procedures like soliciting expertise or appointing experts from other agencies. In essence, VIPRI provides valuable, court-admissible evidence, but the ultimate decision regarding infringement rests with the presiding judge.

For intricate intellectual property (IP) cases in Vietnam, particularly those involving technical aspects of patents or industrial designs, Vietnam Intellectual Property Science Institute (VIPRI) Assessment Conclusions have increasingly assisted in resolving disputes through civil means. Recent data suggests that plaintiffs holding favorable VIPRI conclusions tend to see higher success rates in infringement litigation. While legally not mandatory, proactive pursuit of a VIPRI Assessment Conclusion can strategically strengthen a right holder's position by providing comprehensive evidence and exploring potential litigation avenues. This proactive approach can benefit both parties by facilitating faster and more informed dispute resolution.

 

5. Conclusion

From the tangible realm of financial loss to the intangible realm of emotional distress, damage claims in Vietnamese courts encompass a multifaceted landscape. While the legal framework lays the groundwork for seeking compensation, the burden of proof, the nature of recoverable damages, and the evolving trends within the legal system all shape the ultimate outcomes. As Vietnam's legal landscape continues to evolve, adapting to international influences and societal shifts, the intricacies of damage claims will undoubtedly undergo further transformation. Addressing the challenges of evidentiary burdens, ensuring fair and effective quantifying methods for both material and spiritual damages, and exploring alternative dispute resolution avenues remain crucial considerations. Ultimately, upholding a robust and just system for damage claims requires a constant interplay between legal clarity, evidentiary accessibility, and a keen awareness of the changing needs of Vietnamese society. Only through such a multifaceted approach can this vital mechanism maintain its role as a guarantor of justice and a beacon of solace for those seeking redress in the Vietnamese legal system.

If you need further explanation on this subject, please don't hesitate to contact us through email at dung@luatminhkhue.vn or phone number: +84986 386 648. Lawyer To Thi Phuong Dzung.