A notable increase in IP infringement cases hints at an evolving future for IP enforcement in the country.
Introduction
Vietnam's intellectual property ("IP") litigation landscape is transforming. Few IP disputes traditionally reached the courtroom. Recently, a notable increase in IP infringement cases has signalled a shift. Reflecting deeper trends and challenges, this surge hints at an evolving future for IP enforcement in the country.
Overview of IP Litigation in Vietnam
Vietnam follows the civil law tradition, which relies on written laws. Court judgments/decisions do not create binding precedents for later cases. Yet they reflect judicial practice with important implications for IP rights holders.
Vietnamese courts settle IP infringement cases and IP disputes under civil and/or criminal proceedings. There are no official statistics on the number of IP civil litigation cases, yet this number is much smaller as compared to criminal IP cases.
Criminal IP Litigation
In 2022, Vietnam saw 220 criminal investigations related to IP rights infringement (the most recent statistics at time of publication)1. Of these, 112 cases involving 241 defendants went to trial, primarily for counterfeiting offences. In less straightforward cases, Vietnamese courts appear to show reluctance to bring charges against IP infringement cases under Article 226 of the Criminal Code. However, there's been a notable increase in IP litigation of this kind in recent years. The 2021-2022 period marked a significant rise, with 19 cases involving 24 accused. This figure is nearly equal to the total from the previous decade (21 cases with 30 accused from 2011 to 2020).
While IP rights holders cannot initiate criminal proceedings directly, their role in verifying the materials or products under investigation is crucial. Additionally, they have avenues to claim damages in these criminal cases.
Civil IP Litigation
Civil litigation in Vietnam may be thought to be a key method for enforcing IP rights, but it actually contributes only a small portion to IP enforcement as compared to administrative measures. The main reasons for that being civil litigation is time-consuming, costly, and involves complex legal proceedings. While the laws set a time limit for resolving a case at the court of two to six months, cases often span years. In addition, courts, particularly those in remote provinces, may lack expertise in IP matters, leading to complications and concerned parties' dissatisfaction.
Despite these challenges, civil litigation offers distinct advantages:
- Court judgments carry more weight than administrative decisions as they can be more of a deterrent. If defendants/infringers fail to voluntarily fulfill their obligations under a judgment, plaintiffs/IP right owners can petition a competent civil judgment enforcement authority to compel compliance.
- Moreover, civil litigation covers various aspects of a case, such as recognition of IP rights/IP rights owners, damage assessment, halting infringement, cost reimbursement, etc. With respect to claimable amounts of money:
- IP right owners can claim and potentially receive substantial damages. The chance and the amount of compensation granted depend on the volume of evidence submitted by the IP right owners. By laws, damages could be loss of income, profits, business opportunities, and reasonable expenses to prevent and overcome damage caused by infringers. For trade mark and patent infringements, some recent court decisions show that compensation for damages is usually based on the loss of business opportunities/profit that IP right owners could have gained if the alleged infringement had not been carried out. As for copyright cases, compensation is usually based on the licensing rate that copyright owners would have applied if the right had been properly licensed to infringers. Further, copyright owners have the burden of submitting material evidence to prove that the licensing rate is the actual market rate in Vietnam.
- In IP infringement cases, it is now common for the courts to grant a reimbursement of the reasonable lawyer's fee that IP right owners had paid for the case. Based on the evidence submitted by IP rights owners, e.g. legal service contracts and invoices, the courts will determine the amount of money considered as "reasonable".
In terms of procedures:
- IP litigation in Vietnamese courts typically spans 18-24 months for the first instance and over 12 months for the second instance. While summary or fast-track proceedings, available under specific conditions, can significantly reduce time and simplify the process, no IP cases have been handled this way to date.
- Appeals against first-instance court judgments must be made within 15 days by any party or the People Procuracy Body. Second-instance court judgments are final and immediately effective.
Potential Judicial Advancements
While there is currently no IP court in Vietnam, regulations facilitating the establishment of the IP court are provided in the draft amendment to the Law on the People Court's Organisation ("Draft Law"). Under the Draft Law, upon the proposal of the Supreme Court's Chief Justice, the National Assembly's Standing Committee can (i) decide to establish a specialised court to adjudicate IP cases' first-instance trials and (ii) regulate such court's territorial jurisdiction scope.2 This prospective change aligns with Vietnam's evolving IP enforcement landscape, signaling potential developments to the local judicial system.
What to Expect
The number of IP disputes filed before the courts in Vietnam each year are still very limited. However, given the large number of infringement cases resolved by administrative measures and the surge of civil litigation cases in recent years, more IP rights owners are expected to use IP litigation as a strategic and effective measure to deal with IP disputes. Further, if the Vietnam Assembly passes the Draft Law, this will strengthen the court system's capacity and competence to handle IP matters.
Footnotes
2. Articles 62, 78.14, 153.2(b) Draft 5.0 of the Amendment to Law on People's Court Organisation - https://vbpq.toaan.gov.vn/webcenter/portal/htvb/chi-tiet-vbdt?dDocName=TAND314001
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