An extract from The Intellectual Property Review, 9th Edition
Enforcement of rightsi Possible venues for enforcement
Upon the occurrence of disputes regarding intellectual property rights (IP rights), there are four possible legal options that rights owners may utilise to enforce their IP rights, which are: administrative procedures; civil procedures; criminal charges; and customs seizures. A typical approach may combine two or more of these steps, depending on the specific circumstances of the infringement.Administrative procedures
This is the most common enforcement route in Vietnam as the right holder may request the relevant state authorities to assist them in enforcing their industrial property rights, if their main priority is to stop the infringing actions. Administrative procedures typically involve requesting the authorities to conduct raid actions or impose monetary fines, as well as other sanctions on the infringers.Civil procedures
Civil procedures may be applied to a broad range of disputes, such as IP infringement and contractual disputes involving compensation for damages. Vietnamese courts may grant injunctive relief and monetary damages. However, the plaintiff usually has difficulty in proving damage caused by infringement. Vietnamese law demands that the injured party establish 'actual' damage, meaning that exact calculations of damages are required.
Only Vietnamese lawyers, who work individually or in a Vietnamese law firm, may act as clients' lawyers before Vietnamese courts.Criminal procedures
The Criminal Code of the Socialist Republic of Vietnam (the 1999 Criminal Code) allows for criminal proceedings to be taken against infringers who violate trademarks, geographical indications, copyright and related rights. The courts are more likely to impose sanctions in cases involving counterfeit goods comprising of food or medicine; entailing a large quantity of goods; and where the counterfeit operation is well organised or repetitive. The severity of sanctions also depends on the seriousness of the case, the consequences of the violation and whether the offences are repeated.
On 27 November 2015, the National Assembly adopted the new Criminal Code, which was later amended on 20 June 2017 (the 2015 Criminal Code). The 2015 Criminal Code takes one step forward by criminalising infringing acts against intellectual property rights conducted by commercial legal entities. Pursuant to the 2015 Criminal Code, sanctions for individuals may include loss of certain civil rights, monetary fines upwards of 1 billion dong and imprisonment for up to 30 years; whereas, sanctions for legal entities may include loss of certain civil rights, fines of up to 5 billion dong, business suspension for up to two years and even permanent suspension.Customs
Customs authorities can enforce intellectual property rights at borders, as long as rights owners first register with customs. Customs law also provides for a substantive and procedural basis to seize and detain goods at Vietnamese ports of entry. Upon a valid request and payment of an official fee (i.e., around US$8.60 per request), from the rights owner, customs may supervise and monitor the border gate and report back to the rights owner on potential infringing shipments, and seize a particular shipment at the port of entry.
Unless a valid request is filed with customs, the authorities have no authority to take action on goods that infringe IP rights. In theory, customs can initiate a request on an urgent basis if it becomes aware of suspected infringing goods. In practice, however, customs will only take the initiative if there is clear evidence that the goods are counterfeits of poor quality that could adversely affect the life or health of consumers or harm Vietnamese culture and society, such as pornography or documents that are anti-government.ii Requirements for jurisdiction and venueAdministrative procedures
According to the IP Law, major state authorities with responsibility for conducting administrative procedures against the infringer include: Ministry of Science and Technology; Ministry of Information and Communications; Market Management Bureau; Police; People's Committees (PC) and Customs Offices.
To enforce an industrial property right, the right holder may request relevant state authorities to provide assistance. Accordingly, administrative procedures against an IP infringer will be taken in the following cases:
- an act of IP infringement causes damage to authors, rights holders, consumers or the public;
- manufacturing, importing, transporting or trading in IP counterfeit goods or assigning others to do so; and
- manufacturing, importing, transporting, trading in or storing stamps, labels or other materials bearing a counterfeit mark or geographical indication or assigning others to do so.
Upon receipt of a request from a right holder, the authorities shall examine the request within one to two months depending on the competent authorities in charge of a case (i.e., the average time for an assessment by the Vietnam Intellectual Property Research Institute (VIPRI)) is two months regarding patent applications and one month for layout-designs, industrial designs, trademarks and geographical indications applications). If the application is found to be accurate, relevant authorities may conduct raid and seizure actions on the infringing products of the infringer, without prior notice, and shall impose sanctions if the infringement is found on-site. Authorities can impose fines of up to 250 million dong upon individual infringers, or up to 500 million dong upon infringing entities.Civil procedures
To initiate a civil lawsuit, a right holder needs to file a petition, with all necessary accompanying documentation to the court within two years, counting from the date individuals, agencies or organisations become aware that their rights and legitimate interests are, or have been, infringed upon. It takes five working days for the court to check whether the application is full and accurate. If the application is found to be satisfactory, the court will issue a notice for advance payment of court fees, whereby the plaintiffs will have 15 days to pay the advance payment of court fees. Upon receipt of the advance payment of court fees, the court will then hear the case.
As mentioned above, Vietnamese law requires exact calculations of damages, and plaintiffs typically experience difficulty proving damages caused by the infringement. Therefore, if the parties are able to reach an amicable agreement before the judgment is issued, the court will acknowledge its agreement and issue its decision accordingly.
A court's judgment at the first instance can be appealed to a higher court within 15 days of its issuance. By law, the court of appeal takes two months from the date of official receipt of a case to hear the case. However, in practice, the period for a hearing in a court of first instance or a court of appeal could extend up to 12 months.iii Obtaining relevant evidence of infringement and discovery
This is an important step for the right holder prior to initiating any administrative procedure or court action. The right holder is required to collect full and accurate evidence of infringement by the infringing parties (e.g., sample of infringing products, advertisement of infringing products, counterfeit and pirated goods).
The regulations of Vietnam do not specifically stipulate any provision on how to search for and collect evidence of IP infringement. However, the right holder may opt to seek legal advice from IP experts or IP law firms for thorough and efficient ways to collect evidence from the infringing parties, or using evidence collected in administrative actions from competent authorities, to commence civil lawsuits to claim for its damages.iv Trial decision-maker
Disputes involving IP rights are considered to be a specific form of civil dispute, usually complex and involving in-depth technical factors. Therefore, the assessment of such disputes is not simple. Moreover, the Vietnamese court system does not have a special chamber dealing with IP cases, and many Vietnamese judges lack IP experience and knowledge, especially regarding patents. Additionally, court procedures for settling IP rights violations are time-consuming and require considerable effort. Court decisions are sometimes unsatisfactory, and compensation amounts are sometimes lower than the actual damage.
The panel for first instance trials of civil cases is composed of one judge and two people's jurors. In special cases, the first-instance trial panel may consist of two judges and three people's jurors.v Structure of the trial
In the course of a trial on an IP rights dispute, the plaintiff and the defendant in the litigation bear the burden of proof.
Evidence may be gathered from the following sources:
- readable, audible or visible materials;
- testimonies of involved parties;
- witness testimonies;
- expert conclusions;
- on-site appraisal notes;
- local practices;
- property evaluation results; and
- other sources prescribed by law.
From 1 July 2016, 'local practices' are no longer considered a source of evidence.
Expert conclusions are commonly used because Vietnamese judges lack experience and knowledge regarding the IP field. Dispute resolution procedures consequently face difficulties. Therefore, courts often rely on expert opinions (commonly from the VIPRI or the VNIPO) in order to settle the case.
The hearing shall be conducted orally.
Within three working days of the conclusion of a court session, involved parties, agencies or organisations initiating the lawsuits shall be supplied with judgment extracts by the court.vi Infringement
A lawsuit petition must include the following principal contents:
- date of its inception;
- name of the court receiving the lawsuit petition;
- name and address of the litigator;
- name and address of the IP rights owner to be protected;
- name and address of the person who is sued;
- name and address of persons with related rights and obligations, if any;
- specific matters requested to be settled by the court against the defendant, by persons with related rights and obligations;
- names and addresses of witnesses, if any;
- documents and evidence proving that the petition is well grounded and lawful;
- other information that the litigator deems necessary for the resolution of the case; and
- it must be signed or fingerprinted by the individual being the litigator, or signed or stamped by the lawful representative of the agency or organisation being the litigator.
Litigators must send lawsuit petitions, together with accompanying documents or evidence, proving that their claims are well-grounded and lawful. In case of lack of documents or evidence for objective reasons, claimants are entitled to supplement during the process of the case.
Practically speaking, competent authorities in Vietnam accept the doctrine of equivalence in examining the infringement of a product or a process, which can be considered as infringing if the IP rights related to the functioning of such product are almost identical to the invention that has been granted protection.vii Defences
Regarding IP rights on trademarks, trade names and geographical indications, the putative infringer should avoid conducting acts that are prohibited in Article 129 of the IP Law, in order not to be considered an infringer and be subjected to the imposition of sanctions from competent authorities.
In addition, owners of industrial property, as well as organisations and individuals granted the right to use or the right to manage geographical indications, have the right to prevent others from using their industrial property, unless the putative infringer performs the following acts:
- using inventions, industrial designs or layout-designs in service of their personal needs or for non-commercial purposes, or for purposes of evaluation, analysis, research, teaching, testing, trial production or information collection for carrying out procedures of application for licences for production, importation or circulation of products;
- circulating, importing and exploiting product utilities that were lawfully put on the market including the overseas market, except for products that were not put on the overseas market by the mark owners or their licensees;
- using inventions, industrial designs or layout-designs for the sole purpose of maintaining the operation of foreign means of transport in transit, or temporarily staying in the territory of Vietnam;
- using inventions or industrial designs by persons with prior use rights, according to the provisions of Article 134 of the IP Law;
- using inventions by persons authorised by competent state bodies, according to the provisions of Articles 145 and 146 of the IP Law;
- using layout-designs without knowing, or having the obligation to know that such layout-designs are under protection;
- using marks identical with or similar to protected geographical indications, where such marks have acquired protection in an honest manner, before the date of filing the application for registration of such geographical indication; and
- using, in an honest manner, people's names, descriptive marks of type, quantity, quality, utility, value, geographical origin and other properties of goods or services.
As stipulated in the Civil Procedure Code, the competent courts must conduct a hearing upon receipt of a complaint from the litigators within two to four months. However, the period could range from four to 12 months, owing to the complexity and duplication of administrative procedures. If the parties are able to reach an amicable agreement before the issuance of judgment, the court will acknowledge its agreement and issue its decision accordingly.
Regarding other administrative procedures, the time period for the competent authorities to issue a decision on a complaint or request for assessment could be shorter.
For the VIPRI, the average time for its assessment is two months regarding patents application, and one month for layout-designs, industrial designs, trademarks and geographical indications applications.
Regarding customs procedures, it takes about 24 hours for the customs office to issue a notice of acceptance, upon receiving a petition for suspension of customs clearance, if the right holder requests the customs agency to suspend the customs procedures to collect information and evidence on the infringing products; and within 20 days of receiving a petition for inspection or supervision of imports or exports, the customs office shall issue a notice of acceptance, if the right holder requests the customs agency to suspend the customs procedures, in order to collect information for the exercise of the right to request suspension of customs procedures.ix Remedies
Courts may apply the following civil remedies in dealing with organisations and individuals, who have committed acts of infringement of intellectual property rights:
- compulsory termination of the infringing acts;
- compulsory public apology and rectification;
- compulsory performance of civil obligations;
- compulsory payment of damages for loss; or
- compulsory destruction, distribution or use for non-commercial purposes of goods, raw materials, materials and facilities used principally for the production or trading of goods infringing IP rights, provided that such destruction, distribution or use will not affect the exploitation of rights by IP rights holders.
Where the court holds there is no infringement, the defendant may claim reimbursement for reasonable legal fees or other expenses from the plaintiff. Additionally, the abuse of procedures for protection of IP rights, causing damages to others, may also be subject to legal actions.
Rights holders may exercise their right to request the court handling the case for the application of provisional emergency measures, as provided for in Article 102 of the Civil Procedure Code, to provisionally deal with the urgent requests of the involved parties, to protect and preserve evidence, in order to avoid irrecoverable damage or to ensure execution of the judgment.
The application, change and cancellation of provisional emergency measures before the opening of a court session shall be considered and decided by a judge.
The application, change and cancellation of provisional emergency measures at court sessions shall be considered and decided by the trial panels.x Appellate review
The Vietnamese courts shall follow the regime of two-level adjudication (i.e., first-instance and appellate) resulting in two trials, if first-instance judgments or decisions have already taken legal effect, but have not detected other violations or fresh facts. In these circumstances the courts shall undertake the following special procedures in resolving the case, cassation procedures and reopening procedures.
Cassation procedures involve the review of legally effective court judgments or decisions that are appealed owing to alleged serious law violations detected in the settlement of cases.
Reopening procedures involves the review of legally effective judgments or decisions that are the subject of an appeal, owing to the appearance of fresh facts that may substantially change the contents of the judgments or decisions, which were not known to the courts and the involved parties when the courts rendered such judgments or decisions.xi Alternatives to litigation
In addition to litigation, the right holder may opt for arbitration or other administrative actions (e.g., sending a cease-and-desist letter to the infringer, or attempts to reach an agreement on an amicable resolution from both parties). As far as we are aware, there is currently no dispute regarding the IP field that has been successfully resolved by arbitration.