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[Part 1/2] The Amount of Non-contractual Damages in Intellectual Property Disputes Accepted by Vietnamese Courts Inclines to be Higher over the Last Decade

29

JAN

2021

General Legal Bases for Claiming Damages

As presented in our previous article “6 Key Features of Liability for Non-contractual Damages Compensation in Vietnam due to Infringement of Intellectual Property Rights Compared to Liability for Non-contractual Damages in the Civil Code (see link: http://bross.vn/newsletter/ip-news-update/6-dac-trung-khac-biet-chu-yeu-cua-trach-nhiem-boi-thuong-thiet), mental damage along with 4 types of material damage caused by infringement of intellectual property rights can be actionable.

Those 4 types of physical damage including: (a) actual loss of assets, (b) loss of income and profit, (c) loss of business opportunity, and (d) reasonable expenses for preventing and remedying damage are accepted by court only when all three bases are proved by the plaintiff:

(i) The material or spiritual benefits are real and belong to the plaintiff;

(ii) The aggrieved person (plaintiff) is likely to gain the benefits (i) above

(iii) There is a decrease or loss of benefits of the plaintiff after the act of infringement occurred compared to the ability to gain that benefit when there is no infringement and the act of infringement is the direct cause for diminishing or losing that benefit.

Summary of 5 cases of infringement of intellectual property rights with claims for damages before the courts nationwide before 2012

It is clear that the law imposes very high legal standards on claims for damage in IP disputes, which is practically considered difficult to prove.

5 cases heard by courts before the year of 2012 summarized by us below have showed that a court accepted a record of damages of nearly VND 740 million compared to VND 1.5 billion asked by the plaintiff, even though the entire claims were later canceled entirely by the court of appeal, and more interestingly the first instance and appellate judgments subsequently continued to be canceled and forced to remand by the cassation decision by the Supreme People's Court.

In another case, a plaintiff sued for recovery of 3.0 billion VND after proving that his material damages is existed in the form of royalty fee (license contract) but only 10% or VND 300 million was granted by the court. There was a lawsuit wherein the plaintiff asked the defendant to pay a reasonable fee to hire lawyer nearly 200 million VND but only 39 million VND accepted by the court.

Below is a summary of 5 cases of infringement of intellectual property rights containing claims for damages decided by the courts nationwide before 2012.

Case 1: GEDEON RICHTER Ltd vs. Pharmaceutical Company Limited T.N and Pharmaceutical and Medical Materials Joint Stock Company B.D

First instance judgment No. 275/2006/DSST of March 29, 2006

Court of first instance trial

Ho Chi Minh City People's Court

Case

Ask for stopping unfair competition acts and non-contractual damages

Plaintiff

GEDEON RICHTER Co., Ltd

The accused

Pharmaceutical Company Limited T.N and Pharmaceutical and Medical Materials Joint Stock Company B.D

Summary

- The plaintiff is the owner of Postinor brand for contraceptive drugs protected in Vietnam and granted a visa number VN 0690-95 by the Drug Administration of Vietnam - Ministry of Health

- The defendant produced and circulated POSINIGHT brand birth control products with the same package design and blister packaging similar to the POSTINOR contraceptive brand.

- The defendant was asked to jointly compensate for the plaintiff's loss of income from April 2004 to February 2005 (the time of POSINIGHT was packaged and such packaging was similar to the POSTINOR drug) of US$85,348.60 and the cost of hiring lawyer is US$9,496.59

Judgment of First instance

- Accepting in part the claim for damages, forcing the two defendants to be jointly liable for compensation of US$46,969.68 (equivalent to VND 738,973,975)

- Forcing the defendant to withdraw and destroy infringing packages and stop the infringing acts

Appellate judgment No. 316/2006/DSPT of January 4, 2006

Court of appellate trial

Court of Appeal of the Supreme People's Court in Ho Chi Minh city

Case

Ask for stopping unfair competition acts and non-contractual damages

Appellate judgment

(correction of first instance judgment)

- Do not accept the plaintiff's request.

- Forcing the plaintiff to pay court fee because his claim was not accepted as VND28,514,677

Cassation review decision 29/2009/DS-GĐT September 29, 2009

Court adjudicating cassation

Supreme People's Court

Case

Request for termination of unfair competition acts and compensation for non-contractual damages (protested by cassation by the Chief Justice of the Supreme People's Court under Decision No. 100/KN-DS of March 31, 2009)

Contents of cassation decision

(judgments of appellate and first instance are declared invalid and remand)

The courts of first instance did not base on the provisions of the Civil Code 1995 to determine actual damage, and when settling, its presumption of the amount of POSINIGHT consumed by the defendants was equal to the amount of POTSINOR that the plaintiff is able to consume is not rigidly grounded. While the court of appeal said that the law has not provided for compensation for damages caused by unfair competition acts, from which it dismissed the entire claim of the plaintiff is not true.

The Supreme Court revoked the appellate judgment No. 316/2006 / DSPT and the first-instance civil judgment No. 275/2006 / DSST and requested the Ho Chi Minh City People's Court to re-conduct the first instance trial on the grounds that: The Court needs confirmation. determine the actual damage of the plaintiff to force the defendant to pay compensation in accordance with law

Case 2: T.V.N Co., Ltd. and T.V.N Company Limited

Judgment No. 06/2011 / KDTM-ST dated September 29, 2011

Court of first instance trial

People's Court of Thua Thien Hue province

Case

Infringement of trademark and tradename

Plaintiff

T.V.N Limited Liability Company

Defendant

T.V.N one member limited company

Petition

Request for handling of infringement of Taisun trade name and trademark "Uni Dry" for diaper products in Vietnam

Claims for damages of VND 8,841,905,559 (the plaitiff amended to reduce as VND 3,056,199,196 by himself) including the following expenses:

- Trade name (invested capital of the Company VND 165,750,000,000 x 3%): VND 4,972,500,000

- Trademark name (value of transfer in the first and second quarter of 2010 is (125,000 USD x 19,500 VND / USD): 2,437,500,000 VND

- Cost of anti-counterfeiting support in Thua Thien Hue market surveilance (the company spent): 988,683,193 VND

- Mental loss: VND 50,000,000

- First-instance lawyer fee 4% of the amount accepted by the Court

First instance judgment

1. Suspension of the request to sue infringing upon the rights to trade name Taisun

2. Accepting a part of the plaintiff's claim to sue against the plaintiff's trademark dry Uni trademark rights and compensation for this act is VND 300,000,000 and the attorney's expense is VND 12,000,000 (total plus 312,000,000 VND)

3. Accepting the plaintiff's request to partially withdraw the claim for damages. The corresponding court fee advances shall be remitted into the state fund.

4. Partial dismissal of claimant's claim for trademark infringement compensation is VND 8,841,905,559

5. Regarding court fees

Defendant: VND 15,600,000 (VND 312,000,000 x 5%)

Plaintiff has to pay the court fee (as advanced) to withdraw part of the lawsuit request: 46,561,990 VND [(72,000,000 VND + (2% x 1,056,199,196 VND) x 50%]

Plaintiff bears part of the court fee are not accepted by the court: VND 116,541,904 [(VND 112,000,000 + (0.1% x 4,541,905,559)]

Total: 163,103,894 VND

Case 3: L.V (France) vs. Mr. L.T.C

Judgment No. 727/2011 / KDTM-ST dated May 25, 2011

Court of first instance trial

Ho Chi Minh City People's Court

Case

Infringement of of intellectual property rights

Plaintiff

L.V France

Defendant

Mr. L.T.C, Ho Chi Minh City, Vietnam

Summary:

- L.V is the owner of many protected trademarks in Vietnam for fashion products (bags, pouches).

- The defendant has intentionally traded in products containing marks identical with or indisinguishable to the plaintiff's protected trademarks;

- The defendant’s infringing goods were once detained and imposed fines up to 3 times by the Market Management Team No. 3A in Ho Chi Minh City between December 2009 and July 2010

- After that, the defendant continued to violate

Petition

- Cease and immediate terminate indefinitely any infringement of plaintiff's trademark in any form;

- publicly apologize to the plaintiff in the mass media.

- Claim for material damage to the plaintiff with a total compensation: 48,130,000 VND including 30,000,000 VND + 18,130,000 VND (aggravating circumstances fee)

- Request payment of reasonable expenses for hiring a lawyer: USD 10,000 equivalent to VND 195,000,000

- Request the Court to petition the competent People's Committee to suspend business for 3 months with the defendant

First instance judgment

- Accept the claimant's request, compel the defendant to stop and terminate indefinitely any infringement of the plaintiff's protected trademark; publicly apologize to the plaintiff on a Youth newspaper with the requested content;

- Accept a part of the material damage claim of VND 5,000,000 and the reasonable cost to hire the Plaintiff's lawyer is VND 39,000,000

- Do not accept the Plaintiff's request in petitioning the competent People's Committee to suspend business for a period of 3 months with the defendant;

- Regarding court fees:

Defendant: 2,200,000 VND

Plaintiff: 11,956,500 VND

Case 4: L.V (France) vs. Mr. N.H.P, Ho Chi Minh City, Vietnam

Judgment No. 869/2011 / KDTM-ST of June 16, 2011

Court of first instance trial

People's Court of Ho Chi Minh city

Case

Infringement of intellectual property rights

Plaintiff

L.V (France)

Defendant

Mr. N.H.P, Ho Chi Minh City, Vietnam

Summary:

- L.V is the owner of many protected trademarks in Vietnam for fashion products (bags, pouches).

- The defendant has intentionally traded in products containing marks identical with or indisinguishable to the plaintiff's protected trademarks;

- The defendant’s infringing goods were once detained and imposed fines up to 3 times by the Market Management Team No. 3A in Ho Chi Minh City between December 2009 and July 2010

- After that, the defendant continued to violate

Petition

- Stop and stop indefinitely any infringement of plaintiff's trademark in any form;

- publicly apologize to the plaintiff in the mass media.

- Claim for material damage to the plaintiff with the total compensation: 47,400,000 VND

- Request payment of reasonable expenses for hiring a lawyer: USD 10,000 equivalent to VND 195,000,000

- Request the Court to petition the competent People's Committee to suspend business for 3 months with the defendant

First instance judgment

- Accept the claimant's request, compel the defendant to stop and terminate indefinitely any infringement of the plaintiff's protected trademark; publicly apologize to the plaintiff on a Youth newspaper with the requested content;

- Accepting part of the claim for material damage is VND 10,000,000 and the reasonable cost to hire Plaintiff's lawyer is VND 58,000,000

- Regarding court fees:

Defendant: 3,400,000 VND

Plaintiff: 5,600,000 VND

Case 5: L.V (France) vs. Ms. L.T.H

Judgment No. 855/2011 / KDTM-ST of June 15, 2011

Court of first instance trial

People's Court of Ho Chi Minh city

Case

Infringement of intellectual property rights

Plaintiff

L.V (France)

Defendant

Ms. L.T.H, Ho Chi Minh City, Vietnam

Summary:

- L.V is the owner of many protected trademarks in Vietnam for fashion products (bags, pouches).

- The defendant has intentionally traded in products containing marks identical with or indisinguishable to the plaintiff's protected trademarks;

- The defendant’s infringing goods were once detained and imposed fines up to 3 times by the Market Management Team No. 3A in Ho Chi Minh City between December 2009 and July 2010

- After that, the defendant continued to violate

Request for first instance lawsuit

Requirements of plaintiffs at first instance judgments:

- Stop and stop indefinitely any infringement of plaintiff's trademark in any form;

- publicly apologize to the plaintiff in the mass media.

- Claim for material damage to the plaintiff with the total compensation: 62,070,000 VND

- Request payment of reasonable expenses for hiring a lawyer: USD 10,000 equivalent to VND 195,000,000

- Request the Court to petition the competent People's Committee to suspend business for 3 months with the defendant

First instance judgment

- Accept the claimant's request, compel the defendant to stop and terminate indefinitely any infringement of the plaintiff's protected trademark; publicly apologize to the plaintiff on a Youth newspaper with the requested content;

- Accepting part of the claim for material damage is VND 10,000,000 and the reasonable cost to hire Plaintiff's lawyer is VND 58,000,000

- Regarding court fees:

Defendant: 3,400,000 VND

Plaintiff: 5,600,000 VND

Judgment No. 21/2011 / KDTM-PT of October 27, 2011

Court of Appeal

The Hochiminh-based Bench Court of Supreme People's Court

Case

Infringement of Intellectual property rights

Plaintiff

LV (France)

Defendant

Ms. L. T. H, Ho Chi Minh City, Vietnam

Request for appeal

Due to the appeal of the first instance verdict No. 855/2011 / KDTM-ST of June 15, 2011, the case continued to conduct appellate trial with the following contents:

Defendant's request in appellate judgment:

- Reduce the amount of compensation for material damage to the plaintiff with the total compensation: 10,000,000 VND

- Reduce the amount required to pay reasonable costs to hire a lawyer Total: 58.000.000đ

Appellate judgment

- Do not accept the defendant's appeal, uphold the first-instance judgment on the claim for material damage of VND 10,000,000 and the reasonable cost to hire the Plaintiff's lawyer is VND 58,000,000.

- Regarding court fees:

Defendant: 200,000 VND

Should you have any query, please get in touch with us at vinh@bross.vn or 84-903 287 057

Bross & Partners, a renowned and qualified Patent, Design, Trademark and Copyright agent of Vietnam, constantly ranked and recommended by the Managing Intellectual Property (MIP), World Trademark Review (WTR), Legal 500 Asia Pacific, AsiaLaw Profiles, Asia IP and Asian Legal Business, is providing clients all over the world with the reliable, affordable contentious and non-contentious IP services including enforcement, anti-counterfeiting, litigation regarding trademark, trade name, industrial design, patent, copyright and domain name.

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