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[Part 2/2] 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 lawsuits of infringement of intellectual property rights with claims for damages after the year of 2012

During this period, the noticeable highlight regarding the courts’ position and view is that the amount of claimed damages in the form of lawyers’ hiring expenses granted by the courts up to 630 million VND. By 2015, there was a court accepting claims for actual damages of up to VND 2.2 billion, which the plaintiffs proved that such damages occured in all 3 forms: losses of business opportunities, illegal profits, and cost of hiring lawyers but then being rejected by the appellate court for all the illegal profits claimed over 1.1 billion VND and only a small part of the claim for loss of business opportunity accepted as 22 million VND compared to the claimed number over 430 million VND

It is worth noting in this period that there is a tendency that the plaintiff, after the request for handling of intellectual property rights infringement is made against the defendant by administrative sanctions, continues to bring the case to the court claiming for material damages of VND 500 million and mental damages of VND 50 million but were all rejected by the court.

Another interesting aspect emerged in this period is that while the uniform domain name dispute resolution policy (UDRP) is widely applied in the world by way of arbitration without a mechanism to claim damages, the lawsuit for claiming national domain names .VN in Vietnam may allow the plaintiff not only to succeed in forcing the disputed domain name to be withdrawn, but also to succeed in claiming the defendant (cybersquater) for damages from unfair competition acts under Section 130 of the IP Law as shown in Case 9 below.

Now let’s have a quick look at the next 5 cases with claims for damages heard by courts across the country after the year of 2012.

Case 6: X.L Cosmetics Company Limited vs T.Đ Import Export Trading Co. Ltd.

Judgment No. 1639/2012 / KDTM-ST dated 09/11/2012

Court of first instance trial

People's Court. Ho Chi Minh city

Case

Dispute of intellectual property rights

Plaintiff

X.L Chemical Cosmetics Co., Ltd

Defendant

T.Đ Import Export Trading Co. Ltd.

Brief:

- Plaintiff is the owner of the trademark "Seven two seven, 727 MP Xuan Lan" for cosmetic products and copyright of cosmetic packaging work "727 Xuan Lan" in Vietnam.

- The defendant produced the products on which the signs "727" are affixed;

Petition

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

- publicly apologizing to the plaintiff, correcting the public information on the mass media.

- Claim for damage to the plaintiff with the total compensation: 100,000,000 VND

First instance judgment

- Accepting the plaintiff's request, forcing the defendant to stop all acts of using the sign "727" attached to cosmetic products, in any form; publicly apologize to the plaintiff in the continuous newspaper of Tuoi Tre newspaper, Thanh nien newspaper, Ho Chi Minh City law newspaper as required;

- Compensation for damages to the Plaintiff amount of VND 100,000,000

- Regarding court fees: Defendant: 7,000,000 VND

Inspection cost VND 3,000,000 each bears a half

Case 7: T.V Creative Culture Co., Ltd. Vs. N.V.T individual business household

Judgment No. 05/2014 / DSST dated April 29, 2014

Court of first instance trial

Thanh Tri District People's Court

Case

Claim for non-contractual damages

Plaintiff

T.V Creative Culture Co., Ltd

Defendant

N.V.T individual business household

Brief

- The plaintiff is the copyright owner of the Vietnamese translation of the work "Quang ganh lo di vui song " and "Bay thoi quen cua ban tre thanh dat " in Vietnam

- The defendant has printed illegally, forging the two works above without permission of the plaintiff;

- The defendant was once checked and made minute by the Market Management Team No. 15 in Hanoi, imposed a fine of VND 25,000,000 by the People's Committee of Hanoi city, and his all book and coverpage forced to be confiscated and destroyed

- After that the defendant continued to violate

Petition

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 damages caused by trademark infringement is VND 500,000,000

- Claim for damages caused by loss of honor and prestige of the Plaintiff is 50,000,000 VND

First instance judgment

- Dismiss claims for damages of 550 million VND of the plaintiff

- Regarding court fees: Plaintiff: VND 26,000,000

Judgment No. 184 / DSPT of August 27, 2014

Court of first instance trial

People's Court of Hanoi city

Case

Claim for damages outside the contract

Plaintiff

T.V. Creative Culture Co., Ltd.

Defendant

N.V.T individual business household

Request an appeal

Due to the appeal of the first instance verdict 05/2014/DSST on April 29, 2014, the case continued to hear at the appeal level

Requesting to examine the plaintiffs' evidence of damages to remedy consequences for the case is VND 146,643,000

Appellate judgment

- Do not accept the plaintiff's appeal, uphold the first instance judgment on dismissal of the claim for damages.

- Regarding court fees:

Plaintiff: 200,000 VND

Case 8: ABC Company (France) vs. N.P. Trading Company

Judgment No. 117/2015 / DSST of February 2, 2015

Court of first instance trial

Ho Chi Minh City People's Court

Case

Infringing patents and claiming non-contractual damages

Plaintiff

ABC Company (France)

Defendant

N.P Trading Company Limited.

Brief:

- The plaintiff is the patentee of a patent related to a pesticide belonging to the Clonicotingl group

- The defendant produced and circulated pesticide products bearing the trademark Sespa Gold, Hummer which was allegedly infringed on claims 1, 2, 3, 6, 19 & 20 under Patent 1928 without permission of the plaintiff

Request for first instance lawsuit

Plaintiff's request:

- Stop producing, packaging, distributing, storing, circulating and advertising Sespa Gold branded pesticides

- Terminate the import of raw materials and 2-component additives producing Sespa Gold and Hummer products

- Recall Sespa Gold products

- Withdraw visa from the Plant Protection Department

- Not allowed to register any products containing 2 components Fipronil and Imidacloprid

- Requesting payment of a lawyer fee of VND 200,000,000

- Request a public apology in the newspaper

First instance judgment

- Accept all 7 plaintiffs' requests including accepting to order the defendant to pay the lawyer fee of VND 59,469,750 (the plaintiff changed the compensation amount from VND 200 million to VND 59,469,750)

- Regarding court fee: the defendant must pay the first-instance court fee of VND 2,874,875

Case 9: Company O.S Gmbh (Germany) vs. Mr. N.D.T

Judgment No. 29/2019 / DSST of July 24, 2019

Court of first instance trial

Hanoi City People's Court

Case

Unfair competition related to domain names

Plaintiff

O.S Gmbh (Germany)

Defendant

Mr. N.D.T (Vietnam)

Brief:

- Nguyên đơn là chủ sở hữu hàng loạt nhãn hiệu Osram dùng cho hệ thống và thiết bị chiếu sáng được bảo hộ tại Việt Nam

- Bị đơn đăng ký các tên miền osram.com.vn và osram.vn mà không có sự cho phép của nguyên đơn cấu thành hành vi cạnh tranh không lành mạnh theo điều 130 Luật SHTT

- The plaintiff is the holder of a series of Osram trademarks covering lighting systems and equipments in Vietnam

- The fact that defendant registered the domain names osram.com.vn and osram.vn without the plaintiff's permission constituted an act of unfair competition under Section 130 of the IP Law

Request for first instance lawsuit

Yêu cầu của nguyên đơn:

- đề nghị tòa tuyên thu hồi 2 tên miền osram.com.vn và osram.vn để ưu tiên quyền đăng ký 2 tên miền này cho nguyên đơn

- Buộc bị đơn bồi thường thiệt hại về tài sản, giảm sút thu nhập và lợi nhuận cũng như cơ hội kinh doanh, cụ thể đề nghị tòa buộc bị đơn bồi thường 500.000.000đ là hậu quả của hành vi cạnh tranh không lành mạnh do bị đơn gây ra cho nguyên đơn

- Buộc bị đơn thanh toán phí luật sư 200.000.000đ

- Yêu cầu xin lỗi công khai trên các phương tiện thông tin đại chúng

Plaintiff’s request:

- request the court to withdraw 2 domain names osram.com.vn and osram.vn so as to prioritize the right to register these 2 domain names for the plaintiff

- Forcing the defendant to pay compensation for property damage, loss of income and profits as well as business opportunities, specifically requesting the court to force the defendant to pay VND 500,000,000 as a result of unfair competition acts. caused by the defendant

- Forcing the defendant to pay the lawyer fee of VND 200,000,000

- Request a public apology on the mass media

First instance judgment

- Accept the plaintiff's request for action

- Recall national domain names osram.com.vn and osram.vn

- Priority is given to the plaintiff who is allowed to register to register the above two national domain names within 15 days from the time the judgment takes effect.

- Forcing the defendant to pay the plaintiff a total of VND 203,960,000

- Forcing the defendant to post a public apology

Regarding court fee: the defendant has to pay the first-instance court fee of 10,198,000 VND

Case 10: K.Đ Pharmaceutical Co., Ltd. vs C.V.S.V Joint Stock Company

Judgment No. 32/2015 / KDTM-ST of July 17, 2015

Court of first instance trial

Hanoi City People's Court

Case

Requesting termination of trademark infringement and non-contractual damages compensation

Plaintiff

K.Đ Pharmaceutical Co. Ltd.

Defendant

C.V.S.V Joint Stock Company

Summary:

- Plaintiff is the holder of SEFTRA trademark (after being acquired through a transfer contract registered with the NOIP) under the GCNKNH No. 81173 pertaining to the pharmaceutical product in class 05

- The sign of infringement "XEXtra" on the defendant's pharmaceutical box was concluded by the infringement inspection agency is an infringement element of the trademark of SEFTRA

Request for first instance lawsuit

Plaintiff's request:

- Stop the trademark infringement of the plaintiff;

- Publicly apologize to the plaintiff on the mass media.

- Claim for damages caused by trademark infringement is VND 2,230,595,000

- The defendant did not accept the plaintiff's request and at the same time filed a counterclaim that forced the plaintiff to pay 61,400,000 VND and had to correct his apology.

First instance judgment

- Chấp nhận yêu cầu khởi kiện của nguyên đơn, buộc bị đơn chấm dứt hành vi xâm phạm và đăng lời xin lỗi trên báo

- Về yêu cầu bồi thường thiệt hại đối với 3 dạng tổn thất thực tế gồm: (a) tổn thất về cơ hội kinh doanh: 431.595.000đ, (b) lợi nhuận bất hợp pháp: 1.169.000.000đ, và (c) chi phí thuê luật sư: 630.000.000đ, tổng cộng là 2.230.595.000đ

- Không chấp nhận yêu cầu phản tố của bị đơn và yêu cầu cải chính xin lỗi

- Về án phí, buộc bị đơn chịu 76.000.000đ án phí sơ thẩm và 4.611.000đ án phí đối với yêu cầu phản tố không được chấp nhận

- Accept the plaintiff's petition, force the defendant to stop the infringement and post an apology in the newspaper

- Accept claims for damages for three types of actual losses: (a) loss of business opportunities: 431,595,000 VND, (b) illegal profits: 1,169,000,000 VND, and (c) ) Attorneys' expense: VND 630,000,000, totaling VND 2,230,595,000

- Do not accept the counter-claim of the defendant and request the rectification of apology

- Regarding the court fee, the defendant was forced to pay 76,000,000 VND of first-instance court fee and 4,611,000 VND of court fee for counter-claims that were not accepted.

Judgment No. 37/2017 / KDTM-PT of February 27, 2017

Court of appellate trial

High People's Court in Hanoi

Case

Requesting termination of trademark infringement and claim for non-contractual damage liability (appealed)

Plaintiff

K.Đ Pharmaceutical Co. Ltd.

Defendant

C.V.S.V Joint Stock Company

Content of the appeal

The defendant claimed that he did not infringe upon the plaintiff's trademark SEFTRA because the trademark has been invalid due to non-use in Vietnam.

The court of first instance calculated wrongly the profit because it had not deducted the costs and taxes for 45,500 tablets of Sextra

Requesting the court to clarify the actual cash expenditure of lawyer fee of VND 630,000,000

Appellate judgment

- accepting part of the defendant's appeal, correcting the first instance judgment whereby only accepting loss of business opportunity is VND 22,191,309 and the cost of hiring a lawyer is VND 630,000,000 or a total of VND 652,191,309.

- Do not accept counterclaims, do not accept the request for correction and apology in the newspapers claimed by the plaintiff and defendant

- Regarding court fees, the plaintiffs has to pay VND 59,352,111, defendants has to pay VND 30,087,652 and VND 3,070,000 of counterclaims which are not accepted.

Should you have any query, please get in touch with us at vinh@bross.vn or 84-903 287 057; Wechat: wxid_56evtn82p2vf22; Skype: vinh.bross

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 1000), 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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