Section 199 of the 2005 Vietnam IP Law as amended in 2009 provides for that any organization or individual who commits an act of infringement of the intellectual property rights of another organization or individual shall, depending upon the nature and seriousness of such infringement, be dealt with by the application of civil, administrative or criminal remedies.
Since IPRs including exclusive right over a registered trademark or over a patented industrial design are private rights, thus, IPR holder and IPR infringer may out-of-court deal with the infringement with an amicable measure, e.g. the infringer voluntarily signs an undertaking letter whereby the latter stops using the infringing trademark without condition. In return, IPR holder would not proceed with any lawsuit or any legal action against the infringer. Below are the merits and demerits of the above remedies in practice in Vietnam
Dealing with the Infringer by an Amicable Measure
- Quickly handling the infringement through the infringer’s undertaking to stop the use of the disputed IPRs without condition
- Cost for enforcement of IPR holders’ right is much lower than other remedies.
- Almost useless where dealing with the infringement occurred in medium or big volume and/or large scope of geographical area
- Low-effective where the infringer has deliberately infringed
- High possibility that the infringer would repeat offence because of easily gaining profit illegally.
Settling the Infringer by Administrative Remedy
Pursuant to Section 211 of the IP Law the acts of infringement of industrial property rights shall be subject to administrative penalties comprise: (a) acts of infringement of intellectual property rights which cause loss and damage to consumers or society, (b) failure to terminate an act of infringement of intellectual property rights although the intellectual property right holder has issued a written notice requesting termination of such act, (c) producing, importing, transporting or trading in intellectual property counterfeit goods stipulated in Section 213 of this Law (see the bottom part of this article), or assigning others to do so, and (d) producing, importing, transporting or trading in articles bearing a mark or geographical indication which is identical or confusingly similar to a protected mark or geographical indication, or assigning others to do so.
- Many IPRs enforcement agencies having authority, any of which IPR holder may select, to deal with the infringement include such as inspectorates, market management offices, police offices, custom offices and People’s Committees of district and provincial level;
- Timeline for completion of a case is considerably swift, i.e. it may take 1-2 months;
- Highest fine level may be applied up to 500,000,000VND (approximately 24,000USD);
- Legal basis to determine infringement, punishment ranks and forms, preventive measures, consequence overcoming measures are clear.
- No claim for damage compensation is accepted when dealing with the IPRs infringement by administrative sanctions;
- The infringer easily tends to resume infringing after his infringement act has been administratively fined.
- Regardless of the highest fine that may be applied, in some cases, if the infringer estimates that his gained profit through the use of trademark identical or confusingly similar with IPR holder’s registered trademark is much bigger than the administrative fine then he may be willing to repeat offence because his administratively fined act, if being repeated by him, would no longer fall into the basic criminal components under Section 171 as revised of the 1999 Penal Code as amended in 2009 (see the bottom part of this article)
Initiating a Civil Lawsuit against the Infringer
Civil remedies in stipulated in Section 202 of the IP Law, thereby courts may apply the following civil remedies in dealing with organizations and individuals who have committed acts of infringement of intellectual property rights: (a) compulsory termination of the infringing acts, (b) compulsory public apology and rectification, (c) compulsory performance of civil obligations, (d) compulsory payment of damages for loss, and (e) compulsory destruction, distribution or use for non-commercial purposes of goods, raw materials and materials, and facilities used principally for the production or trading of goods which infringed intellectual property rights, provided that such destruction, distribution or use will not affect the exploitation of rights by intellectual property right holders.
During last years the number of IPR related cases brought at courts nationwide are recognized not many. There are three main reasons to explain this phenomenon, firstly the litigation process takes long and/or may prolong through multiple levels of hearing, e.g. from court of first instance, appellate court or supreme court, secondly costly litigation expenses, and thirdly the IPR holders’ habit and psychology of use of administrative remedy.
- Bringing a case before a court is only route for IPR holder to claim damage compensation in IPR related lawsuit
- Unlike the administrative remedy where IPR holder and allegedly infringing party have almost no chance to cross-exchange and assess evidence of infringement or arguments of non-infringement, in the court proceedings, these parties have more time and opportunities to prove the existence of IPRs infringement act or failure to violate those IPRs.
- Litigation procedures may be relatively complex and extensible, i.e. from first instance trial, appellate trial to judgment execution, thus a valid verdict of a lawsuit normally takes longer than administrative sanctions (approximately from 1,5 to 2 years)
- Expenditures for taking part in litigation are commonly much higher than the administrative measure.
Requesting for the Application of Criminal Remedy against the Infringer
As provided in Section 212 of the IP Law, if any individual who commits an act of infringement of intellectual property rights which has satisfied a criminal element shall be criminally prosecuted in accordance with the criminal law. Kindly note that under the 1999 Penal Code as revised, the criminal responsibility is not applicable for an entity or an organization.
The definition “counterfeit goods” is the first time defined comprehensively and fully in Decree 185/2013/ND-CP of November 15, 2013 coming into force as of January 1, 2014, whereby counterfeit goods may, inter alia, comprise (a) goods having quantitative contents of either main ingredients or nutritional substance or other basic technical characteristics merely reach 70% downward in comparison with quality specification or technical standard as registered, announced for use or information mentioned in labels, goods package; and (b) Intellectual property counterfeit goods under the Section 213 of the IP Law, meaning that goods or their packages bearing a mark or sign which is identical with or indistinguishable from a mark or geographical indication currently protected for those very goods, without permission from the mark owner or organization managing the geographical indication.
The terms ”on a commercial scale” and “intentionally infringe”, compulsorily criminal components under Section 171.1, are construed in a narrow manner by Joint Circular 01/2008/TTLT-TANDTC-VKSNDTC-BCA-BTP of February 29 2008, issued by the People’s Supreme Court, the Supreme People’s Procuracy, the Ministry of Security and the Ministry of Justice (“Joint Circular 01/2008”). Particularly, it states that those who, for business purposes, intentionally commit of one of acts of infringing upon
industrial property rights involving goods with counterfeit marks specified in Section 213 of the IP (see below) and fall into one of the following cases will be considered “having caused serious consequences” and examined for penal liability for the crime of “infringing upon industrial property rights” under 171.1 of the Penal Code:
- gaining profits of between D10 million and D50 million;
- causing material loss to the rights holder of between D50 million and D150 million; and
- trading in counterfeit goods valued at between D50 million and D150 million.
Please be noted that under Section 105.1 of the Criminal Procedure Code, criminal responsibility imputation will only be carried out at the request of mark owners or geographical indication-managing organizations.
Section 171.1 of the Penal Code – Crime for Infringing upon industrial property rights (excerpted and now in force) sets out “Those who intentionally infringe upon industrial property rights to marks or geographical indications currently under protection in Vietnam on a commercial scale, shall be imposed a fine of between fifty million and five hundred million dong or subject to non-custodial reform for up to two years”
Section 156.1 of the Penal Code - Crime for manufacturing and/or trading in fake goods (excerpted and now in force): “Those who manufacture and/or trade in fake goods equivalent to the quantity of genuine goods valued between thirty million dong and under one hundred fifty million dong, or under thirty million dong but causing serious consequences or who have been already administratively sanctioned for acts defined in this Article or any of Articles 153, 154, 155, 157, 158, 159 and 161 of this Code or have already been sentenced for one of these offenses but not yet entitled to criminal record remission and repeat the violation, shall be sentenced to from six months to five years of imprisonment”.
Section 213 of the IP Law - Intellectual property counterfeit goods (excerpted and now in force):
- Intellectual property counterfeit goods regulated in this Law comprise goods bearing counterfeit marks and goods bearing counterfeit geographical indications (hereinafter referred to as counterfeit mark goods) defined in clause 2 of this article and pirated goods defined in clause 3 of this article.
- Counterfeit mark goods means goods or their packages bearing a mark or sign which is identical with or indistinguishable from a mark or geographical indication currently protected for those very goods, without permission from the mark owner or organization managing the geographical indication.