Dealing with Trademark Infringement in Vietnam: Civil Lawsuit or Administrative Sanctions?

Founding Partner Le Quang Vinh – Bross & Partners

Email: vinh@bross.vn

Vietnam IP legislation allows rights holders to initiate civil lawsuits (civil remedies) or request administrative sanctions (administrative remedies) against infringement of their trademarks. Bross & Partners below summarizes 8 legal characteristics of civil remedies and administrative remedies.

1. Wide scope and subjects for remedies. Stakeholders can demand that administrative or civil remedies be applicable against the infringement of a registered trademark, trading in fake commodities, counterfeit trademark goods, unfair competition practice, or even against copyright infringement (since the infringed trademark itself can sometimes be a work of applied art).[1]

2. Fines will be confiscated if administrative measures are used. In addition to supplementary penalties (eg. confiscation of counterfeit trademark goods, suspension of business operations), remedial measures (eg. forcing removal of infringing elements, forcing destruction of counterfeit trademark goods) that are applied, the infringer may be subject to the main sanction of a fine (maximum 500 million VND at maximum for an organizational infringer) but this amount must be paid into the State treasury, not given to the right holder.

3. Administrative measures mean handling of an act against the State economic management order, while civil measures mean protection of civil rights. Regardless of whether a case of infringement of a trademark has been handled or is being handled by administrative measures or criminal proceedings, the rights holder can still sue requesting the court to force the infringer to compensate them for damages because civil remedies are independent measures for rights holders for the purpose of securing their IP rights as civil rights.

4. Trademark infringement is always considered as an “intellectual property rights dispute" in civil proceedings. The 2015 Civil Procedure Code does not distinguish between trademark infringement and trademark disputes when initiating civil cases. Therefore, for large-scale or serious trademark infringement cases, rights holders should combine the use of both administrative and civil measures to claim compensation for damages. Even in cases where the infringer is prosecuted for criminal liability under Article 226 of the 2015 Penal Code,[2] the rights holder has the right to request the court to force the defendant to pay compensation for civil damages in the criminal case. If there are not enough conditions to prove damages, the court can be asked to separate the civil part from the criminal case to resolve it according to civil proceedings.

5. The plaintiff has the burden of proving damages. Damage caused by trademark infringement must be proven to have occurred in accordance with one of four statutory calculation methods:

(a) Total physical damage in money plus the profits that the defendant has earned.

(b) The price for transferring the license to use the trademark assumes that the defendant receives the license from the plaintiff according to the trademark license contract.

(c) Other calculation methods proposed by the right holder in accordance with the law.

(d) The court may decide on its own the amount of compensation but not more than 500 million VND for material damage only when the damage cannot be determined according to the above three methods.

6. Attorney fees may be additionally claimed. The right holder can additionally claim attorney fees and other reasonable costs used to prevent and remedy the damage (getting expert opinion, cost for remedy and prevention of infringement).

7. Right to defense by the infringer. A suspected infringer is still permitted by law to exercise the right to defend,  refute the infringement allegation by submitting an explanation in an administrative proceedings or a written statement of the defendant's opinion in a civil proceeding proving that his/her accused trademark does not contain infringement elements, or that his/her goods bearing the accused trademark are parallel imported goods (grey goods), or that the accused trademark is merely descriptives of use, value, geographical origin of the product, or that his/her use of accused trademark is nominative fair use.[3] Where there is enough relevant evidence, the infringer should quickly initiate an administrative lawsuit to cancel VNIPO’s decision of grant of protection or file an application for revocation of the right holder's registered trademark.

8. File a civil lawsuit or counterclaim against abuse of intellectual property rights. Misuse of IP rights enforcement is an act that unreasonably interferes with fair free trade, may cause harm to the defendant, and healthy competition order. If damage suffered by the defendant is proven, he/she has the right to request the court to force the plaintiff to compensate for damages caused by such abuse, including compensation for attorney's fees. The defendant can also request the court to force the plaintiff to pay him or her the reasonable costs of hiring a lawyer if the defendant is found by the court to have not infringed the plaintiff's trademark in a trademark infringement lawsuit brought by the plaintiff.

Bross & Partners, an intellectual property company ranked Tier 1 in 3 consecutive years (2020-2022) by Legal 500 Asia Pacific, has rich experience in resolving complicated IP disputes including trademarks, copyrights, patents, plant varieties in Vietnam and abroad.

Please contact: Vinh@bross.vn; mobile: 0903 287 057; Zalo: +84903287057; Skype: vinh.bross; Wechat: Vinhbross2603; linkedin: (4) Le Quang Vinh | LinkedIn.