From Proving Rights to Claiming Damages: Three Intellectual Property Precedents Businesses Should Know

in Copyright, IP Practice, News, Newsletters/ Publications, Notable Articles

For many years, the greatest obstacle facing businesses operating in Vietnam—from software companies and content creation studios to manufacturers and distributors of consumer goods—has been not detecting infringement, but translating evidence of infringement into claims that courts will uphold. Intellectual property (IP) rights holders frequently encounter two particularly difficult challenges when bringing cases before the courts: the difficulty of quantifying intangible losses and the paradox of the burden of proof.

The adoption of three IP precedents by the Judicial Council of the Supreme People’s Court on 24 September 2026 marks an important step towards consistent application of the law and greater predictability in the judicial resolution of IP disputes. These precedents go beyond resolving individual disputes to directly address practical challenges in IP management and litigation: the basis for determining damages for software copyright infringement; the burden of proving copyright ownership when contrary evidence emerges; and the determination of the appropriate criminal charge for infringement of industrial property rights.

THREE INTELLECTUAL PROPERTY PRECEDENTS: LEGAL ISSUES AND IMPLICATIONS FOR BUSINESSES

The following table summarizes information on the adoption of the three precedents and the available draft texts. The content and scope of application should be verified against the officially published versions.

Issue	Obstacle to be Resolved	Solution in Draft Precedent	Impact and Recommendations for Businesses
Damages for Software Copyright Infringement	Difficulty in quantifying damages when software is copied or used unlawfully; needing a reliable legal basis for the compensation claim.	Use the license fee for the software under the most recent actual transaction before the infringement occurred as the basis for determining damages in the circumstances considered.	Rights Holders: Retain licensing contracts and transaction execution records; explain the correspondence between the license package and the scope of infringement. Software Users: Review licenses, device counts, and scope of use to assess potential compensation exposure.
Proving Copyright When Opposing Evidence Exists	Determining the evidentiary value of a Certificate of Copyright Registration when a disputing party produces documents showing prior creation or publication of the work.	When opposing evidence is presented in the considered situation, the party relying on the copyright registration certificate must establish its copyright ownership in relation to the disputed part of the work.	Proactively maintain creation records and chain-of-title documentation: drafts, original files, edit histories, publication records, job assignments, and rights transfers. When obtaining a license, verify the licensor’s legal foundation of rights.
Criminal Liability for Infringement of Industrial Property Rights	Determining the grounds for applying Article 226 of the Criminal Code to acts of trading counterfeit trademarked goods; avoiding the conflation of all trademark infringements with criminal offenses.	In the selected case, the court determined that the conduct constituted the crime of infringing industrial property rights. Application of the provision must be assessed in light of counterfeit goods, intentional fault, and the statutory conditions for criminal prosecution.	Trademark owners: Prepare evidence addressing each element that must be established. Manufacturers and distributors: Verify product sources, trademark authorization, and supplier records. Do not assume that an infringement will result only in administrative penalties or civil damages.

1. Damages for Software Copyright Infringement: Actual Licensing Fees as a Basis for Assessing Loss

Previously, when discovering that a partner, contractor or another business was using unlicensed computer software, claimants often struggled to prove “actual losses” or “lost profits” under Article 205 of the IP Law. Software is a digital asset that can be copied instantly without depleting the original, making judges cautious about accepting damages calculations prepared by claimants themselves.

Judicial guidance from the draft precedent: The Supreme People’s Court offers a practical approach: courts may determine damages by referring directly to the licence fees stipulated in actual licensing agreements most recently concluded before the infringement occurred.

Commercial implications:

This principle is comparable to assessing damages based on a reasonable royalty, but must be understood and applied within the Vietnamese legal framework.
For technology and software businesses offering solutions such as B2B SaaS, CAD/CAM and graphics software, actual commercial agreements, official published price lists and issued invoices become important evidence of the value of the right to use the software.
For businesses using software, exposure extends beyond administrative penalties: they may also face substantial damages based on appropriate licensing benchmarks. The underlying judgment awarded more than VND 1.6 billion in damages, demonstrating that reviewing software licences and controlling software installations are practical measures for managing financial risk.

2. Copyright: A Registration Certificate Is Not the “Only Legal Tool”

A widespread misconception among Vietnamese businesses is that “registering copyright and obtaining a Copyright Registration Certificate from the Copyright Office of Vietnam guarantees victory in court.” Many individuals and competitors have exploited a registration procedure based primarily on formal examination to submit unfounded applications, then threaten or bring counterclaims against the genuine authors or parties that funded the creation of the works.

Judicial guidance from the draft precedent: The precedent reaffirms a fundamental principle of the IP Law and the Berne Convention: copyright arises automatically when a work is created and fixed in a tangible form. A Copyright Registration Certificate provides only an initial, rebuttable legal presumption. Where a disputing party presents credible evidence to the contrary showing that the work was created, completed or lawfully published earlier, the court will examine the original evidence of the creative process to rebut the presumption arising from that certificate.

Clarifying the Recovery of Lawyers’ Fees: Alongside clarifying the nature of copyright, this precedent establishes a clear legal framework for the successful party to recover reasonable lawyers’ fees actually incurred under Article 205(3) of the IP Law, provided that these are fully supported by legal services agreements, proof of payment and valid invoices.

3. Trademark Enforcement: Criminal Risks Arising from “Trading in Goods Bearing Counterfeit Trademarks”

Many businesses and household businesses have long operated on the assumption that they can design logos resembling major brands or adopt partially overlapping trade names to gain a market advantage – and that, if their goods are inspected and seized, the consequences will be limited to administrative fines or civil damages of a few tens of millions of Vietnamese dong. They believe that criminal prosecution applies only to the production of “substandard counterfeit goods”.

Judicial guidance from the draft precedent: The selected case clarifies the application of Article 226 of the Criminal Code, which concerns the offence of infringing industrial property rights, to trading in goods bearing counterfeit trademarks. The key point for businesses is that goods do not have to be of inferior quality for criminal liability to arise. Intentionally trading in goods bearing counterfeit trademarks protected in Vietnam may lead to criminal prosecution where the statutory conditions are met.

Legal distinctions to understand: Not every product bearing a sign that resembles another brand constitutes a criminal offence. It is necessary to establish whether the goods qualify as goods bearing counterfeit trademarks, whether the conduct was intentional, and whether it satisfies the requirements concerning commercial scale or the thresholds for illicit profits, losses suffered by the rights holder, or the value of the infringing goods. The appropriate criminal charge must be determined by the nature of the conduct and the specific evidence.

Commercial implications: Businesses should not treat fines as a predictable cost of continuing to trade in goods bearing counterfeit trademarks. Where the elements of the offence are established, individuals may face imprisonment, while commercial legal entities may incur criminal liability if the applicable conditions are met. Verifying the source and authenticity of goods and the legal basis for using trademarks should therefore form part of supplier selection and distribution controls.

4. Trademark Enforcement: Criminal Liability for Dealing in Counterfeit Trademark Goods

Many businesses and individual traders have long operated under the assumption that adopting a logo resembling a major brand or using a partially identical trade name to capitalize on market recognition will result, at most, in administrative penalties or civil damages amounting to a few tens of millions of VND if the goods are inspected and seized. They believe that criminal prosecution applies only to the manufacture of “fake goods of inferior quality”.

Judicial approach under the draft precedent: The selected case clarifies the application of Article 226 of Vietnam’s Criminal Code, which criminalizes infringement of industrial property rights, to the commercial dealing in counterfeit trademark goods. The key point for businesses is that goods do not have to be of inferior quality for criminal liability to arise. The intentional commercial dealing in goods bearing counterfeit trademarks protected in Vietnam may result in criminal prosecution when the statutory conditions are satisfied.

Understanding the legal boundaries: Not every product bearing a sign that merely resembles another brand constitutes a criminal offense. It is necessary to determine whether the goods qualify as counterfeit trademark goods, whether the requisite intent exists, and whether the statutory thresholds relating to commercial scale, unlawful profits, damage to the rights holder, or the value of the infringing goods are met. The classification of an offense must be based on the nature of the conduct and the specific evidence available.

Commercial implications: Businesses should not treat fines as a predictable cost of continuing to trade in counterfeit trademark goods. Where all elements of the offense are established, individuals may face imprisonment, while commercial legal entities may also incur criminal liability if the applicable statutory conditions are met. Verifying product sources, product authenticity, and the legal basis for trademark use should therefore become integral parts of supplier selection and distribution control procedures.

Conclusion:

The three adopted intellectual property precedents address issues of direct relevance to businesses: what evidence is needed to establish ownership of IP rights, on what basis damages may be claimed, and when infringement may give rise to criminal liability. Clarifying how these issues should be resolved contributes to greater predictability in litigation, providing businesses with a firmer basis for choosing strategies to protect their rights and manage risks.

For businesses, this is the time for a shift in mindset. Intellectual property rights are no longer merely a matter of administrative formalities; they have become core strategic assets. A clear understanding and effective application of the principles established by these new precedents will help businesses proactively safeguard their creative achievements while protecting their lawful rights and interests against legal risks and exposure to criminal liability in their business operations.

QUAN, Nguyen Vu | Partner, IP Attorney

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