What’s important to note about the civil proceedings to resolve IP related disputes in Vietnam?
1. Can cancellation outcome be used as a ground to retry a court case in Vietnam?
Judicially, in Vietnam, two routes for reviewing a court’s final judgment, namely, (i) in case such judgment can be shown to be based on a severe error of law, it can go through the process of cassation, where the judgment will be reviewed and possibly annulled due to the material error in the procedure and (ii) where, on the other hand, new evidence or facts are discovered that could have affected the outcome of the case.
In a recent court case pertaining to an alleged infringement of utility solution patent for a shaped aluminium bar, in defense, the defendant filed a cancellation action against the patent rights on which a lawsuit was based. While the cancellation was going on at the IP Office of Vietnam (“IP Vietnam”), the Court issued a first instance judgment in favor of the plaintiff, asking the defendant to make a public apology and pay damages for its infringement of the patent. The appellate court then denied the defendant’s appeal and upheld the first instance judgment. The IP Vietnam, after reviewing the cancellation petition submitted by the defendant, issued a cancellation decision against the patent in question. With this cancellation decision, the defendant filed a petition asking the court to review the case under the procedure of retrial. Taking into account that the IP Vietnam’s cancellation decision was a new fact, the Supreme People’s Court ruled that the case should be retried. The Supreme People’s ruling, despite containing no guidance or analysis, it is construed that Court automatically considered the IP rights cancellation as a new fact and thus cancelled the entire first instance judgment as well as the appellate verdict, handing the case back to the first instance court for retrial. This ruling by Supreme People’s Court may set an interesting precedent for future intellectual property disputes.
2. Can foreign expert opinions in support of a patent infringement claim be accepted by the Court?
In a recent court case heard by a court in Vietnam, to prove a patent infringement, given that chemical substance protected under a patent could only be identified by x-ray diffraction, the plaintiff sent a sample of the alleged patent infringing abroad for analysis, as no machines were qualified to carry out such work in Vietnam. The plaintiff, upon receipt of the analysis results, submitted it alongside a request for assessment of likelihood of patent infringement to the Vietnam Intellectual Property Research Institute (“VIPRI”), a Vietnamese state independent assessment body in charge of rendering expert opinion/expert witness. Based on the analysis from the abroad, upon reviewing the case, the VIPRI opined that the assessed product was deemed to be identical to the patented substance, and thus infringing. The defendant then requested the Court to dismiss the opinions of foreign experts. However, However, while preparing for the trial, the court consulted the assessment agency and the agency replied that it could refer to any documents it deemed appropriate, including this expert opinion from abroad, within the scope of its jurisdiction.
The court has accepted the VIPRI opinion which is mainly predicated on the analysis from foreign experts to hear the case. This may serve as a precedent for other Vietnamese enforcement authorities to consider in similar cases.
3. Whether the Vietnamese Court would stay the proceedings when the IPR is in the course of cancellation/invalidation process?
In a patent court case heard by a Vietnamese court recently, the defendant had filed a cancellation action against the patent right before the trial opened, based on which, he requested the court to suspend the case on the grounds of the 2015 Civil Procedure Code. Given that this is an IPR-based court case, the Court made a comparison the Civil Procedure Code to the Law on Intellectual Property to determine which law should prevail in considering whether to suspend the case. Both the court and the procuracy eventually agreed that the Law on Intellectual Property should prevail, because it is a specialized law in relation to the general law of the Civil Procedure Code. Accordingly, given that no provisions are set out in the Law on Intellectual Property requiring the court to suspend the case, the Court dismissed the defendant’s motion, moving forward with the trial and issued a verdict.
As such, the Vietnamese court could rely on the foregoing court case for hearing other similar cases in Vietnam because the cancellation proceedings the IP Vietnam often takes a very long time to be concluded. If the courts insist on waiting for cancellation decisions before issuing judgments in IP dispute cases, the plaintiffs may face a very long wait indeed.
4. Can the successful party to an action involving patent litigation recover its costs in Vietnam?
Under Vietnam IP Law, the plaintiff can recover reasonable legal fees as well as actual damages. Damages will be determined on the basis of the actual losses suffered by the patent holder. The damages can include the following:
– Material damages, including loss of property, decrease of income and profits, loss of business opportunities, and reasonable expenses for the prevention and remedy of these damages.
– Spiritual damages, including loss of honor, dignity, prestige, or reputation, and other spiritual damages.
The compensation can be calculated using one of the following methods:
– An amount of money equivalent to the total material damage and the profits gained by the defendant from the act of infringement if the reduced profits of the claimant have not yet been included in the total material damage.
– The value of the licence of the patent on the presumption that the defendant had been licensed by the claimant to use the patent under a licence agreement within the extent equivalent to the infringing act committed.
If the rate of compensation cannot be determined/quantified (based on usual grounds, such as monetary damages incurred by the plaintiff, or the price of the assignment of IP rights if the defendant is an assignee), under Article 205.1(c), Vietnam IP Law, the court is entitled to set an arbitrary compensation (or statutory compensation) of not more than VND 500 million (approx. US$ 24,000). Attorney fees for the court action can, in principle, be recovered.
Kindly note that punitive/exemplary damages are not available under Vietnam IP Law. If the plaintiff does not prevail in the suit, the defendant is entitled to claim the legal fees that it spends on the suit.