Level of compensation for damage when infringing intellectual property rights in Vietnam

Determining the level of compensation for damage caused by infringement of intellectual property rights is extremely necessary. Cases of infringement of intellectual property rights; have caused material and spiritual losses to the right holder. So when the owner is infringed, it requires handling such acts; What grounds will the court use; to determine the extent of damage and calculate the amount of compensation? Below is the content of the above issue of Lawyer X.

Legal grounds

• Civil Code 2015
• Law on Intellectual Property 2005 Amended and Supplemented 2019
• Joint Circular No. 02/2008/TTLT-TANDTC-VKSNDTC-BVHTT

For physical damage

Where the plaintiff can prove, that there is clear evidence of the infringing material value

In case the plaintiff proves that the act of infringing upon intellectual property rights has caused material damage to him; then has the right to request the Court to decide the level of compensation on one of the following grounds:

– Total physical damage in monetary terms plus profits earned by the defendant from committing acts of infringing intellectual property rights; if the claimant’s reduced profit has not been included in the total physical damage.

• When determining the profits that the defendant has earned from committing acts of infringement; must take into account the expenses incurred by the defendant; to be able to deduct this amount from the defendant’s gross revenue; or determine a portion of the respondent’s profits as revenue from other activities unrelated to the infringement; if.
• Total revenue of the defendant is calculated on the basis of all invoices and vouchers for selling products; or use of the work infringes upon the intellectual property rights of the plaintiff; that the defendant did.
• The court determines the defendant’s profit; after deducting all expenses from the defendant’s gross revenue.
• Only the profit earned by the defendant from committing acts of infringing upon intellectual property rights to the total monetary damage of the plaintiff; Provided that the reduced profit of the plaintiff has not been included in the total physical damage.

– The price for the transfer of the right to use the intellectual property object with the assumption that the defendant; be transferred by the plaintiff the right to use that object under the contract to use the intellectual property object to the extent corresponding to the infringing act committed. The right transfer price is determined in one of the following ways:

• It is the amount to be paid if the person with the right and the person infringing the freedom agree; to sign a contract to transfer the right to use the object of such intellectual property right (reasonable royalty fee, license fee). The main act of infringement is the act of using the object of intellectual property rights;
• The price for transferring the right to use the assumed intellectual property object; determined by the method of determining the amount; to which the obligee (the plaintiff) and the assignee (the respondent); may have agreed at the time of the infringement; if the parties voluntarily agree on such amount;
• Based on the licensing price of the right to use the intellectual property object applied in the respective field as stated in the previous licensing practices of the right to use the intellectual property object (such as the Using an intellectual property object in the respective field has previously been paid or secured before the infringement occurred, the fee is widely accepted as reasonable, uniformly applied in Vietnam… ).

In case the amount of compensation cannot be determined

In case it is not possible to determine the level of compensation for material damage; then the level of compensation for material damage shall be fixed by the Court (statutory damages); depending on the extent of the damage; the minimum compensation level is not less than five million dongs and the maximum is not more than five hundred million dongs. The court shall only apply the statutory level of compensation in cases where it is impossible to determine the compensation level for material damage of the application of the raw material on the above grounds.

To ensure a reasonable compensation decision, suitable to each specific case; protect the legitimate rights and interests of the victims; The court must base on the nature; the degree of copyright infringement; Specifically related rights are as follows:

• Circumstances and motives for infringement (infringement by intention; unintentionally; by being controlled; or by being physically and mentally dependent; first time trespassing, re-offending);
• How to commit acts of infringement (individual infringing; organized; self-compete; bribing, deceiving; forcing others to commit infringing acts);
• Scope of territory, time, volume, and scale of committing acts of infringement (in the area of ​​one district of one province; many districts of many different provinces; long or short time; large or small volume); commercial scale…);
• Effects and consequences of the infringing act (domestic and international influence on the honor, dignity, prestige, and reputation of the right holder; material consequences for the right holder).

Note: Courts must base themselves on each object of infringing intellectual property rights; to determine the level of compensation for material damage according to the statutory damages. If in the dispute many objects of intellectual property rights are infringed; then the general compensation level for all those objects must not exceed 500 million dongs.

For mental damage

In case the plaintiff proves that the act of infringing upon intellectual property rights has caused him mental damage; then have the right to request the Court to decide the compensation level between five million dongs and fifty million dongs; depending on the extent of the damage.

Note: In addition to two compensation for physical damage and mental damage; intellectual property rights holders have the right to request courts; forcing organizations and individuals to commit acts of infringing upon intellectual property rights; must pay reasonable costs to hire a lawyer.

Please see more:

• Instructions for exclusive registration of company logos in Vietnam
• Service of changing the legal representative of Vietnamese enterprises
• Regulations of Vietnamese law on rights related to copyright

If the compensation cannot be determined, how to handle it?

In case it is not possible to determine the level of compensation for material damage; then the level of compensation for material damage shall be fixed by the Court (statutory damages); depending on the extent of the damage; the minimum compensation level is not less than five million dongs and the maximum is not more than five hundred million dongs. The court shall only apply the statutory level of compensation in cases where it is impossible to determine the compensation level for material damage to the raw materials. application on the above grounds.

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