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January 15, 2020

Corporate Criminal Liability Gets First Test in Vietnam for IP Crimes

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Vietnam’s 2015 Penal Code, which took effect on January 1, 2018, introduced the concept of corporate criminal liability to Vietnam. For the first time, companies could be held criminally liable for an assortment of offenses, including intellectual property crimes (under Articles 225 and 226 of the Penal Code). However, the enforcement of the corporate criminal liability provisions was still questioned due to a lack of actual experience of the authorities, including the police and prosecutors.

On January 14, 2020, the People’s Court of Phu Tho Province ruled on the first criminal case under the new Penal Code involving the criminal liability of a corporate entity for intellectual property crimes. This judgment could serve as a model for the subsequent handling of IP crimes in Vietnam.

The defendants in this case were Cong ty co phan nhom Viet Phap – Nha may nhom Viet Phap (Viet Phap Aluminum Factory – Viet Phap Aluminum JSC) and the company’s director, who were prosecuted on the grounds of unauthorized use of the term “Nhôm Việt Pháp SHAL,” the protected trademark of the similarly named but unrelated Viet Phap SHAL Aluminium JSC, on the labels of shaped aluminum bars manufactured by the company.

In accordance with the judgment, Viet Phap Aluminum Factory – Viet Phap Aluminum JSC was fined VND 2 billion (approximately USD 86,300), and must pay compensation to Viet Phap SHAL Aluminium JSC for physical and spiritual damages caused, with respective amounts of VND 500 million (approximately USD 21,600) and nearly VND 15 million (approximately USD 650).

The director of Viet Phap Aluminum Factory – Viet Phap Aluminum JSC was also fined VND 500 million and prohibited from holding the position for a period of 18 months.

Although the first-instance judgment can be appealed (with unpredictable results), the court’s ruling should be recognized as good news for intellectual property holders in Vietnam. The aggressive penalties imposed on the defendants indicate that the courts are taking intellectual property crimes seriously, which should have a deterrent effect on infringers and would-be infringers.

Partner Loc Xuan Le represented the trademark owner in this case.

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