You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

March 25, 2022

Decision Reveals Gaps in Vietnam’s IP Enforcement Regime

Subscribe to Updates
Managing Intellectual Property

For years, an inadequate compensation mechanism has been a limitation in resolving IP infringement disputes in Vietnam through civil measures. This limitation was once again highlighted in an appellate trial at the Superior People’s Court of Ho Chi Minh City on February 21, 2022, in which the appellate court reviewed a judgment of the People’s Court of Ho Chi Minh City dated April 28, 2021.

Outline of the Case

The facts of the case are quite simple. A Ho Chi Minh City-based company that provides educational equipment was discovered by the Inspectorate of the Ministry of Culture, Sports and Tourism to be using, without authorization, a specialized computer program from a company based in the United States.

The inspection agency issued a decision to administratively sanction the Vietnamese company. The sanction included a small fine of VND 30 million (approximately USD 1,315) and the forced removal of the infringing computer program, which the infringer readily complied with. Thus, the administrative aspect of the case was completed.

The company behind the software then filed a civil case against the infringer at the People’s Court of Ho Chi Minh City. Among the plaintiff’s claims, the most important was the amount of compensation for damages: over USD 500,000, equivalent to the value of the full-module computer program that was found to be illegally installed and copied on the defendant’s computer. In fact, the plaintiff has sold software licenses for this full module version through resellers in Vietnam for the same amount. In addition to claiming compensation for damages, the plaintiff also demanded that the defendant make a public apology and pay an additional VND 300 million (USD 13,150) to cover the plaintiff’s legal fees.

Court Judgments

The first-instance court determined that the defendant had indeed infringed the IP rights of the plaintiff and required the defendant to make a public apology, but it rejected the plaintiff’s entire claim for damages on the ground that the plaintiff was unable to prove the damages it had suffered, such as loss of property, or decrease in income, profit, or business opportunities (Article 204.1(a) of the Law on Intellectual Property).

Disagreeing with the first-instance judgment, the plaintiff appealed the case to the Superior People’s Court of Ho Chi Minh City. The appeal judgment upheld the first-instance judgment on February 21, 2022.

The contents of both the first-instance and appeal judgments show that both levels of the court have a very conservative way of understanding and applying the law: They did not accept the plaintiff’s claim that the damages could be calculated based on the loss of business opportunities, namely the possibility to sell that very computer program to the defendant for an amount equivalent to the price other customers in the same market had previously paid.

Proving Damages

In practice, it is impossible to mechanically require plaintiffs to prove damages in the same way for different IP rights. If viewed only in terms of annual income and profits, it is entirely possible that both the income and profits of the plaintiff will not decrease but may even increase in the year the violation occurs. In addition, it is extremely difficult, if not impossible, to prove a direct connection between an increase or decrease in the income and profits of the plaintiff, which is a Nasdaq-listed business with billions of dollars in sales, and a single software infringement case in Vietnam.

It is impossible to prove damages through profits gained by the defendant from the use of unauthorized computer program when the plaintiff has no access to the defendant’s financial figures and governance documents. It is also impossible to dissect in detail how much revenue or profit the use of a particular computer program has generated for the defendant among dozens of factors that can affect these indicators.

The simplest and fairest approach, then, is to calculate the damages based on the value of the computer program itself, when it has been sold to similar customers. As a parallel, when a thief steals a luxury car instead of purchasing it from the dealer, the damage can be considered to be the price that consumers have paid for the car in the locality where the theft occurred. In fact, this approach is already prescribed by the current IP Law of Vietnam.

Under Article 205.1(a) and (b), when a plaintiff can prove that an act of IP infringement has caused material damage, it has the right to request the court to decide the level of compensation based on one of the following grounds:

  1. The total material damage calculated as a monetary amount, plus the profits gained by the defendant as a result of the IP infringement if reduced profits of the plaintiff have not yet been included in the total material damage; or
  2. The licensing price for the IP object, on the assumption that the plaintiff had transferred the IP usage right to the defendant under a license agreement with a scope corresponding to the act of infringement committed.

If the plaintiff has the right to choose the basis for compensation, then the court is obligated to consider this basis. In this case, the court made fundamental mistakes in its interpretation and application of the law, leading to a case with fairly simple details being tried in a wrong and completely different direction than reality would dictate.

The plaintiff in this case is now requesting the Supreme Court to review the case according to cassation procedures, which aim to correct errors in the interpretation and application of the law in the effective judgments of lower courts.

It is hoped that the correct perception of the grounds for compensation for damages in intellectual property cases will be properly considered by the Supreme Court.

This article first appeared in Managing Intellectual Property.

Related Professionals

Practices

Intellectual Property

Location

RELATED INSIGHTS​ 

September 24, 2026
Vietnam is implementing and developing a broad package of regulatory reforms that could reshape how IP, data, digital platforms, and product authenticity are regulated and enforced. Several of the key measures have been led by the Ministry of Public Security in its legislative and administrative capacity, as part of a broader government effort. The core reform package consists of four key legal instruments: proposed amendments to the Criminal Code, a proposed new Data Security Law, a draft Decree on Product Identification, Authentication and Traceability, and the newly enacted Decree No. 330/2026/ND-CP. These instruments include rules on criminal enforcement, data security, electronic identification, product identification and traceability, administrative violations, and cybersecurity sanctions. Combined, these measures will affect copyright enforcement, industrial property rights, trade secrets, AI training data, product provenance, online takedowns, valuation of counterfeit goods and electronic evidence. It is worth noting that, in addition to strengthening criminal penalties for IP crimes, Vietnam’s emerging regulatory framework increasingly treats infringement, data misuse, product authentication, and platform-enabled violations as interconnected regulatory and enforcement challenges. For rights holders and foreign investors, this could mean stronger tools against counterfeiting and online infringement, but also more compliance obligations around data, traceability, AI, platform controls and government-facing reporting. Expansion of Criminal IP Enforcement Proposed amendments to Article 225 of the Criminal Code would expand criminal copyright exposure beyond reproduction and distribution to cover large-scale commercial public performance and online communication of works, phonograms and video recordings. This is important because piracy is increasingly about streaming, unauthorized communication, and platform access models rather than physical copying. Aggravated copyright infringement could be subject to up to 10 years in prison for individuals and fines of up to VND 6 billion (about USD 228,300) for commercial legal entities. The amended Article 226 would expand criminal industrial property liability beyond
Read More
September 21, 2026
Thailand’s first-to-file trademark system has a serious vulnerability: it lacks both an explicit mechanism for refusing bad-faith registrations and any means of invalidating them in court after the five-year limitation period has expired. While brand owners worldwide confront trademark squatting, Thailand’s statutory silence stands out, particularly in light of AIPPI’s 2017 Resolution Q249, which recommended that every jurisdiction provide clear tools to address bad faith at all stages of the trademark lifecycle. Nearly a decade later, Thailand has yet to act. This article proposes a concrete reform blueprint, drawing on the legislative models of China, the United Kingdom, and the European Union. The Statutory Gap Under the Thai Trademark Act B.E. 2534, no provision expressly authorizes examiners to reject an application on grounds of bad faith. Section 8(10) addresses well-known marks but offers no relief where the targeted mark lacks well-known status. Practitioners have resorted to Section 8(9)—which bars marks “contrary to public order, morality, or public policy”—as a workaround. However, this provision was designed to address the characteristics of the mark itself, not the applicant’s intent. Thai Supreme Court decisions have split on whether it can reach bad-faith conduct, creating persistent legal uncertainty. The gap extends beyond examination. Civil actions to cancel a bad-faith registration must be brought within five years—a deadline that frequently expires before foreign brand owners discover the squatted mark. Cancellation through the Board of Trademarks remains available but is slow, costly, and subject to court appeal, leaving bad-faith registrations in force during protracted proceedings. The system effectively rewards squatters and penalizes legitimate owners. Lessons from International Best Practices Several major jurisdictions have already closed this gap. China’s 2019 amendment to Article 4 of the Trademark Law introduced an absolute ground for refusal: “bad faith trademark applications without intent to use shall be rejected.” Bad
Read More
September 14, 2026
Myanmar’s first-to-file trademark registration regime under the Trademark Law 2019—which became fully operational in April 2023—provides mark owners with enhanced legal protection compared with the country’s former system. Correspondingly, the current system imposes more rigorous statutory requirements for obtaining, maintaining, and enforcing rights in marks. In this first-to-file trademark registration system, however, evidence of use remains particularly significant, as it may establish acquired distinctiveness, support a claim that a mark is well-known, and strengthen the owner’s position in both registration and enforcement proceedings. Accordingly, it can be said that this framework is underpinned by three key concepts: distinctiveness, well-known status, and, importantly, use of the trademark. Trademark Distinctiveness Under the Trademark Law, signs that lack distinctiveness are generally ineligible for mark protection. These signs include generic terms, basic shapes, unstylized single letters or numerals, and signs that merely describe the kind, quality, quantity, intended purpose, value, geographical origin, production time, or other characteristics of the relevant goods or services. However, a mark that would otherwise be refused on distinctiveness or descriptiveness grounds may be registrable if it has acquired distinctiveness through its use prior to the filing date. To show this, the applicant must demonstrate that the mark became distinctive to relevant consumers through continuous, exclusive, and good-faith use in trade within Myanmar. The burden of proving acquired distinctiveness rests with the mark owner. Accordingly, sufficient evidence demonstrating both use of the mark and the level of consumer recognition attained should be prepared in advance. Well-Known Mark Criteria Myanmar’s Trademark Rules, which govern the substantive examination of mark registration applications, establish criteria for determining well-known marks, aligned with international standards. Where an applicant claims well-known status—whether to overcome a refusal on relative grounds or to oppose a third party’s registration—the registrar will assess the claim based on the following
Read More
September 14, 2026
On August 23, 2026, Vietnam’s National Assembly passed Law No. 11/2026/QH16, amending the country’s Customs Law with effect from March 1, 2027. The amendments represent a substantial reform of Vietnam’s customs-based intellectual property enforcement regime. The reforms come amid considerable external pressure. In its 2026 Special 301 review, the US Trade Representative (USTR) designated Vietnam a “priority foreign country,” citing widespread counterfeiting, weak border enforcement, limited ex officio customs powers, and the absence of controls over goods in transit. Vietnam’s legislative response signals a commitment to bringing its border enforcement practices into line with international expectations. For IP rights holders operating in or through Vietnam, the amended law introduces several tools that substantially strengthen enforcement options at the border. Closing the Transit Gap One of the most consequential amendments is the extension of IP-related customs enforcement to goods in transit. Previously, Vietnam’s customs regime applied IP controls only to goods being imported or exported, a gap the USTR had specifically identified as enabling infringing goods to pass through Vietnamese ports with impunity. Vietnam’s geographic position as a logistics hub for Southeast Asia means that substantial volumes of goods transit its ports and free-trade zones. Extending enforcement to cover these shipments brings Vietnam closer to the standard set by the EU’s customs enforcement regulation and addresses a longstanding concern of multinational brand owners whose goods are frequently counterfeited in the region. Strengthened Suspension and Ex Officio Powers The amended law introduces a dual-track suspension mechanism (Article 73(2)). Customs authorities will suspend clearance upon request by an IP rights holder (or authorized representative) who provides evidence of IP ownership, evidence of infringement, and a financial guarantee. Customs can now proactively suspend clearance on an ex officio basis if, during inspection and monitoring, they discover “clear grounds” to suspect that imported, exported,
Read More