With Vietnam’s entertainment industry booming, the demand for music to be used in films and video games has sharply increased. Sometimes a song featured in a movie’s soundtrack can become as popular as the movie itself.
In order to use a song in a film, the producer of the film will typically need to enter into an agreement with the owner of a copyrighted work to have permission to use that work – with an agreed amount of royalty. Otherwise, their use could be considered a copyright infringement. However, what happens if the producer enters into an agreement with a song’s purported copyright owner, only to later find that such person does not really own the song entirely? A recent high-profile case in Vietnam brought this issue to light.
The Dispute and Court Rulings
The film “Face Off 4 – The Walking Guests,” financed and produced by Ly Hai Promotion Co., Ltd (“Ly Hai”) premiered in April 2019, and soon became a big success. In this film, Ly Hai used a song called “Ganh Me” on the basis of a March 2019 contract to use the song signed with the musician Quach Beem, who was recognized as the song owner in a copyright certificate issued on 24 April 2019 by the Copyright Office of Vietnam (COV).
The dispute arose in November 2019 when an individual named Truong Minh Nhat discovered that the lyrics of “Ganh Me” were almost identical to a poem he had written and posted on his Facebook page in June 2014, well before the COV had issued the copyright certificate to Quach Beem. Mr. Nhat initiated a lawsuit against two defendants, Quach Beem and Ly Hai, for copyright infringement.
In his petition, Mr. Nhat requested the court to, among other things, recognize him as the author and owner of the lyrics of “Ganh Me” and order Quach Beem to correct false information in the copyright certificate and compensate for damages. Mr. Nhat also requested the court to order Ly Hai to stop using “Ganh Me” on all media and platforms until the effective date of the court verdict; to publish an apology in mass media for using his poem without permission and providing incorrect information about its author; to name him as the author and owner of the song lyrics in the film and all related articles and posts; and to compensate for damages.
In April 2022, the People’s Court of Ho Chi Minh City issued its first-instance verdict, recognizing that the plaintiff is the author and owner of the poem “Ganh Me” and that the act of registering a copyright for the song “Ganh Me,” containing his poem as lyrics, was an act of appropriating copyright to the plaintiff’s poem. The court then accepted the plaintiff’s claims against Quach Beem, including a part of the claim for damages.
Regarding Ly Hai, the court ruled that the company’s use of the song in its film on the basis of a contract with the musician was in good faith, so it rejected almost all of the plaintiff’s claims, except the request that the plaintiff be credited as the writer of the song lyrics in the film and other related articles and posts.
The first-instance verdict was appealed by Quach Beem, but was affirmed in June 2023 by the HCMC High Court.
Different Opinions on the Rulings
Article 133.2 of Vietnam’s Civil Code 2015 provides a mechanism for protecting a bona fide third party in civil transactions: “in cases where a civil transaction is void but the transacted property is registered at authorities and then transferred through another transaction to a bona fide third party, and this party relies on that registration to proceed with the transaction, such transaction shall be valid.” In such case, while the owner of a property can request the party at fault to refund appropriate expenses and compensate for damages, it has no right to reclaim the property from the bona fide third party. However, there is neither further guidance on Article 133.2 nor a specific definition of “bona fide third party” under Vietnamese law.
In the first-instance verdict, the HCMC Court ruled that Ly Hai’s use of the song was in good faith, but without specifying that it was a “bona fide third party” or providing clear legal grounds for its rulings. Thus, the verdict raised different opinions from lawyers and practitioners.
Many view that Ly Hai could not be viewed as a bona fide third party to enjoy protection under Article 133.2 because there was only a single transaction—the one between Quach Beem and Ly Hai. Without “another transaction,” there could be no third party and, as a result, the plaintiff is entitled to request the court to declare the contract between Quach Beem and Ly Hai void due to Quach Beem’s misrepresentation. In addition, under Vietnam’s IP Law, any use of copyrighted works without the owner’s permission, outside of specified permissible exceptions, would be considered infringement, so Ly Hai should bear liability for infringement charges as requested by the plaintiff.
In contrast, others argue that it is unnecessary to have more than one transaction to determine a bona fide third party. If the transacted property is registered with an authority, and a party relies on such registration to proceed with a civil transaction, this transaction is valid. As a result, such party would be viewed as a bona fide third party and can rely on Article 133.2 to protect its right and benefits. The first two parties would be the other party in the transaction and the true owner of the transacted property. It appears that the HCMC courts ruled on the dispute in line with this latter view.
The controversies above stem from having no clear definition of “bona fide third party” or guidelines on the conditions for protection of a bona fide third party in Vietnamese law. Thus, such matters need to be quickly guided or addressed by a Supreme Court resolution or precedent to ensure the consistent application by the lower courts in practice, so businesses feel safer in their operations in Vietnam.
Until those documents are issued, businesses are recommended to consult lawyers in Vietnam seeking advice for well-prepared contracts to minimize the relevant risk.
This article first appeared in Managing Intellectual Property.