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

September 4, 2023

Vietnam: Film Music Copyright Case Raises Questions

Subscribe to Updates
Managing Intellectual Property

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.

Recommendations

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.

Related Professionals

Practices

Intellectual Property

Location

RELATED INSIGHTS​ 

August 30, 2024
As in many other countries, registered trademarks in Indonesia that are not used for a given period of time can be canceled. A recent decision (Decision No. 144/PUU-XXI/2023) from the country’s Constitutional Court has extended the non-use cancellation period from three years to five years, applicable from July 30, 2024. This ruling could have a major impact on trademark holders in the country. Background of the Case Article 74 of Indonesia’s Trademark Law of 2016 specifies that trademarks can be canceled if they go unused in the trade of goods or services for three consecutive years from the date of registration or last use. This provision is aligned with the Paris Convention and the TRIPs Agreement. On October 27, 2023, an Indonesian individual named Ricky Thio asked the Constitutional Court to examine the constitutionality of Article 74, arguing that it opened a pathway for third parties to eliminate trademarks owned by small and medium-sized enterprises (SMEs), and did not provide certainty to his registered trademark in terms of the period of protection. Additionally, he argued that the period of three consecutive years was burdensome for SMEs, and asked the court to void Article 74 and add force majeure circumstances—such as Covid-19—as an exemption to non-use cancellation. Mr. Thio submitted this request while he was defending his trademark registration from a non-use cancellation request filed by Zhejiang Dahua Technology Co., Ltd. In his defense to that cancellation request, Mr. Thio explained that the non-use of the trademark was due to the Covid-19 pandemic. The cancellation case followed a different judicial pathway, and was under appeal before the Supreme Court at the time Mr. Thio filed his request for judicial review with the Constitutional Court. Mr. Thio’s case also attracted the submission of an amicus brief—a relatively new trend in Indonesia—from
Read More
August 30, 2024
In 2023, Vietnam’s Intellectual Property Rights Infringement Prevention Cooperation Program reported that 776 cases of IPR infringement were resolved nationwide. Of these, 546 were addressed through administrative measures, while criminal proceedings were initiated in just five cases. These statistics clearly show that administrative measures overwhelmingly dominate the response to counterfeit goods, with criminal actions being relatively rare. This raises an intriguing question: Why do IPR holders prefer administrative routes over criminal measures in Vietnam? And what challenges and obstacles make criminal enforcement less commonly pursued in these cases? Overlapping legal provisions Under Vietnam’s Penal Code, two key offenses address counterfeit goods: Manufacturing and trading in counterfeit goods under Article 192. Manufacturing and trading in industrial property rights-infringing goods under Article 226. Both provisions regulate counterfeit goods, yet they suffer from a lack of clear definitions and guidelines for application. Article 192 does not explicitly define “counterfeit goods”. Instead, authorities refer to Article 3.7 of Decree No. 98/2020/ND-CP, as amended, which outlines several categories of counterfeit goods, including: (i) utility counterfeits (goods not meeting normal expectations of usage or function), (ii) substandard goods, (iii) counterfeit goods based on misrepresentation, and (iv) counterfeit stamps, labels, and packaging. Meanwhile, Article 226 specifically deals with counterfeit goods that infringe trademark rights. These “trademark-counterfeit goods” are defined under Article 213.2 of the IP Law as goods or packaging bearing trademarks or signs that are identical or confusingly similar to protected trademarks for the same goods, used without the trademark owner’s permission. In this regard, “counterfeit goods” and “trademark-counterfeit goods” are treated as distinct, non-overlapping concepts, each corresponding to a separate offense. However, in practice, there is often a gray area where the two overlap. Many cases involve infringing goods that meet the criteria for both categories, allowing authorities to apply both regulations simultaneously. For
Read More
August 30, 2024
With the emergence of online marketplaces and e-commerce platforms, consumers have transformed their ways of engaging in transactions, gaining unprecedented convenience and access to a vast array of products. These platforms allow small businesses and individual entrepreneurs to reach a wider audience in an increasingly competitive market. Challenges in Tracing Online Infringers The growth of these online marketplaces and e-commerce platforms has also given rise to challenges, particularly in locating the actual identity of online infringers and combating intellectual property infringement activities. Online infringers often take advantage of anonymity to offer counterfeit products for sale on their platforms. Not only do these online infringing activities violate the rights of IP owners, but they also involve the sale of counterfeit products that are often manufactured with inferior quality and may pose significant risks to consumers’ health and safety. In today’s modern world, tracing the actual identity of online infringers proves challenging, as infringers adopt numerous methods to conceal their identity. The most frequently used method is using a fake name and address when dispatching parcels to consumers, making it difficult to verify the seller’s identity and the location of the sender on the parcel package. Some infringers exploit cash-on-delivery logistics services to prevent the disclosure of their identity, such as bank account numbers and bank account owner names, which would typically be required for direct payments. Instead, the shipping company collects the payment on their behalf, allowing the infringers to remain anonymous and making it more difficult to find their actual identity. Thailand’s New Regulations on Cash-on-Delivery Logistics Services Recently, the Committee on Contracts of Thailand’s Consumer Protection Board announced the Notification regarding Stipulation of Cash-on-Delivery Logistics Services as a Controlled-Receipt Business B.E. 2567 (2024) under the Consumer Protection Act B.E. 2522 (1979) in the Thai Royal Gazette dated July
Read More
August 7, 2024
A recent case at the Myanmar Competition Commission has set a significant precedent in the country’s approach to unfair competition practices. The case, involving a Thai manufacturer of cement grout and tile adhesive products and a local Myanmar producer, highlighted the Commission’s willingness to address issues of deceptive marketing and unfair competition. Background The case centered around a Thai manufacturer who has been distributing their cement grout and tile adhesive products in Myanmar for many years through local distribution agents. The company had established a well-known brand and a strong reputation for quality in the Myanmar market. In recent years, the Thai company discovered that a local individual in Myanmar was manufacturing and selling similar products with packaging nearly identical to their own. The local producer was using the same mark device, color, and packaging design themes, and the products contained deceptive information. Legal Proceedings After an initial cease-and-desist letter failed to resolve the issue, a complaint was submitted to the Myanmar Competition Commission. The case was notable because the Commission typically does not address issues of copying designs, marks, colors, or packaging themes. However, the complaint emphasized that the local individual was misleading customers and competing unfairly by using deceptive information and copying distinctive designs and themes. Lawyers from Tilleke & Gibbins, representing the Thai manufacturer, provided extensive documentation proving their client’s long-standing presence in the Myanmar market and the local individual’s deceptive practices. The Commission’s Investigation Committee conducted a thorough investigation, including market surveys and hearings involving both parties. Commission’s Decision After nearly a year of deliberation, on July 4, 2024, the Decision-Making Committee of the Myanmar Competition Commission ruled in favor of the Thai manufacturer. The decision required the local individual to: Immediately cease the production and distribution of cement grout and tile adhesive products bearing
Read More