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Infringement over industrial design of “Motorbike” heard by a court in Vietnam

Summary of the case:

In 2018, PIA… & C. S.p.A. (“PIA”), the holder of Design Patent No. 20652 for protection of motorbike industrial design in Vietnam, filed a suit against a Vietnamese company named “DETECH Technology Development Supporting Joint Stock Company” (“DETECH”) for infringement over industrial design of “Motorbike” being protected for PIA in Vietnam under Design Patent No. 20652.

The plaintiff detected that the defendant engaged in manufacturing and launching electric motorbikes in the market of Vietnam. The defendant has also advertised the above-mentioned electric motorbikes in their website. The plaintiff found that the industrial design of electric motorbikes marketed by the defendant is inconsiderable different from that of “Motorbike” protected under Design Patent No. 20652.

In support of infringement allegation, in 2017, the plaintiff purchased a sample of electric motorbikes and proceeded with documenting the evidence of infringement under a Bailiff’s service. Then, PIA filed a request to the Vietnam Intellectual Property Research Institute (“VIPRI”) for obtaining the assessment conclusion on design right infringement who was then issued in favour of PIA.

In the petition lawsuit filed in 2018, PIA requested the Hanoi People Court to demand the defendant to cease the infringement, destroy the infringing elements, pay a compensation damage of VND 500 million (~US$21,700), a fee of VND 200 million (~US$8,700) for hiring lawyer to engage in the lawsuit, make a public apology in local newspaper.

Court’s judgement:

After hearing the case, the Court issued a judgement which ruled that

  • DETECH was ordered to cease the infringing industrial design,
  • DETECH was ordered to pay the fee of VND 200 million (~US$8,700) for hiring lawyer to engage in the lawsuit, other fees such as VND 7,227,000 (~US$315) for purchasing the motorbike samples for the VIPRI’s assessment and VND 6,397,500 (~US$280) to PIA.

Kindly note that PIA has withdrawn the request against DETECH for a compensation damage of VND 500 million (~US$21,700). The reason for PIA’s withdrawal request was unknown.

Noteworthy points from the case:

(1) Measures against IPR infringement in Vietnam

Subject to the nature and severity of IPR infringement, when IPR infringements occurs, the IPR holder may resort to administrative, civil or criminal route to fight against IPR infringement. In case the counterfeits or infringing products are imported into Vietnam, the IPR holder should consider taking border control measure to monitor inbound shipments and seize counterfeits at border gates of Vietnam if detected.

In Vietnam, industrial design rights can be enforced through administrative procedure (i.e. before such administrative enforcement authorities as Market Management Agencies, Police, Inspectorates of Ministry of Science & Technology, Customs) and civil proceeding (i.e. before a relevant court). Criminal route is not statutorily applicable to industrial design infringement.

Civil action is currently not widely used in Vietnam because right holders often feel the courts are inexperienced. However, civil action is gaining in popularity because it provides unique remedies that are not available under administrative action, such as compensation for damages, a public apology and rectification and recovery of attorney’s fees.

(2) Bailiff’s Witness document in the litigation proceedings in Vietnam

In case of no Bailiff’s Witness document, the electric motorbike purchased by the plaintiff might be rejected as a lawful evidence to prove DETECH’s infringement and based on which the claims in the suit initiated by PIA might be deemed ungrounded.

Documenting the evidence of infringement under the Bailiff’s services in Vietnam is critical in civil proceedings in Vietnam if you wish to ensure that the infringement evidence collected in the investigation is recognized/treated as a lawful document.

A Title of Evidence (or Bailiff’s Witness document) is a document which records evidentiary facts. It may be placed before the court to support a party’s argument or it may be used to demonstrate that a transaction has been lawfully carried out. It may also be used as evidence of the existence of a legal relationship. In general, the subject matter of a Title of Evidence (or Bailiff’s Witness document) may be any fact.

(3) Civil remedies against IPR infringement in Vietnam

Vietnamese courts shall apply the following civil remedies in handling organizations and individuals that have committed acts of IPR infringement:

  • compelling the termination of infringing acts;
  • compelling the public apology and rectification;
  • compelling the performance of civil obligations;
  • compelling the payment of damages;
  • compelling destruction, distribution or use for non-commercial purposes of goods, raw materials, materials and means used largely for the production or trading of intellectual property right-infringing goods, provided that such destruction, distribution or use does not affect the exploitation of rights by trademark right holders.

(4) Claiming damage compensation in civil proceedings in Vietnam

In the lawsuit petition, the plaintiff requested the Court in Vietnam to demand the defendant to pay, among others, an amount of VND 500 million (~US$21,700). However, in the court hearing, the plaintiff decided to withdraw such request.

Kindly note that claiming for damages caused by IPR infringement before a court in Vietnam is quite challenging. To claim for damages from infringers, the plaintiff must provide the Court with evidence proving that they have been actually and directly damaged due to the IPR infringement caused by the infringer in Vietnam, such as loss in property and/or decrease in income, profits and/or losses in business opportunities and/or reasonable expenses for prevention and remedy of damage. The proof of damage based on which compensation is made must be clear and legitimate evidence, showing the direct causal nexus between the infringement and the damage. Practice indicate most claims for damages filed by the IPR holders were dismissed because they are not considered as actual losses directly caused by acts of IPR infringement to the IPR holder in Vietnam. The compensation ordered by the Court to be paid by the infringer to the IPR holder is, therefore, not considerable.

(3) Attorney’s fees

Under Article 205.3 of Vietnam IP Law, in addition to the damage, industrial property right holders shall also have the right to request the court to compel organizations or individuals that have committed acts of infringing upon industrial property rights to pay reasonable costs of hiring attorneys (attorney’s fee). Thus, the Complainant is statutorily entitled request a Court in Vietnam to recover attorney’s fees in a civil lawsuit concerning IPR infringement.