At present, the infringement of intellectual property rights is gradually becoming a serious problem. Thus, the law of Vietnam has specified the level of compensations for damage caused by infringements of intellectual property rights.
PRINCIPLES FOR DETERMINING DAMAGE CAUSED BY INFRINGEMENTS OF INTELLECTUAL PROPERTY RIGHTS
Contrary to people’s perceptions, the infringement of intellectual property rights is increasingly complex and difficult to control. In order to protect the legitimate rights and interests of right holders, the law provides for the handling of such infringements. Pursuant to Article 204 of the Intellectual Property Law 2005, mental and physical damage caused by acts of infringing upon industrial property rights include:
- Material damage, including property losses, decreases in income and profit, loss of business opportunities, reasonable expenses for prevention and remedying of such damage;
- Spiritual damage, including damage to honor, dignity, prestige, reputation and other spiritual losses caused to authors of literary, artistic and scientific works; to performers; to authors of inventions, industrial designs, layout-designs; and breeders of plant varieties.
According to Article 16 of Decree No. 105/2006/ND-CP, actual losses shall be regarded as having been occurred when all of the following bases exist:
- The physical or spiritual benefit is real and belongs to the aggrieved person;
- The aggrieved person could achieve this physical or spiritual benefit;
- There is a decrease in or loss of the benefit of the aggrieved person after the act of intellectual property right infringement is committed as compared to the possibility of achieving such benefit if such act of intellectual property right infringement would not happen and it constitutes the direct cause of such decrease in or loss of the benefit.
DETERMINATION OF DAMAGE CAUSED BY INFRINGEMENTS OF INTELLECTUAL PROPERTY RIGHTS
Where the plaintiff can prove that an act of infringing upon intellectual property rights has caused material damage to him/her, he/she shall have the right to request the court to decide on the compensation level.
DETERMINATION OF COMPENSATIONS FOR MATERIAL DAMAGE CAUSED BY INFRINGEMENTS OF INTELLECTUAL PROPERTY RIGHTS
- Total material damage calculated in an amount of money plus profit gained by the defendant as a result of an act of infringing upon intellectual property rights where the reduced profit amount of the plaintiff has not yet been calculated into such total material damage.
- The price of the licensing of an intellectual property object with the presumption that the defendant has been licensed by the plaintiff to use that object under a license contract within a scope corresponding to the committed infringing act.
- Where it is impossible to determine the level of compensation for material damage on the bases specified above, such compensation level shall be set by the court, depending on the damage extent, but must not exceed VND 500 million.
DETERMINATION OF COMPENSATIONS FOR SPIRITUAL DAMAGE CAUSED BY INFRINGEMENTS OF INTELLECTUAL PROPERTY RIGHTS
Where the plaintiff can prove that an act of infringing upon intellectual property rights has caused spiritual damage to him/her, he/she shall have the right to request the court to decide on the compensation level ranging from VND 5 million to VND 50 million, depending on the damage extent.
Where the plaintiff fails to prove that an act of infringing upon intellectual property rights has caused spiritual damage to him/her, the court shall not accept this request. However, depending on each specific case, the level of spiritual damage of the right holder based on the loss of honor, dignity, prestige, reputation and other mental damage due to the infringements of intellectual property rights, the court decides on the compensation level ranging from VND 5 million to VND 50 million.
NOTES ON DETERMINATION OF COMPENSATIONS FOR DAMAGE CAUSED BY INFRINGEMENTS OF INTELLECTUAL PROPERTY RIGHTS
- When determining compensations for damage caused by infringements of intellectual property rights in cash, we must include loss of revenue, inventory, reduction of profits and other material damage that the owner of the intellectual property proves.
- Where the plaintiff’s reduced profits are not included in the total loss, the plaintiff may add the unlawful profit earned by the defendant due to the act of infringement.
- When determining this amount of profit, it is necessary to consider the costs paid by the defendant because it is compulsory to deduct that amount in total revenue; or determine that a part of the profit is from other activities unrelated to the act of infringement. The total revenue of the defendant shall be calculated on the basis of all invoices and vouchers from the sale of products or the use of the work in violation of the plaintiff’s rights.
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