Summary of the case:

 

Bay SAS, a French company, engages in manufacturing agrochemicals and chemicals used in agriculture (“the plaintiff”). The plaintiff was granted a patent in Vietnam on 20 March 2001. The subject matter protected under the patent is new agrochemical combinations of two known insecticides and other agrochemical products.

 

From market investigations, the plaintiff detected that a Vietnamese company, named “Công ty TNHH Thuong mai Nông Phát” (“Nong Phat”) manufactured pesticides named “SESPA GOLD” and “HUMMER” containing “Fipronil” and “Imidacloprid” - the combination protected by several claims of the plaintiff’s patent.

 

In support of infringement allegation, the plaintiff filed a request to the Vietnam Intellectual Property Research Institute (“VIPRI”) for obtaining the assessment conclusion on patent right infringement who was then issued in favour of the plaintiff.

 

A lawsuit was then brought before a court in Ho Chi Minh City, Vietnam for hearing. In the lawsuit petition, the plaintiff requested the Ho Chi Minh People’s Court to demand the defendant (i) to cease manufacturing, distributing, storing, circulating, offering for sales, advertising the pesticides named “SESPA GOLD”, (ii) to stop importing material, additives for manufacturing “SESPA GOLD” and “HUMMER” products, (iii) to recall the “SESPA GOLD” products, (iv) to withdraw the dossier for registration for circulation of this product at Plant Protection Department, (v) to not register for circulation of any products containing “Fipronil” and “Imidacloprid”, (vi) pay a compensation damage of VND 200 million (USD 8,700) for hiring lawyer to engage in the lawsuit and (vii) make a public apology in local newspaper.

 

Counter-actions from the defendant:

 

The defendant, Nong Phat, did not accept the infringement allegation from the plaintiff, pleading that (i) the ingredients “Fipronil” and “Imidacloprid” were imported from a foreign company who entrusted the defendant to use the above-mentioned ingredients and (ii) Plant Protection Department, upon receipt of the dossier for registration for circulation of “SESPA GOLD” and “HUMMER” products, has reviewed, checked and found that those products meet registration criteria.

 

The defendant filed an invalidation action against the plaintiff’s patent with a hope that the Court would stay the proceedings.

 

The IP Office of Vietnam:

 

The IP Office of Vietnam was requested to give its expert opinions who then confirmed that although the cancellation action was filed, the plaintiff’s patent was still in force.

 

 

Despite the pending invalidation against the plaintiff’s patent, the court viewed that the case needed to be heard to ensure legitimate rights and interests of the concerned parties and compliance of statement regulations concerning intellectual property.

 

Taking into account the facts of the case, the Court issued a judgement which ordered the defendant:

 

 

 

Under Article 27 and 28, Decree No. 99/2013/ND-CP, the Court may suspend the hearing and request the concerned parties to settle the invalidation action at the IP Office of Vietnam. Further, the Court can also suspend settlement of the case based Article 214.1(d), Civil Procedure Code 2015 which provides that [The Court shall issue a decision to suspend the resolution of a civil lawsuit in one of the following cases: The results of resolution of another related case or matter, which, as required by law, must be settled by other agencies or organizations before the cases are resolved, need to be waited for].

 

However, the Court decided to move toward regardless of the pending invalidation and made a judgment in favor of the foreign patentee. The Court’s actions helped other enforcement authorities in Vietnam feel confident in handling IPR infringement cases in which the alleged infringers try to create a dispute, making it as a pleading for further delay or cancellation or suspension of handling the IPR infringement cases.

 

 

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, patent 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 patent 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.

 

 

Practice indicates that one of the common counter-actions which the alleged infringer resort to in a patent infringement case is to challenge the validity of the granted patent (i.e. to file an invalidation request against the patent with the IP Office of Vietnam). The invalidation action aims at, inter alia, delaying the proceedings of the patent infringement case. In case of an invalidation action against a patent, the administrative enforcement authorities or courts in Vietnam are inclined to stay infringement proceedings until the patent invalidation proceeding is completed.

 

Some of other counter-actions may be available under the IP Laws and relevant Decrees of Vietnam for the alleged infringer are as follows:

 

 

Of the three above-identified counter-actions, the (iii) has been used most by the defendant in a patent infringement litigation.

 

 

As determining a patent infringement is more complicated than the infringement of other industrial subject matters, Vietnamese enforcement authorities need to check the case very carefully and it may take time for them to initiate patent infringement proceedings. Further, during handling/hearing patent infringement cases, the enforcement authorities may, in addition to the assessment conclusion from Vietnam Intellectual Property Research Institute (VIPRI) submitted by the patentee, seek expert opinions on this or that matter from the IP Office of Vietnam (formerly called National Office of Intellectual Property of Vietnam (NOIP) or a group of experts in the relevant field of the infringed patent, making the handling/hearing processes longer.

 

 

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

 

(i) compelling the termination of infringing acts;

(ii) compelling the public apology and rectification;

(iii) compelling the performance of civil obligations;

(iv) compelling the payment of damages;

(v) 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.

 

 

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 (USD 21,700). However, in the court hearing, the plaintiff decided to reduce the amount of damage compensation to just VND 59,469,750 (USD 2,600) which is the lawyer fees paid by the plaintiff for hiring lawyer to engage in the lawsuit.

 

Practice indicates that it is often not easy to claim for damage compensation as desired by the patent owner in Vietnam. 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.

 

 

Chu Thanh TU, Partner

Areas of practice: Commercial, Intellectual property, Litigation

 

Chu Thanh TU is a partner in the IP litigation and investment consultancy practice of KENFOX.

TU concentrates his practice on IP litigation and transactions and on counseling startup companies on new business formations and structure. TU has represented clients at all levels of litigation and his clients range from emerging companies to leading generic pharmaceutical companies, medical device manufacturers, optical and laser technology companies, publishers and media companies, major universities, and information services and technology companies.

TU has represented his clients in complex litigation and appellate courts, in alternative dispute resolution forums and before the IP Office of Vietnam, Intellectual Property Departments of Laos, Cambodia and other Asian jurisdictions. He has resolved many disputes without the costly involvement of litigation and has settled many litigated matters to avoid protracted proceedings and related costs. TU has presented both legal and technical issues in a manner easily understood by the enforcement authorities. He also provides expert legal opinions for clients who have been accused of patent infringement.

TU also provides legal advice in areas of foreign investments pertaining to setting up a 100% foreign invested or joint venture enterprise, joint stock company in Vietnam, registration and de-registration of branches, businesses and representative offices, finding partnerships, settling negotiations, reviewing and drafting of legal documents, etc. His commercial advise also encompasses overseeing and handling corporate and real estate mergers and acquisitions, restructurings, securities offerings for clients in the automotive, machinery, banking and finance, chemicals, pharmaceuticals, computer software, energy, real estate development and management, commercial and industrial construction, and entertainment industries.

§    Established a non-infringement position for a Vietnamese corporation when threatened with litigation.

§    Offered counseling on patentability issues at every stage of the product cycle, including its genesis to clients.

§    Provided clients with evaluations of the strength and scope of patents and related intellectual property in valuing businesses and technologies for acquisition purposes.

§    Counseled to clients on patent infringement likelihood, provided patent opinions for both offensive and defensive purposes.

§    Conducted patent infringement enforcement actions, prosecution and defense, including litigation when necessary.

§    Provided clients with alternative dispute resolutions, both before and during litigation, including party-to-party negotiations, court assisted mediation, the use of mediators and arbitration proceedings. 

§    Represented clients with preparation of dossiers and documents and liaised with competent authorities for implement of procedures of investment registration and investment project evaluation the laws.

§    Represented clients on negotiation with their partners with regard to their needs of investment cooperation, assignment/receipt of assignment of project.