Distributor liability for Intellectual property infringing products in Vietnam

Abstract

This article examines the liability of an importer/distributor that places patent-infringing goods on the Vietnamese market. It distinguishes external liability to the patent owner from contractual allocation of risk between distributor and manufacturer, and discusses marketing authorization, IP expert evidence, and damages.

Keywords: patent; distributor; importer; infringement; distribution agreement; IP expertise; damages; precedent.

1. Introduction

Draft Precedent No. 21/2026 is based on First-Instance Judgment No. 150/2024/KDTM-ST of the People's Court of Ho Chi Minh City. The central question is whether a Vietnamese importer/distributor may avoid patent infringement liability by arguing that it is not the manufacturer, that the product has marketing authorization, or that the foreign manufacturer warranted non-infringement.

2. Facts and Legal Issues

Company M owned Vietnamese Patent Nos. 5684 and 7037. Company H distributed Getxx 50mg and 100mg manufactured by Company G in Pakistan. The products contained Sitagliptin phosphate monohydrate. A court-commissioned expert conclusion found the active ingredient to be an infringing element in relation to specified claims of both patents.

H relied on G's role as manufacturer and registrant, the marketing authorizations, and contractual IP warranties and indemnity. The case therefore required a distinction between infringement liability toward the patent owner and contractual responsibility between manufacturer and distributor.

3. Distribution as an Independent Act of Patent Use

The Court attached liability to conduct in Vietnam rather than to the defendant's status as manufacturer. H imported and distributed products containing the infringing element during the patent terms without authorization. Importation, circulation, advertising, offering for sale and storage for circulation supported the infringement finding.

Patent exclusivity is therefore not confined to manufacturing. A non-manufacturer may independently infringe by commercializing a protected product in the territory.

4. Marketing Authorization Is Not a Patent Licence

Regulatory permission to market a pharmaceutical product does not itself grant a right to use another party's patent. The decisive inquiry is whether the distributor has authorization from the patent owner or another lawful basis to use the invention.

5. Supplier Indemnity and External Liability

The distribution agreement contained a supplier warranty of non-infringement and an indemnity. The Court did not treat those clauses as eliminating H's liability toward M. Because no claim against G was before the Court, any dispute between H and G over ultimate responsibility was left to the contractual dispute-resolution mechanism.

This separates two layers: the right holder's claim against the party performing the infringing act, and that party's possible recourse against its supplier.

6. The Role of IP Expert Evidence

The Court relied on Expert Conclusion No. SC003-21TC.TP/KLGĐ, which it had commissioned and which the parties did not oppose. Expert evidence addresses the technical question of the infringing element; the Court remains responsible for evaluating the evidence and reaching the ultimate legal conclusion.

7. Infringement and Damages Are Distinct

Although infringement was established, the Court rejected the full VND 500 million damages claim because material loss and causation were not sufficiently proven. It awarded VND 42,345,761 in supported reasonable costs and VND 138,348,285 in legal fees, and ordered a public apology/correction in three consecutive issues of Suc khoe va Doi song.

A finding of infringement therefore does not automatically establish every claimed head of loss.

8. Significance and Limits of the Draft Precedent

The Draft Precedent proposes that the Vietnamese distributor bears responsibility for patent infringement, while disputes between distributor and manufacturer concerning the manufacturer's legal responsibility are resolved under the distribution agreement. This may become an important reference for cross-border supply chains if adopted.

The source remains a draft: its first page leaves the adoption date and publication decision blank. It should therefore not be described as an officially published precedent. Nor should the approach be read as absolute liability; scope of protection, specific acts, lawful-use defenses, patent term and proof of damages remain case-specific.

9. Practical Implications

Distributors should treat warranties and indemnities as internal risk-allocation devices, not as shields against right holders. Cross-border distribution agreements should address freedom-tooperate review, technical and legal documentation, infringement notices, suspension rights, litigation control, indemnification of expert and legal costs, financial security, governing law and enforceable dispute resolution.

10. Conclusion

Judgment No. 150/2024/KDTM-ST and Draft Precedent No. 21/2026 clarify the distinction between a distributor's external infringement liability and its internal contractual relationship with the manufacturer. That distinction protects patent exclusivity while preserving contractual freedom to allocate supply-chain risk./.

Pham Vu Khanh Toan
Attorney at-law and registered IP Attorney
Managing Partner , PHAM & ASSOCIATES

References and Notes: 
[1] Draft Precedent No. 21/2026; source judgment: First-Instance Judgment No. 150/2024/KDTM-ST. 
[2] Court reasoning [3]-[7] on patent rights, expert evidence and infringement. 
[3] Court reasoning [9]-[12] on damages, reasonable costs and legal fees. 
[4] Court reasoning [15] on the distributor-manufacturer relationship. 
[5] [5] Operative part of the Judgment.