Draft Precedent no.16/2026: a significant development in assessing damages for software copyright infringement
Note: The document analyzed is Draft Precedent No. 16/2026. The draft itself leaves the date of adoption and the publication decision blank. Accordingly, at the time of writing, it should be distinguished from a precedent formally adopted and published by the Judicial Council of the Supreme People’s Court.
Draft Precedent No. 16/2026 proposed by the Supreme People’s Court of Vietnam is drawn from Appellate Business and Commercial Judgment No. 07/2023/KDTM-PT dated 10 March 2023 of the High People’s Court in Hanoi. The central issue is not whether infringement occurred, but the more difficult practical question of how a copyright owner may prove, and how a court may quantify, damages where computer software has been copied and used without authorization.
The draft precedent adopts a commercially grounded and verifiable benchmark: the actual price for the transfer or licensing of the right to use the software in Vietnam, specifically the price of the closest relevant transaction preceding the infringement. This approach may have consequences well beyond the individual dispute, particularly for evidence preservation and damages strategy in software copyright litigation.
1. Background
The plaintiff, Company P, owned the copyright in Pro/ENGINEER Wildfire 5.0. On 12 April 2019, an inter-agency inspection team discovered unauthorized copying and use of the software at the defendant’s premises. The defendant acknowledged the violation in the administrative record, followed by an inspection conclusion and an administrative sanction.
During the proceedings, the plaintiff initially relied on the listed price of the complete package of modules, but subsequently narrowed its claim and relied on actual licensing transactions in Vietnam. The evidence included a 26 April 2016 transaction for a mold-design and machining software package priced at USD 69,590 and another transaction in 2019 priced at VND 2,184,019,500.
The defendant argued, among other things, that an independent valuation or expert assessment was required, that the actual duration of unauthorized use had to be established, and that the price of Creo could not be used to determine the value of Pro/ENGINEER Wildfire 5.0. These arguments framed the core damages question: must loss necessarily be established through independent asset valuation or calculated by the number of days of unauthorized use?
2. The Court’s key reasoning
The Court found that the software’s development history and copyright registrations supported the conclusion that Pro/ENGINEER Wildfire 5.0 belonged to the plaintiff. It further treated licensing contracts entered into by the plaintiff’s authorized dealer with customers in Vietnam as evidence of the software’s actual market licensing price.
In paragraph [18]—the passage proposed as the precedent—the Court upheld USD 69,590, converted at first instance to VND 1,611,704,400, as the relevant measure because it represented the value of the software package in the closest licensing transaction preceding the infringement. The Court relied on Article 205.1(b) of the Intellectual Property Law and the implementing instruments cited in the judgment.
The Court also rejected the argument that damages had to be calculated according to the number of days of infringement. As quoted in the appellate judgment, Article 205 does not prescribe a per-day calculation, and the plaintiff’s licensing policy was likewise not based on daily use. In the circumstances, the Court considered actual licensing contracts through an authorized dealer sufficient evidence of market price and declined the request for a separate valuation.
3. The final award must be distinguished from the damages methodology
At first instance, the defendant was ordered to pay VND 1,611,704,400 and to make public apologies. At the appellate hearing, the plaintiff voluntarily reduced its monetary claim to VND 1,128,000,000—70% of the amount awarded at first instance—and the parties reached agreement regarding the apology. The appellate disposition therefore reflects the plaintiff’s procedural right of disposition; it does not displace the damages methodology selected for the proposed precedent.
This distinction is essential. The precedential point is the evidentiary and legal basis for quantifying loss, rather than the final settlement-adjusted amount being treated as a standard award applicable to other cases.
4. Practical implications for software owners
If adopted, the precedent could provide a clearer evidentiary route in software copyright cases. A right holder should not rely solely on a list price or an abstract valuation. It should be prepared to demonstrate actual licensing transactions and explain why the transaction relied upon is reasonably comparable to the infringed software.
· Retain licence agreements, purchase orders, invoices, payment records, and evidence establishing the authority of dealers or distributors.
· Prioritize evidence of actual Vietnamese transactions and transactions close in time to the infringement.
· Document the relationship between software versions, modules, functional packages, and downgrade/upgrade policies where an older version is involved.
· Establish not merely a 'software price' but why the cited transaction is a reliable comparator for the infringed subject matter.
· Separate proof of infringement from proof of monetary loss: an administrative infringement decision may be powerful evidence of infringement, while a damages claim still requires its own evidentiary foundation.
5. Important limits
The draft should not be read as establishing an automatic rule that the nearest licence transaction always equals the full amount of damages. The case itself illustrates that module scope, licence duration, software version, number of users or devices, and the commercial architecture of a licence can all become contested issues.
Accordingly, temporal proximity should be considered together with comparability and reliability. Where no suitable comparable transaction exists, or where licence structures differ materially, other legally available methods of proving damages may still need to be considered.
6. Pham & Associates’ perspective
Draft Precedent No. 16/2026 reflects an important feature of Vietnam’s developing copyright enforcement practice: the use of commercial exploitation evidence to quantify loss. For software—an asset frequently subject to complex licensing structures and not readily valued as an ordinary tangible asset—evidence of actual licence transactions offers advantages of objectivity, verifiability, and connection with the market.
For businesses, the lesson extends beyond copyright registration and enforcement. Right holders should build a robust 'commercial evidence file' as part of ordinary licensing operations. Properly maintained licensing agreements and transactional records may become decisive evidence if infringement occurs.