Getting the Deal Through – Patents 2011

Pham Vu Khanh Toan
Pham & Associates

Patent enforcement proceedings

• 1. Lawsuits and courts

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

Under the Vietnam Intellectual Property Law (the IP Law), a patentee is entitled to request the competent authorities to enforce its patent rights against an infringement in accordance with provisions of the IP Law and other relevant laws and regulations by means of administrative and civil actions (articles 198 and 199 of the IP Law).

Administrative action is the best option for a patentee to stop an ongoing patent infringement quickly at a low cost. The action, according to article 211 of the IP Law (the 2005 IP Law and its 2009 amendments), can be conducted against infringements that cause loss and damage to the author, right-holder, consumers or society. During administrative actions, competent authorities can search and seize infringing goods without notice to the infringer and if an infringement is found, the authorities may issue a decision on administrative sanctions, which may include a monetary fine up to 500 million dong, depending on the value of the infringing goods and the infringing act, removal of the infringing element and destruction or confiscation of infringing goods.

Civil action is the main instrument for IP right-holders to defend their rights against infringements. By taking a civil action, a patentee can request provisional measures (injunctions) and claim for remedies available under the IP Law, which may include:

• - ceasing the infringing act;
• - public rectification and apology;
• - performance of civil obligations;
• - compensation of damages; and
• - destruction  or disposal of infringing goods for non-commercial purposes.

There are no courts or judges specialized  in the IP field in Vietnam. IP cases are settled by the people’s courts.

• 2. Trial format and timing

What is the format of a patent infringement trial?

To institute a lawsuit, a plaintiff has to submit a petition to the competent court.

The Code on Civil Proceedings of Vietnam does not provide for the particular extent of necessary documents and evidence to support a lawsuit. However, the Code provides specific types and sources of evidence acceptable to courts, namely:

• - readable, audible and visual documents;
• - material evidence;
•  - testimony from witnesses;
• - examination conclusions;
• - records of examination results from on-the-spot inspections;
• - recognised local customs; and
• - results of asset evaluations from recognised authorities or experts on prices.

Hearsay or the characteristics or habits of the defendant are not accepted as evidence; however, such information or materials can be used as references for the court in settling the case.

Cross-examination of witnesses is not practised in Vietnam; however, each party has an equal opportunity to cross-examine evidence presented by the other

According to the IP Law, the court and both the parties have the right to invite experts, and written opinions of private experts appointed by the parties can be used as evidentiary documents. The court can also consult with the National Office of Intellectual Property (NOIP) or any expert organizations on questions regarding IP-related disputes.

Vietnam does not have a jury system. At the first instance the panel consists of one judge and two appointed judges (persons appointed by the People’s Committee to perform the function of judges at the first instance court) and at the appeal instance the panel consists of three judges. Normally a trial lasts one year for each instance.

• 3. Proof requirements

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

The burden of proof of infringement initially lies on plaintiff. However, in the case of infringement of a patented process, the burden of proof may switch to the defendant if the product made by the patented process is new or not new but the patent owner believes that the defendant’s product is made by the patented process and is unable to identify the process used by the defendant despite reasonable measures taken (article 203 of the IP Law).

The burden of proof for invalidation and unenforceability lies on the person who made the claim. Claims for invalidation or unenforceability by a defendant are initially filed with the competent state management authority (ie, the NOIP), and in such case the hearing of the case shall be suspended until the NOIP issues its decision.

• 4. Standing to sue

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

A patentee, registered licensee, organizations and individuals suffering from any act of infringement shall have the right to institute a lawsuit against infringers.

An accused infringer may accuse the patentee of interference with duty and bring a civil action for damages caused by the plaintiff’s actions. The counter-claim of the defendant against the plaintiff shall be accepted for settlement by the court in the same case if the counter-claim for the obligation is to offset against the claim of the plaintiff; the acceptance of the counter-claim will result in the exclusion of all or part of the claim of the plaintiff; or there is a connection between the counter-claim and the claim of the plaintiff and, if they are resolved in the same case, the resolution of the case will be quicker and more accurate.

• 5. Inducement, and contributory and multiple party infringement

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

Inducement, contributory infringement and multiple party infringement are not provided for in the IP Law.

• 6. Infringement by foreign activities

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

A patent registered in Vietnam is effective only within the territory according to the territorial principle. Therefore, no charge of patent infringement is applicable to activities that take place outside Vietnam, except in the case of importing products manufactured in foreign countries for use in Vietnam.

• 7. Infringement by equivalents

  To what extent are ‘equivalents’ of the claimed subject matter liable for infringement?

  According to the IP Law, equivalents of the claimed subject liable for infringement cover both product and process. In particular, as defined in article 8 of Decree No.105/2006/ND-CP (guiding some provisions of the IP Law), an infringing element of an invention may take any of the following forms:
  

   

   

• - a product or part (component) of a product is identical or equivalent to a product or part (component) of a product within the scope of protection as an invention;
• - the process is identical or equivalent to a process that is protected as an invention; or
• - the product or part (component) of the product is manufactured via a process that is identical to or equivalent to a process currently protected as an invention.

 

 

• 8. Discovery of evidence

  What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

  For collecting evidence for proving infringement, damage or invalidity that is under the control of the other party, either the plaintiff or defendant has the right to request the court to compel the party to produce such evidence. In particular, article 203 of the IP Law provides that if a party to a proceeding against an infringement of intellectual property rights has specified that evidence relevant to substantiation of his or her claims is in the control of the other party and is therefore inaccessible, the former shall have the right to request the court to compel the latter to produce such evidence. There is no mechanism for collecting evidence from third parties or from outside the country available under Vietnamese law.

• 9. Litigation timetable

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

A proceeding begins with the filing of the plaintiff’s complaint with a competent court within two years from the date on which its lawful rights and interests were infringed. If the case involves foreign elements, the petition should be filed with the people’s court at provincial level.

A request for applying provisional measures may be submitted at the time of filing the petition or during the settlement of the case. Within three working days from the date of receiving a request for applying provisional measures, the court has to decide to accept or reject the request and notify the same to the requester.

Within five working days from the date of receipt of the petition the court has to decide to carry out the procedures for acceptance and notify the applicant to proceed with payment of a court fee and officially accept the case when the applicant submits a receipt for the payment of the fee. After that, parties concerned have a right and obligation to lodge requested opinions and evidence with the court within 15 days from the date of receipt of the court’s notification. An extension is possible but may not exceed 15 days, as provided by law. The court may collect or request relevant authorities to collect concerned evidence upon a request of either the plaintiff or defendant.

The time limit for preparation for the trial of IP-related cases ranges from two to four months. The court may decide to extend the time limit for preparation for trial, but it shall not exceed six months in any case.

During the period of preparation for trial at first instance, the court shall carry out conciliation to enable the parties to reach an agreement on the settlement of the case. If negotiation between the parties fails, the court shall issue a decision to bring the case to a hearing.

A first instance trial must be conducted within one month from issuing the decision to hear the case. A first instance panel consists of one judge and two people’s assessors. After conducting the interrogation and debate, the members of the panel shall discuss and make their judgment with specific remedies by way of majority voting.

A court’s judgment can be appealed to the Supreme People’s Court within 15 days from its issuance. A similar timetable is applicable for appeal proceedings.

A court’s judgment that has come into force can be challenged by the chief justice of the Supreme People’s Court or the chief procurator of the Supreme People’s Procuracy under the supervisory and review procedures if there is a mistake or violation of law found in the judgment or new important facts about the case that the litigants were unable to know are discovered.

• 10. Litigation costs

  What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal?

  Attorneys’ fees can be up to US$10,000 and are charged according to the work undertaken.

• 11. Court appeals

  What avenues of appeal are available following an adverse decision in a patent infringement lawsuit?

  A court’s judgment that has come into force can be challenged by the chief justice of the Supreme People’s Court or the chief procurator of the Supreme People’s Procuracy under the supervisory and review procedures if there is a mistake or violation of law found in the judgment or new important facts about the case that the litigants were unable to know are discovered.

• 12. Competition considerations

  To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition, or a business-related tort?

  Provisions of the Trade Law are not applied to justifiable actions of the intellectual property rightholder.

• 13. Alternative dispute resolution

  To what extent are alternative dispute resolution techniques available to resolve patent disputes?

  As an alternative dispute resolution method, meetings with infringers aimed at reconciliation or mediation are used in Vietnam for settlement of IP disputes. Pre-hearing consolidation, where the parties reach an agreement on the matters that must be resolved in the civil case, is also used.

  Scope and ownership of patents

• 14. Types of protectable inventions

Can a patent be obtained to cover any type of invention, including software, business methods and medical procedures?

Under article 4.12 of the IP Law, which took effect from 1 July 2006, an invention is defined as ‘a technical solution, in form of a product or a process, to resolve a specific problem by utilising laws of nature’. In accordance with article 59 of the same law, the following subject matter shall not be protected as inventions:

- discoveries, scientific theories; mathematical methods;

- schemes, plans, rules or methods for performing mental acts, training domestic animals, playing games, doing business; com-puter programs;

- presentations of information;

- solutions of aesthetic characteristics only;

- plant varieties, animal varieties;

- processes of an essentially biological nature for the production of plants and animals other than microbiological processes; and

- disease prevention, diagnostic and treatment methods for human or animals.

It is clear that the IP Law explicitly excludes, inter alia, software, business methods and medical methods from protection. However, as recently provided in the new Examination Guidelines for Inventions, a computer program may be considered as a patent-eligible invention if the program is of a technical character and is truly a technical solution to resolve a technical problem by technical means. The program should have potential to bring about a further technical effect that goes beyond the normal physical interactions between the program and the computer. In particular, a computer program claim is acceptable if it is drafted in the form of ‘a computer-readable medium having a computer program embodied therein.

In respect of method-of-treatment claims, under the old patent law, in certain cases, such claims may survive if converted into the Swiss-type format. However, recently the Office has raised objections to ‘use-type’ claims on the grounds that they relate neither to a process nor a product, and therefore cannot be regarded as a statutory subject matter. This viewpoint has caused a fierce debate among Vietnamese intellectual property professionals that has not yet come to an end.

• 15. Patent ownership

Who owns the patent on an invention made by a company employee, an independent contractor, or multiple inventors? How is patent ownership officially recorded and transferred?

Article 86 of the IP Law provides that:

1. The following organisations and individuals shall have the right to registration of an invention, industrial design and layout-design:

• - The authors who have created the invention, industrial design or layout design by his or her own efforts and expenses; or
• - The organisations or individuals who have invested funds and material facilities to the authors in the form of a job assignment or job hiring unless otherwise agreed by the parties and such agreements are not contrary to paragraph 2 of this Article.

If two or more organisations or individuals have jointly created or invested in the creation of an invention, industrial design or layout design, those organisations or individuals shall all have the right to registration and such right shall only be exercised with their consensus.

In line with the above provisions, the ownership of an invention made by a company employee or an independent contractor shall belong to the employer or the person who has invested funds and material facilities in creation of the invention. An invention is recognised as a ‘service invention’ only when the employee has taken working time or used the material resources of the employer in making such an invention.

If an invention has jointly been created by co-inventors, the ownership of the invention shall belong to all of them.

Patent ownership is recorded by the state by grant of patent. The ownership of a granted patent can be transferred by an assignment agreement in written form (article 138, IP Law).

• 16. Patent invalidity

How and on what grounds can the validity of a patent be challenged? Is there a special court or administrative tribunal in which to do this?

In article 96, the IP Law provides that during the term of validity of a patent, a third party may take an invalidation action against the patent if:

• - any of the requirements for patentability were not fulfilled at the time the patent was granted; or 
• - the person to whom the patent was granted was not entitled to apply for and be granted the patent.

There is no special court or administrative tribunal for patent matters. Any third party may file a request for invalidation of a granted patent with the NOIP. If is not satisfied with the decision of the NOIP, the requester may appeal such a decision with the minister of Ministry of Science and Technology or bring the case to the administrative court.

• 17. Absolute novelty requirement

Is there an ‘absolute novelty’ requirement for patentability, and if so, are there any exceptions?

Under article 60 of the IP Law, the disclosure in any form, including by use, anywhere in the world shall destroy the novelty of the invention seeking protection. In other words, the novelty requirement for patentability is worldwide and absolute. There is, however, a grace period of six months provided for an invention that was:

• - disclosed by others without the authorisation of the persons having the right to file the patent application; 
• - published in the form of a scientific presentation by the persons having the right to file the patent application; or 
• exhibited at a national exhibition of Vietnam or at an official or officially recognised international exhibition by the persons having the right to file the patent application.

• 18. Obviousness or inventiveness test

What is the legal standard for determining whether a patent is ‘obvious’ or ‘inventive’ in view of the prior art?

Under article 61 of the IP Law:

An invention shall be considered to involve an inventive step if, based on all technical solutions already disclosed by use or means of a written or oral description or any other form inside or outside the country, prior to the filing date or the priority date, as applicable, of the invention registration application, it constitutes an inventive progress and cannot be easily created by a person with ordinary skill in the art.

Circular 01/2007/TT-BKHCN, providing detailed guidelines for the implementation of the IP Law, provides in section 25, item 6, that the prior art relevant for the purposes of considering an inventive step shall include all the publications or uses that are publicly available anywhere in the world prior to the filing or the priority date of the patent application under examination. In assessment of an inventive step, the examiner will define whether the essential technical features defining the invention in question have been disclosed in the prior art and whe