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Utility solution infringement case Hoang Thinh vs. Nguyen Dinh My

The IPR infringement case opposing the inventor Hoang Thinh (Dac Lac province) and two businesses in the same province was brought to Dac Lac People’s Court on June 17, 2010 for two day public hearing. According to the court’s decision dated June 18, 2010, the infringer has to pay monetary damages worth VND412 million (US$21,750), including VND61 million (US$3,250) attorney’s fees.

Facts

Complainant in the case is Mr. Hoang Thinh, an inventor domiciled in Buon Trap town, Krong Ana district, Dac Lac province, the owner of the invention “Brick making machine with central rake” protected under Utility Solution Certificate No. 319 dated December 20, 2002 issued by the National Office of Intellectual Property of Vietnam.

Defendants in the case are Mr. Nguyen Dinh My, the owner of Viet My Brick Manufacturing Business and Mrs. Nguyen Thi Thu Suong, the owner of Dinh My Mechanical Business and Mr. My’s wife, both domiciled in the same Buon Trap town, Krong Ana district, Dac Lac province.

According to Mr. Hoang Thinh’s complaint, as largely reported in the domestic media, from 2004 to 2007, Mrs. Suong’s Dinh My Mechanical Business manufactured and sold four brick making machines counterfeiting the Utility Solution Certificate No. 319. During the same period, Mr. My’s Brick Manufacturing Business utilized a such counterfeit machine to make and sell bricks in the market to gain undue profits. Based on the above allegations, Mr. Thinh claimed damage worth VND34 million (US$1,800) against Mrs. Suong’s business and VND351 million (US$18,500) against Mr. My’s business.

During the court sessions, Complainant has presented an official report on IP infringement dated August 28, 2007 issued by competent authorities proving the fact that Viet My Brick Manufacturing Business had “exploited useful functions” of counterfeit brick making machine to produce bricks for commercial purpose. Based on this evidence, Dac Lac People’s Court has confirmed the act of infringement by Viet My Manufacturing Business causing damage to the ownver of IPRs, and ordered the Business and its owner to pay VND351 million damage and VND61 million attorney’s fee to the Complainant. Concerning Mr. Thinh’s claim against Dinh My Mechanical Business, the court dismissed his complaint and damage request on the ground that the Complainant was unable to provide original invoices proving that Dinh My Mechanical Business had manufactured and sold counterfeit machines.

Comments     

  1. Of utmost importance in this case is the court’s recognition of the act of “exploiting useful functions” of a product infringing patent rights as act of IPR infringement. Specifically, in this case, the product infringing patent rights is a counterfeit brick making machine posseded by the Defendant without the patent owner’s permission. The sanction by the court of the use of counterfeit products for commercial purpose shows the court’s willingness to improve IPR enforcement.This significant court decision is a warning to many Vietnamese manufacturers about the risk of IPR infringement. As a matter of fact, Vietnamese manufacturers used to go to the market place to buy manufacturing machines without questioning as to whether they are counterfeit or not. To avoid the risk, they now have to adopt a more cautious attitude. It is advisable for them to buy only from reputed manufacturers and suppliers, and carefully keep original invoices as evidence of the purchase. In case he/she is condemned to pay damage to an IPR owner, he/she would claim damages against the seller of the counterfeit products.
  2. In this case, Defendant has to pay damage worth VND351 (US$18,500) to Complainant for the use during three years of a counterfeit brick making machine for commercial purpose. Such “punitive” level of monetary damage is good news for IPR owners and sends a positive signal about the improvement of IPR enforcement system in Vietnam.Until now, many Vietnamese manufacturers prefer to buy cheap counterfeit machines, as they believe the worst monetary damage they risk to pay is equivalent to the price of the guinuine product. But the Dac Lac People’s Court decision may hopefully contribute to change this attitude, as reckless manufacturers will have now think twice about the risk associating wit the exploitation of counterfeit products, because unduely gained profits are taken into account for calculating the damage.
  3. This case once more shows that civil action in Vietnam remains cumbersome and time consuming. Proving infringement remains particularly difficult due to the lack of appropriate procedure for counterfeit seizure. However, the success of the inventor Hoang Thinh will hopefully encourage other IPR owners to continue to bring their cases before the Vietnamese courts.