The second software copyright case before the court

Facts

In September 2006 Hanoi Software detected the product I-Web offered for sale in the market by Thuong Mai So which is very similar to its software WEB++. Upon investigation, the company  found that one of its former employees named Hoang Tung now working for Thuong Mai So had allegedly reproduced WEB++ and helped the new employer to rewrite it into I-Web.

In a meeting organised by Hanoi Software’s lawyers on October 23, 2006, Thuong Mai So admitted having used WEB++ in the development of its I-Web for commercial purpose. On October 24, 2006 it produced a written document in which it formally opologised to Hanoi Software, made commitment to stop using the software I-Web containing WEB++ structure and remove disputed parts of the source code within three (3) months and pay a compensation worth VND43 million (US$2,700.00).

However, after having paid a part of the amount, Thuong Mai So suddenly suspended the implementation of its commitments. According to the company, it has no obligations toward Hanoi Software, since it has found that WEB++ itself is a reproduction of another software, namely QWeb Suite of MultiTech (of note, MultiTech is the company in which directors of both Hanoi Software and Thuong Mai So began their carrier). Thuong Mai So has got a licence of QWeb Suite from MutiTech since October 28, 2006.

Meanwhile, Hanoi Software insists that WEB++ and QWeb Suite are completely independent and declares having proofs of this independence. It affirms to be ready to invite technical experts for examining the relevent documents. D&N International will follow and report to its readers of all new developments of this pending case.

Comments 

Like the first case Dinh Gia Informatic Limited Company vs. P.C.I Limited Companyconcerning the software Lemon3, the second case also shows that disputes over software copyright often occur when a developer leaves the employing company to join its competitors. To protect the source code in such cases is a matter of utmost importance to any software producers. They are strongly recommended to employ secret protection measures and include in employment contracts a confidentiality clause binding the employee to keep information confidential even after the contract termination. A former employee may be sued for infringement of business secret which is protected under the IP Law 2005 and/or for failing to perform a civil obligation. Althought no such case has yet been filed in practice, an infringer may be brought to the court and condemned to pay damage.

Concretely the case has raised the following legal issues:

1. Illegal reproduction of software is rampant in Vietnam, but disputes rarely come to the court, as software producing companies consider civil proceedings excessively complicated and time consuming while outcome is uncertain. In the Lemon3 case, although the Plaintiff has won, the victory has unfortunately not been widely reported in the media in order to encourage other enterprises to sue infringers. Moreover, the Court decision has not been published, thus it is only noted from the press that during a Court hearing aimed at reaching a negotiated settlement the Defendent accepted to publicly apologise to the Plaintiff, rendered the source code, made commitment to stop infringement and pay damage. The dispute which had stirred up interest among both domestic and foreign observers was thereafter quietly closed and did not create expected echo.
2. Proving rights over a software is one of the most frequent difficulties a copyright holder has to face in a dispute. Like any literary or artistic work, copyright over a computer program is protected by law upon its creation without any registration formality. However, in case of dispute the burden of proof lies upon the person who claims the copyright. If the creating enterprises do not wish to register their copyright, they should at least prepare such proof by recording systematically and carefully the whole process of creation. In the Lemon3 case, the Plaintif could prove relatively easily its right over the software Lemon3 thanks to its laudable care in recording and archiving documents, including draft of conception,  schudules for writing different parts of the software, adresses of sofware developers who have leaved the company ect… In the actual WEB++ case, the Defendent argues that WEB++ is not a creation by the Plaintiff, but a reproduction of MultiTech’s QWeb Suite. Thus the Plaintiff will have to prove that it has created WEB++ without illegally using Q-Web Suite.
3. Not depending on whether the Plaintiff succeeds or not in proving its right over WEB++, it may simultaneously or seperately charge the Defendent for unfair competition and claim for damage on such ground. The fact that the Defendent has admitted having reproduced WEB++, the likelyhood of confusion between WEB++ and I-Web and the existence of the Plaintiff’s damage are elements constituting an act of unfair competition.