As Vietnam prepares to establish its first dedicated IP court, Espie Angelica A. de Leon highlights how this development will strengthen the country’s IP framework and build trust from local and foreign companies in its IP protection. 

On June 24, 2024, Vietnam’s National Assembly approved the amended Law on the Organization of People’s Courts. The amendments were anchored on the creation of courts of first instance for hearing specific types of cases. These included cases dealing with intellectual property. 

With the revised Law on the Organization of People’s Courts entering into force on January 1, 2025, Vietnam will soon have its own specialized courts, including a dedicated IP court. “This development is considered an important milestone in the judicial reform process in Vietnam,” said Nghiem Pham Xuan Bac, managing partner at Vision & Associates in Hanoi. 

Why does Vietnam need a specialized IP court? 

First, IP infringement activities are rampant. Not only are IP cases in the country rapidly increasing, but they are also becoming more complex and lengthy.  

Second, the civil lawsuit mechanism in the country is often cumbersome, expensive and ineffective due to limitations and disadvantages under the civil procedural law. There are inconsistencies in substantive law in terms of copyright and industrial property rights.  

Vietnam also lacks specialized judges for IP cases. “For a long time, local judges have not been familiar with IP matters, especially when it comes to complex issues of patent, design, copyright and trade secrets,” revealed Hai Dinh, senior associate for enforcement at S&O IP in Ho Chi Minh City. Training initiatives have been inadequate and ineffective, and the few trained ones are not even directly adjudicating cases. This partly explains the prolonged duration of the cases, leading to rulings that are inefficient and inconsistent, as well as a high rate of case reversals and amendments. 

These factors cause IP rights holders to go for administrative measures such as negotiation and mediation instead of filing a case in court. The administrative route, via the market surveillance agencies or the Inspectorates of Science and Technology, is faster and less expensive than civil litigation. But there’s a problem: No damages may be claimed. 

Furthermore, administrative measures are not always a suitable avenue because of the very nature of IP.  

“IP is a complicated field, and there are more and more disputes in this field which are not always suitable to be resolved through the administrative route,” noted Hoa Tran, patent department director at D&N International in Hanoi.  

“In many cases, administrative sanctions are not strong enough to handle the infringements resolutely nor it may deter the infringers from repeating the infringements,” added Son Doan, founding and managing partner at IP Max in Hanoi. “The administrative enforcement authorities, while capable of handling straightforward infringements, would have difficulties in handling complicated infringements causing a delayed or never-ending process.” 

According to Doan, the number of IP cases handled through civil litigation is small compared to the number of cases resolved through administrative measures. From 2012 to 2015, there were 25,543 IP cases taken up via administrative enforcement. During the same period, there were only 43 IP cases handled via civil litigation. In 2020, IP cases handled through administrative measures totalled 1,302. There were 327 in 2021, 546 in 2022 and 644 in 2023. Meanwhile, only 403 cases by civil litigation were recorded from 2015 to 2022, and merely 12 in 2023. 

“IPR infringements, except for making or trading of counterfeiting or pirated goods, are more characteristic of civil interest conflicts, i.e. infringing upon and causing damage to the rights holder than of consequences that might affect or harm the interests and order of the state and public as a whole,” explained Doan. “Therefore, such infringements should be resolved through civil litigation between the parties rather than being handled administratively by enforcement agencies.” 

These challenges will soon be a thing of the past with Vietnam’s very own IP court in the offing. 

“In the digital era, IP rights play a crucial role in fostering innovation, attracting investment and ensuring fair competition while also bringing many consequences due to increasingly complex infringements. To address this, many countries, including Russia, the United States, Japan, Korea, etc., have established specialized IP courts to enhance IP protection, ensure consistency and leverage judicial expertise,” shared Thai Gia Han, senior associate and head of IP and TMT at Indochine Counsel in Ho Chi Minh City.  

Expectations from the IP court 

Our interviewees said they expect the following from the IP court: 

• Training and appointment of IP specialized judges  

“To the best of my comprehension, the court system is urgently conducting professional training sessions for judges to ensure the process of establishing the specialized IP court, which is expected to be established in Hanoi or expanded in Ho Chi Minh City and Da Nang,” shared Quoc Chien Le, managing partner at Annam IP & Law in Hanoi. 

According to Doan, the dedicated IP court will facilitate and foster international collaboration, exchange and support in training judges with substantial knowledge and best practices in handling IP disputes. 

The training and appointment of highly capable judges is key to solving the other problems besetting Vietnam’s legal system, particularly for IP lawsuits. 

• Streamlined procedures and timeframe 

“The dedicated IP court could help expedite proceedings, reducing delays and backlogs that are common in general courts. It will enhance the timeliness and effectiveness of IP rights protection and enforcement in Vietnam,” explained Bac. 

The IP court’s pool of trained judges will help make this possible. As they bring their newly acquired knowledge to the table, cases will be handled more expertly, thus cutting down the duration of the resolution process.  

By shortening what used to be lengthy trial periods, the IP court will also ease financial requirements which otherwise would have deterred parties from pursuing their rights. 

• Reduced pressure on the general judicial system 

“Previously, the general court system and adjudicating panels, which often lacked specialized expertise in IP, faced significant pressure from a high volume of IP cases. The specialized IP court, with its dedicated and highly trained judges, will alleviate this burden and improve adjudication efficiency,” said Han. 

• Consistency in judgment 

A team of judges with specialized knowledge in IP will result in fair, accurate, consistent, objective and timely judgments. This will help improve the effectiveness of IP rights protection in Vietnam.  

• Utilization of preliminary injunctions as stipulated in the current laws 

This is another direct effect of having specialized IP judges. Dinh explained: “IP stakeholders always see the challenge in requesting the court approve the application of preliminary injunctions. Therefore, under the assessment of the specialized judge, it should be less challenging for the IP stakeholders to interpret the infringement as well as mitigate the possible damages caused by the infringement.”  

• Clearer guidance on damages 

Seeking compensation in IP disputes is another major challenge. “Together with the foundation of the IP specialized court, it is expected that the Supreme Court will promote more updated and clear guidance on IP damages that practically encourages the IP stakeholders to pursue the damages that are suitable to the level of the infringement,” said Dinh. 

• More simplified and less cumbersome paperwork requirements 

“This issue is truly a great concern for lawsuits involving foreign elements, typically where plaintiffs are often foreign companies seeking to protect their IP rights in Vietnam,” Tran said. 

• Stronger public trust in the IP protection system, more litigation activities 

The IP court will also help promote confidence among IP rights owners, thereby encouraging them to bring their cases to the court. “In the long run, judicial proceedings in the event of IP disputes will reveal one of the most effective resolutions,” Le stated. 

• More innovation  

A strong framework for the protection of IP rights will further encourage individuals, businesses and academic institutions to innovate. “The specialized IP court can contribute to a more transparent and fairer legal environment for creators, inventors and businesses to protect and enforce their IP rights. Hence, it will encourage research, development and creativity in Vietnam,” said Bac. 

• Greater public awareness of and education about IP 

Having an IP court will benefit everyone in Vietnam as its very existence can raise public awareness about the concept of IP and educate people about their rights. People and organizations will begin to see the importance of IP rights and the role of IP in Vietnam’s economic growth, cultural development and technological advancement. 

• Economic growth for Vietnam 

“As the IP legal system is improved, Vietnam expects to see growth in high-value sectors. The specialized IP court strengthens Vietnam’s ability to capitalize on its creative and technological potential, leading to more diversified and sustainable economic growth,” said Bac. 

Vietnam’s place in the global community: The IP court’s impact 

On August 22, 2019, then-prime minister of Vietnam Xuan Phuc Nguyen issued the Intellectual Property National Strategy Until 2030 to promote innovation, contribute to Vietnam’s economic, cultural and social development and increase the country’s competitiveness. The IP National Strategy Until 2030 is designed to propel Vietnam into the ranks of ASEAN countries that are leading the region in terms of the creation, protection and exploitation of IP rights by the year 2030. Among its objectives are to significantly improve the effectiveness of IP rights enforcement and lessen IP infringement activities considerably. It also aims to increase the role of the courts in the handling of IP disputes.  

A strong IP system is critical in creating a favourable business climate for enterprises, both domestic and foreign. Having a dedicated IP court will definitely strengthen Vietnam’s IP framework, enabling local and foreign companies to trust that their IP rights can be protected in the country and that their enforcement actions will be efficiently and fairly resolved under its system. 

“As highlighted by Chief Justice of Supreme People’s Court Mr. Nguyen Hoa Binh, prominent Vietnamese brands such as ST25 Rice, Trung Nguyen Coffee, etc. have faced the challenge of having their ownership registered abroad without effective infringement resolution mechanisms. A specialized IP court will play a vital role in protecting such national brands and supporting Vietnamese businesses,” said Han. 

The same goes for foreign companies operating in Vietnam or planning to set up shop in the country. 

“The establishment of the IP court signals to international investors that Vietnam is committed to upholding IP rights, which is crucial for attracting foreign investment, especially in high-tech and creative industries,” Bac added. 

A specialized IP court will also enable Vietnam to fulfil its commitments under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU-Vietnam Free Trade Agreement and the Regional Comprehensive Economic Partnership, thus allowing the country to comply with global best practices.  

The establishment of the IP court indeed marks a significant step forward for Vietnam, according to Han. “However, as with any new system, there will be challenges in moving away from the traditional court model,” she said. “It will take time to implement, refine and optimize its operations.” 

Hence, there’s much work ahead to ensure the success of the IP court. Aside from the training of judges, another important and urgent move is the issuance of detailed guidance and regulations for the court’s operations. 

“Looking ahead, I’m optimistic,” declared Han. “With the proper implementation, sufficient training for judges and clear procedural frameworks, the specialized IP court has the potential to become a cornerstone of Vietnam’s IP protection system.” 

Le agreed. “Although the exact time of operation of the specialized IP court has not been determined and to better understand such an establishment, it will be necessary to wait for further legal guidance documents together with numerous practical challenges in the early stages,” he said, “then we can fully trust in bright prospects in the effective enforcement of IP rights in Vietnam eventually.”