Recently, international commercial arbitration tends to broadly accept the settlement of disputes related to intellectual property (“IP”) rights by Arbitration. However, in Vietnam, the regulations on the jurisdiction of Commercial Arbitration over the disputes related to IP rights are not clear.

1. How does the laws of Vietnam stipulate on the methods for settling IP right disputes?

According to Law on Intellectual Property 2005, in case a dispute related to an act of IP infringement arises, the IP owner can initiate a lawsuit to request the Court or Arbitration to resolve the dispute to protect his/her IP rights. So, the prevailing Law on Intellectual Property allows to settle the disputes related to IP infringement by Arbitration.

Law on Commercial Arbitration 2010 stipulates that Arbitration shall settle the following disputes: disputes arising from commercial activities among the parties; disputes among the parties at least one of whom conducts commercial activities; and other disputes among parties that are permitted by law to be adjudicated by Arbitration.

2. Practice on the settlement of IP right disputes by Commercial Arbitration

IP right disputes are considered as the disputes over the ownership, use right, or exploration right of IP objects. These may include the following types of disputes:

• Disputes over the subject of IP rights, the validity of IP rights;
• Disputes arising from the transfer contract of IP ownership or IP use right;
• Disputes arising from the activities of capital contribution by IP right or permitting to use, benefit from IP objects;
• Disputes arising from the infringement of IP right.

According to Law on Commercial Arbitration 2010 as mentioned in Item 1 above, in case an IP right dispute arises from commercial activities, or has at least one party engaging in commercial activities, seemly it can be resolved by Arbitration.

However, in practice, there are still many opinions on the jurisdiction of Commercial Arbitration over the disputes related to IP right in Vietnam, due to the following issues:

1. Firstly, IP rights are usually established based on the registration confirmation or protection certification granted by Vietnamese competent authorities to the owner. Before settling the contents of the disputes, the initial issue that the dispute settlement authorities need to clarify is the IP right existence recognized for a subject, validity of the IP right, scope of IP right, legality of IP registration. In case the parties have disputes about these issues, does the Commercial Arbitration have the right to make an award?
2. Secondly, an arbitral award deciding the validity, scope, or owner of IP rights generally has no impact on third parties and cannot bind upon the national registration authorities to perform any specific act regarding the IP right registration over the IP right arbitrated by Arbitration.
3. Thirdly, it is often assumed that IP is a public policy concern. Many disputes regarding the legality of IP rights relate to the State authorities ’will. Arbitrating such dispute may affect the public policy.

The supporting party of the Commercial Arbitration jurisdiction considers that most IP right disputes often arise from contracts and contractual issues. In case the parties do not conflict the legality and validity of IP rights (for example, disputes arising from licensing contracts, IP transfer contracts), this dispute can be completely resolved by Arbitration.

In general, the scope of IP right disputes is quite wide in nature. The current Law on Intellectual Property and relevant laws of Vietnam have not yet specifically and clearly stipulated the types of IP right disputes that may fall under the Commercial Arbitration jurisdiction, which causes difficulties for organizations, individuals in choosing the authority for dispute settlement.

In practice, some Arbitration centers in Vietnam still accept to settle IP right disputes, but the rate of intellectual property cases resolved by Commercial Arbitration in Vietnam is inconsiderable in general.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

Date: 22 March 2023

Writer: Trinh Nguyen