Abstract

Article 205(1)(b) of Vietnam’s Law on Intellectual Property allows damages to be determined on the basis of the licence fee that the defendant would have paid had the plaintiff licensed the use of the intellectual property right (a hypothetical licence fee), but does not specify how such a fee should be determined. This article analyzes leading U.S. decisions on reasonable royalties and compares the U.S. approach with Vietnamese judicial practice. The analysis shows that the principal difference between the two systems lies in the method of proof: U.S. courts require the date of the hypothetical negotiation to be identified, the comparability of reference licences to be established, and the relevant value to be appropriately apportioned, whereas Vietnamese courts tend to rely on a single reference figure. On this basis, the article offers several recommendations for developing guidance on the application of this method of determining damages in Vietnam.

Keywords: Article 205, comparative law, damages, hypothetical licence fee, intellectual property valuation, reasonable royalty.