Software Copyright Disputes Between Vietnamese Companies and International Partners
1. Software Copyright in Vietnam: Legal Framework and Risks in International Cooperation
When a software company in Vietnam (referred to as Company A) partners or signs a contract with a foreign counterpart (Company B), both parties often face legal issues related to software copyright—such as usage rights, distribution, modification, transfer, or international licensing. Without proper preparation, Company A is at high risk of entering into software copyright disputes, ranging from unclear source code usage, license violations, to ownership conflicts over improvements or add-on modules.
First, it's important to understand Vietnam’s current legal framework regarding software copyright:
The 2005 Intellectual Property Law, amended in 2009 and 2019: software is protected as a “computer program work” under copyright law.
Supporting decrees include:
Decree No. 105/2006/ND-CP, amended by Decree No. 119/2010, detailing the implementation of some provisions of the Intellectual Property Law.
Decree No. 131/2013/ND-CP, amended by Decree No. 28/2017/ND-CP, on administrative penalties for violations in intellectual property.
In addition to national laws, Vietnam is a member of international agreements such as WTO/TRIPS, CPTPP, and EVFTA. These commitments require Vietnam to establish effective enforcement mechanisms for intellectual property rights, including software copyright and cross-border infringement.
2. Common Scenarios in Software Copyright Disputes Between Vietnamese Companies and International Partners
Below are scenarios that Company A might encounter when working with foreign partners:
Unclear software licensing agreements
Example: Company B licenses software to Company A but fails to clearly define the scope of usage (number of users, territory, modification rights). If Company A exceeds the granted rights—such as developing extensions or transferring the software to another party—they could be sued for contract breach or copyright infringement.
Add-on modules or features developed by Company A
If Company A’s developers in Vietnam create new modules, and the contract lacks clarity on ownership (Who owns it? Who can license it?), disputes may arise over the proprietary rights to the new software components.
Use of unlicensed software or violations of open-source licenses
Using open-source libraries (e.g., GPL, MIT) without proper attribution or licensing may lead to liability. If either Company A or B violates open-source license terms, the international partner may terminate the agreement or seek compensation.
Conflict between international and Vietnamese law
If the contract applies foreign law (e.g., the law of country B), but enforcement must take place in Vietnam, there may be obstacles such as jurisdiction issues and recognition of foreign judgments. Enforcing international court rulings or arbitration awards in Vietnam can be challenging.
Lack of evidence or copyright registration
Although Vietnamese law protects copyright from the moment of creation (without requiring registration), having a Certificate of Copyright Registration or proof of ownership is crucial in a dispute. Without it, asserting rights and claiming damages becomes more difficult.
3. Handling International Software Copyright Disputes in Vietnam
Here’s a recommended roadmap for Company A to manage or prevent disputes with international partners:
Carefully review contracts and licenses before signing
Clearly define ownership of the software, auxiliary modules, and rights to modify, upgrade, or redistribute.
Specify governing law, dispute resolution forums (court or arbitration), and arbitration venues if applicable.
Include terms on confidentiality, moral rights, economic rights, and usage limits (e.g., territory, number of users).
Prepare legal evidence and documentation
Evidence of copyright ownership: source code, development history, copyright certificates (if available), design files, packaging, and release versions.
Copyright registration certificates or equivalent supporting documents.
Documentation of damages: including revenue loss, missed profits, restoration costs, or lost business opportunities. For example, in a case involving unlicensed use of CREO Element Pro 5.0, damages were calculated based on the full software suite's market value.
Negotiation and mediation
When violations are detected, issue a cease-and-desist letter, requesting cessation of infringing activities and compensation if applicable.
Mediation is faster and more cost-effective than litigation. If the contract includes mediation or arbitration clauses, comply with them.
Arbitration or litigation options
If an international arbitration clause exists, disputes can be brought to arbitration (e.g., VIAC if accepted by the foreign party).
If no arbitration clause exists or arbitration is rejected, Company A can file a lawsuit in Vietnamese courts. Under Vietnam’s IP Law and guiding decrees, courts can rule on copyright disputes, award damages, and order cessation or destruction of infringing software.
Enforcement of international rulings in Vietnam
If a favorable international ruling or arbitration award is obtained, ensure the contract allows for recognition and enforcement of that decision.
Vietnam’s Civil Procedure Code and international treaties govern the recognition and enforcement of foreign arbitration awards.
Administrative or criminal action if appropriate
Besides civil remedies (lawsuits) and arbitration, Vietnam allows administrative sanctions for software copyright infringement—fines, orders to cease violations, etc.
Serious or large-scale violations may lead to criminal prosecution if thresholds under current laws are met.
4. Real-World Experience and Case Studies
Case example: Company H used CREO Element Pro 5.0 software without fully paying for the license. The international company (plaintiff) demanded compensation based on the full module pricing. The court assessed both tangible losses and profits gained by the infringer to determine damages.
Many Vietnamese companies have unintentionally infringed software copyright by using cracked versions, unlicensed tools, or misused open-source code. These issues often surface during internal audits or inspections by IP authorities.
5. Conclusion
Prevention is better than cure: avoid risks caused by vague contracts. Always control source code, licenses, usage rights, and international terms in agreements with foreign partners.
Register software copyrights or obtain equivalent certificates, and store evidence of software development.
Choose the right dispute resolution mechanism: ensure international arbitration decisions can be enforced in Vietnam, or be prepared to litigate in Vietnamese courts.
Prepare clear evidence and reasonably calculated damages to support legal claims.
Use administrative and criminal measures when necessary to enhance deterrence.
If Company A is facing a software copyright dispute with a foreign partner, they should:
Contact an intellectual property lawyer to review contracts and assess rights and obligations.
Draft legal notices demanding cessation and negotiate compensation.
Prepare litigation or arbitration documents, including damage verification, applicable law, and enforcement strategy.
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