When you win an intellectual property infringement case, how much compensation can you actually recover? This is the most practical question — and also where many sources still cite the old law: the “VND 500 million cap” or “VND 5–50 million for moral damages” have been wrong since 1 April 2026. This article explains how damages for IP infringement are calculated under the newest legal framework.
The Damages Framework — Article 205 of the IP Law (New from 1 April 2026)
Article 205 of the Intellectual Property Law (amended by clause 68, Article 1 of Law 131/2025/QH15, effective 1 April 2026; numbering per VBHN 67/VBHN-VPQH) sets out four bases for calculating material damages, in order:
(a) Actual material loss + infringer’s profits
Total material loss expressed in money, plus the profits the infringer earned — if the plaintiff’s lost profits have not already been counted in the total material loss. Material loss includes:
- Loss of property;
- Decrease in income and profits;
- Loss of business opportunities;
- Reasonable costs to prevent, limit, and remedy the damage.
On “reasonable costs”: courts in practice accept lawyers’ fees and appraisal costs within this item — but the statute does not name “lawyers’ fees” expressly, so do not treat their recovery as automatic.
(b) Hypothetical license fee
The price of licensing the IP subject matter on the assumption that the defendant had been licensed by the plaintiff under a contract, within the scope corresponding to the infringing acts. In practice: reference royalty rates from comparable trademark license agreements on the market.
(c) Other bases proven by the plaintiff
Any other calculation basis the plaintiff can prove with evidence.
(d) Court-determined amount — up to VND 1 billion (new)
Where loss cannot be determined under (a), (b), or (c), the court sets damages at its discretion according to the extent of loss, not exceeding VND 1 billion (previously only 500 million). These are statutory damages — note that 1 billion is a ceiling, not a default award.
Moral Damages — New 10x to 100x Base Salary Range
Under Article 205(2) (new from 1 April 2026): where the plaintiff proves moral damage caused by the infringement, the court awards within 10 to 100 times the base salary — replacing the old fixed VND 5–50 million range.
With the base salary at VND 2,530,000/month (Decree 161/2026/ND-CP, effective 1 July 2026), the moral damages range at the time of writing is VND 25,300,000 – 253,000,000. The law includes a fallback: if the base salary is abolished, the reference amount is set by the Government (not lower than this clause’s level). As the base salary may continue to change under the salary reform roadmap, these figures are correct only at the time of writing.
Principles for Determining Loss — Article 204
Article 204 of the IP Law (unchanged through the amendments) defines loss as:
- Material loss: loss of property; decrease in income and profits; loss of business opportunities; reasonable costs to prevent, limit, and remedy damage;
- Moral loss: harm to the honor, dignity, and prestige of organizations and individuals.
Conditions for Compensation
Under Resolution 02/2022/NQ-HDTP guiding Article 584 of the Civil Code 91/2015/QH13, the plaintiff must prove three elements:
- An infringing act;
- Actual loss — material loss must be real loss quantifiable in money;
- Causation between the infringing act and the loss.
Principles: full and timely compensation; where several persons jointly cause loss, they are jointly liable in proportion to fault (Article 587 of the Civil Code). The burden of proof lies with the plaintiff: evidence of the infringing act and the loss (Article 203.3 of the IP Law; Article 91 of the Civil Procedure Code). Where specific loss cannot be proven, the court applies point (d) of clause 1 (up to 1 billion) or the moral damages range under clause 2.
Summary Formula
Compensation = Material loss (proven under bases a/b/c, or court-set up to 1 billion under point d) + Moral damages (VND 25.3–253 million if proven, at the time of writing) + reasonable costs (lawyers, appraisal — per court practice).
Illustrative Examples (Hypothetical Scenarios)
- Under point (a): Company A loses VND 800 million in revenue due to counterfeit goods bearing its mark flooding the market, plus VND 70 million in evidence-gathering and appraisal costs (with invoices and audit reports) — claiming VND 870 million. If the infringer earned VND 500 million from the counterfeits and this does not overlap A’s loss, it may be added — but the same amount must not be double-counted.
- Under point (b): Lost revenue cannot be quantified — take the market royalty rate for a comparable trademark (e.g., 8% of revenue) multiplied by the defendant’s infringing-goods revenue.
- Under point (d): No specific figure can be proven — ask the court to decide within the 1 billion ceiling, considering the extent of loss (scale of infringement, willfulness, duration, etc.).
The three practical calculation methods: (i) the plaintiff’s lost profits (comparing revenue/profits before and after the infringement); (ii) the defendant’s illicit profits (traced through books and invoices); (iii) the hypothetical license fee (referencing comparable trademark license agreements).
Accompanying Civil Remedies — Beyond Money
Besides damages, courts may order (Articles 202, 206, 207 — Article 207 amended by clauses 67 and 69, Article 1 of Law 131/2025):
- Cessation of the infringing acts;
- Public apology and correction;
- Destruction of infringing goods, materials, and means, or their distribution/use for non-commercial purposes;
- Destruction of counterfeit trademark goods and pirated goods — new in 2025 (except special cases prescribed by the Government);
- Removal, concealment, or disabling of access to infringing information, content, accounts, websites, applications, and domain names/Internet addresses — new in 2025.
In many cases, non-monetary remedies (destroying counterfeits, taking down online content) deliver greater practical deterrence than the damages award itself.
Limitation Period
3 years from the date the claimant knew or should have known of the infringement of their lawful rights and interests (Article 588 of the Civil Code; Article 5 of Resolution 02/2022/NQ-HDTP). To claim damages, you must sue in court within this period.
Risks and Practical Recommendations
- Gather loss evidence early: audit reports, revenue books before and after the infringement, invoices for prevention/remedy costs (lawyers, appraisal, evidence gathering).
- An expert opinion on the value of loss (VIPRI — field iv under Article 114 of Decree 65/2023) strengthens the damages claim — see IP expert opinions in disputes.
- Seek non-monetary civil remedies in parallel (destruction of counterfeits, online takedowns).
- Avoid mistakes: citing the 500 million cap or 5–50 million moral damages (old law); treating 1 billion as a default rather than a ceiling; asserting “courts usually award X” when the new law (effective 1 April 2026) has no summarized case law yet.
- Because the new law took effect on 1 April 2026, there is no summarized case law on how courts apply the “up to 1 billion” and “10–100x base salary” ranges — state only the statutory ranges and the factors courts consider (extent of loss, willfulness, scale, duration).
Frequently Asked Questions
What is the maximum compensation for IP infringement?
Under point (d), clause 1 of Article 205 (from 1 April 2026): up to VND 1 billion where loss cannot be determined under the other bases — a ceiling, not a default. If actual loss proven under points (a)/(b)/(c) exceeds 1 billion, the award may be higher.
How are moral damages calculated in IP cases?
Where the plaintiff proves moral damage, the court awards 10–100 times the base salary (about VND 25.3–253 million at the time of writing, based on the VND 2,530,000/month base salary from 1 July 2026).
Are lawyers’ fees recoverable?
Courts in practice accept lawyers’ fees within “reasonable costs to prevent, limit, and remedy damage”, but the statute does not name them expressly — do not treat recovery as automatic; valid invoices and documents are needed.
What if I have no invoices or documents?
Where specific loss cannot be proven, the court applies point (d), clause 1 of Article 205: setting damages at its discretion according to the extent of loss, up to 1 billion.
Is there a limitation period for damages claims?
Yes: 3 years from the date the claimant knew or should have known of the infringement (Article 588 of the Civil Code).
Sources
- IP Law (VBHN 67/VBHN-VPQH), amended by clauses 66–69, Article 1 of Law 131/2025/QH15 (effective 1 April 2026) — Articles 201, 202, 203, 204, 205, 206, 207, 208;
- Decree 65/2023/ND-CP (amended by Decrees 15/2026, 33/2026, 100/2026; VBHN 04/VBHN-BKHCN) — Article 114;
- Civil Code 91/2015/QH13 — Articles 584, 587, 588; Resolution 02/2022/NQ-HDTP — Article 5;
- Civil Procedure Code 92/2015/QH13 — Article 91;
- Decree 161/2026/ND-CP (effective 1 July 2026) — base salary VND 2,530,000/month.
Disclaimer: The information in this article is for reference only and does not constitute legal advice. Please consult a lawyer regarding your specific matter.
Content transparency: This article was drafted with AI assistance, based on the cited legal instruments, and has been editorially reviewed by the FLAT LAW FIRM content team before approval.
If your IP rights have been infringed and you need to calculate recoverable damages, contact FLAT LAW FIRM.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.