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IP Strategy Valuation of IP Assets New Invention Investigation and Enforcement IP Contracts

IP Litigation

Ananda IP litigation team represents clients in front of the IPIT Court and Supreme Court such as trademark, copyright and patent infringement cases as well as cases against Department of Intellectual property (appeal of refusal of registration of our client’s rights).

Description of some of court cases handled by our firm can be found under our recent cases section and under our press section.

This section aims to provide an overview of remedies available and quick tips in case of IP infringement (criminal prosecution, civil enforcement, border measures, anti-counterfeiting online) as well as preventive measures and strategic recommendations to IP rights holders. For more information, please contact us.

An introduction to litigation and enforcement of IP rights in Thailand

Counterfeiting continues to persist and remain a challenge for many IP right holders in Thailand.

Commonly counterfeited goods include a wide range of products ranging from apparel goods, CDs, DVDs, computer software, watches, mobile phones, electrical appliances, electronic equipment, spare parts, cosmetics, pharmaceutical and food products and many other consumer products either produced in Thailand or imported from overseas, increasingly from China and neighbouring countries.

IP rights holders often point out Thailand’s lenient legislation and sentencing practices which tend to undermine some recent positive developments such as the establishment in 1997 of a specialised court, the Central Intellectual Property and International Trade Court (CIPITC) or the implementation of various Memorandums of Understanding between enforcement agencies and IP rights holders.

Criminal prosecution

Criminal prosecution is by far the most popular type of action used by IP rights holders to enforce their IP rights in Thailand, especially trademark and copyright owners. As an example, in 2011 alone, 4,000 cases of trademark infringement were handled by the Central Intellectual Property and International Trade Court.

The preferred course of action in case of infringement is a criminal action involving a police raid and subsequent criminal prosecution before the Central Intellectual Property and International Trade Court. Such action can be initiated after the IP rights holder (or its representative) files a complaint with the relevant police force.

What are the Thai enforcement agencies?

There are several enforcement bodies in Thailand:

  • the Department of Special Investigation, which was established in October 2002;
  • the Economic Crime Investigation Division, a specialised police unit widely used by trademark owners;
  • the Metropolitan Police Bureau;
  • the Provincial Police Bureau;
  • the Food and Drug Administration.

Quick tips regarding criminal enforcement

  • Quicker, cheaper option than a civil suit in most cases;
  • Helps to secure evidence of infringement for preparing a civil action.
  • Evidence of infringement must be prepared and submitted when filing complaint and in order to obtain search/arrest warrant;
  • Reported cases of corruption of enforcement officers;
  • Lack of training of some enforcement authorities;
  • Leniency (small fines up to a maximum fixed amount as per the law) and lack of deterrence is often pointed out;
  • Difficulty to catch “influential targets” or even raid some areas well-known for selling counterfeit products, including markets and shopping malls in Bangkok;
  • Landlord liability is lacking.

Criminal enforcement of trademark infringement and remedies

Trademark infringement occurs frequently in Thailand and is not specific to a particular type of industry. Brands of pharmaceutical, chemical, cosmetic, food, electronic and luxury products, machines, spare parts, toys, furniture and even services (hospitality, transport, travel, financial services, insurance etc.) to cite a few examples are frequently copied. Trademark infringement causes economic losses to legitimate trademark owners, impacts their brands’ reputation and poses health risks to consumers as fake products are usually produced without safety standards.

It is essential for trademark owners to register their brands and maintain active protection of their brand. A trademark protection strategy is strongly advised before the launch of any new brand and preferably before entering the Thai market. This is particularly true in the case of Thailand where the process for registration of a trademark usually takes around one year. Brand registration, anticipation of possible infringement and anticipation of costs eventually associated with enforcement actions and/or loss of sales do not suffice to solve the problem of counterfeiting but do a lot to prevent major catastrophic scenarios.

It is also important to differentiate between the text of the law and the reality of enforcement situations. In case of trademark infringement it is worth noting that the law says that trademark owners can enforce both unregistered trademarks and registered trademarks in Thailand. However this should not be interpreted as an indication that brand registration is not necessary. Registered marks receive a considerably broader protection than unregistered marks. Registered marks benefit from the protection of the provisions contained in the Trademark Act while unregistered marks are protected through provisions of the Thai Penal Code and the Civil and Commercial Code. Infringers of a trademark registered in Thailand may be liable to imprisonment of up to four years and/or a fine of up to 400,000 THB, while infringers of an unregistered trademark may be liable to imprisonment of up to three years and/or a fine of up to 6,000 THB.

Moreover registration also allows the possibility of preventive measures to prevent the use of a counterfeit mark by an infringer.

A key message to readers is that it is always preferable to register mark(s) prior to any enforcement action.

Criminal enforcement of patent infringement and remedies

It would be redundant to our previous paragraph to list industries, which are confronted with patent infringement in Thailand. However, there is a significant difference between patent and trademark protection. While trademark owners can apply for a trademark protection at any time, patent owners can only file patents for new inventions and there is no such thing as unregistered patent protection.

In other words, in situations where companies have not filed a patent application in Thailand or when an invention has already been disclosed, no enforcement for patent infringement is possible. This may sound obvious to companies well informed about patent laws but it is frequent that IP law firms receive clients, including foreign companies who have already disclosed their invention (through product sale, exhibition at an international fair etc.) before realising that they have not filed a patent application or that it is too late for them to extend their patent protection to Thailand. Even multinational companies with patent protection in Europe or USA sometimes realise too late that they have omitted to protect their patent rights in Thailand.

In case of patent infringement, registered patent owners can rely on the provisions of the Thai Patent Act, which sets out penalties for infringement of patents for inventions (up to two years imprisonment and/or a fine not exceeding 400,000 THB) and petty patents/design patents (up to one year imprisonment and/or a fine not exceeding 200,000 THB). Criminal cases of patent infringement are however rare in Thailand in particular for patents for invention. This is due to several factors. First, the timeframe to obtain patent registration in Thailand, as already pointed out, can exceed 10 years, a situation which considerably affects the rights of the patentee. Due to the rapid development of technology and short lifetime of consumer products, an invention which is 10 years old may already be out-dated or may have been replaced by a more efficient or innovative product or process. Then, civil suits are more adapted to patent enforcement where the goal of the patentee will be to collect licenses or receive compensation for patent infringement. Out-of-court settlements and mediation are also very frequent since both parties usually have an interest in avoiding disclosure of their dispute settlements.

Criminal enforcement of copyright infringement and remedies

Core copyright industries are those predominantly involved in the creation, manufacture, production, broadcast and distribution and sale of copyrighted works and activities. These industries include: press and literature, music, motion picture and video, radio and television, photography, software and databases, visual and graphic arts, advertising services and copyright collecting societies. However virtually every type of industry may claim some copyright protection: literary content on product notices, advertising, website content, databases, proprietary software, pictures, films, books etc.

Copyright piracy in Thailand is a longstanding problem. It is one of the main reasons for Thailand being listed on the Priority Watch List of the United States Trade Representative. CD/DVDs, and software piracy in Thailand costs hundreds of millions of dollars to the copyright industry and despite a few positive signals, legislative changes and stronger commitment of enforcement authorities are repeatedly called for by the copyright industry. Legislative amendments to the Copyright Act such as amendments to tackle online piracy, Internet Service Provider liability, piracy of cable and satellite signals etc. remain to be adopted. Currently, in case of copyright infringement, the Copyright Act provides that if the offence is committed with a commercial purpose, the offender shall be subject to imprisonment for a term of between six months and four years and/or a fine of 100,000 THB to 800,000 THB.

The following table illustrates the various penalties under Thai Copyright law. As you can see, there is no criminal liability in case of reproduction, adaptation or communication of copyright work when there is no commercial intent of the infringer:

Reproduction, adaptation, or communication of copyrighted work Non-commercial 20,000-200,000 THB none
Reproduction, adaptation, or communication of copyrighted work Commercial 100,000-800,000 THB Six months to four years
Importation, distribution, sale, or communication to the public Non-commercial 1,000-10,000 THB none
Importation, distribution, sale, or communication to the public Commercial 50,000-400,000 THB Three months to two years

Although fines foreseen in the law seem to be quite significant, final fines applied by CIPITC are usually in the lower end of the range and considered as not being dissuasive enough even when the infringement was intentionally committed for a commercial purpose. In addition, real culprits of organised crime are rarely found and arrested. Out of the 3,000 copyright infringement cases handled every year by the CIPITC very few present a significant penalty.

On the positive side, large seizures of counterfeit copyright products (such as DVDs) occur more and more regularly in Thailand (especially due to the increased efficiency of Thai customs). Various memorandums of understanding have also been signed between enforcement authorities and have strengthened their cooperation and the overall efficiency of enforcement actions in Thailand.

Civil enforcement

In addition to criminal remedies, IP rights holders owners may rely on the provisions of the Civil and Commercial Code which provides that “a person who, wilfully or negligently, unlawfully injures the life, body, health, liberty, property or any right of another person, is said to commit a wrongful act and is bound to make compensation therefor”.?

There are few civil actions related to IP infringement in Thailand. While CIPITC handles 7,000 cases every year on average, fewer than 300 of these cases are civil cases.

This figure can be explained by the fact that civil cases are usually more costly and lengthy for the plaintiff, require a very high burden of proof and that ultimately the assets of the defendants (i.e. IP infringers) are difficult to assess or to seize. Rights holders shall carefully consider the need for civil enforcement and be prepared to show strong evidence to delimitate the scope of the infringement and to allow the CIPITC to evaluate the damages.

On the positive side, civil actions can be useful in many ways:

First, for obtaining a permanent injunction against the offender and to claim damages. In the case of copyright infringement for example, the CIPITC may order appropriate damages for the rights holder by taking into consideration the gravity of the damage and by including lost profits and expenses incurred in enforcing the IP rights.

Then, for obtaining preliminary injunctions. The IP system in Thailand provides for a preventive injunction system in order to preserve relevant evidence in relation to the alleged infringement. These preliminary injunctions can be extremely helpful to add pressure on the defendant.

Quick tips regarding civil enforcement

  • Possibility to obtain permanent injunction and monetary compensation for damages caused by the infringement.
  • Possibility to request preliminary injunction.
  • Usually more lengthy and costly procedure than criminal enforcement.
  • Need to provide strong evidence of infringement and commercial prejudice.
  • Difficult to enforce the Court’s decision when the defendant does not have assets or declares its activity bankrupt.

Border measures

In addition to pursuing a criminal or civil action against infringers, IP rights holders can also rely on the provisions of the Thai Customs Act to prevent the import or export of IP-infringing products.

Border measures may only be used against counterfeited trademark and pirated copyright products. It remains unclear whether the Customs Act provides protection for patent-infringing products but it is expected that the Customs Act will be revised shortly to clarify this issue. In practice, the majority of customs seizures of IP-infringing products are of trademark-infringing products.

Trademark owners have different options to request the assistance of Thailand’s Customs in detaining suspect shipments of counterfeit goods:

Option 1: Trademark owners can first notify the trademark registrar at the Department of Intellectual Property of their request to prohibit the importation/exportation of the products bearing a counterfeit mark. The Department of Intellectual Property will then officially forward such request and all supporting documents to Customs. Customs will have the possibility to inform the trademark owners or their representative of any suspected shipment and ask them to inspect the products in order to confirm whether these are counterfeits. Customs officials have only 24 hours from the date of detention to obtain confirmation that the goods are counterfeit. If the goods are not inspected before the expiry of the 24-hour deadline, the suspected counterfeit items are subject to release.

If the seized goods are confirmed to be counterfeit, customs officials will file a claim against the importer based on importing prohibited goods and have the authority to fine the importer. Generally, the fine is two-and-a-half times the market value of the goods as determined by Customs, had the goods been released. If the importer does not comply with the Customs Committee’s order, the case will be referred to the CIPITC. The court has the authority to fine an importer up to four times the value of the seized goods. The seized goods are generally destroyed.

Option 2: Trademark owners can also, after having notified the trademark registrar at the Department of Intellectual Property, file a petition to ask Customs to detain a suspected shipment they may have identified. In such a case, trademark owners need to provide detailed information regarding the suspected shipment known to arrive in Thailand or shipped from Thailand. They will be required to provide customs officials with specific and detailed information regarding the shipment such as the name or identity of the vessel suspected of carrying the counterfeit goods, the time of arrival in Thailand, the place where the goods are to be kept and the name of the importer.

Rights holders are generally satisfied with the work carried out by Customs officials and it is highly recommended for any company concerned about import or export of counterfeit products into/from Thailand to work closely with Customs.

Some companies have also obtained very positive results by organising training sessions for Customs officers and circulating notices/information on how to detect fake products.

Quick tips regarding border enforcement

  • Quick, simple and cost-effective
  • Allows seizure of large shipments of counterfeit items before they reach the local or export markets
  • Efficient for seizing trademark infringing products
  • File a notification with Department of Intellectual Property in order to make sure that Customs officials can contact you/your representative in case of suspected shipment
  • Make sure to inspect the detained goods within 24 hours
  • Provide training for customs officers so that they can identify counterfeit products and make sure to update them on your new products and/or IP rights.

Anti-counterfeiting online

Online shopping is quickly increasing in Thailand in particular among young, urban customers seeking to purchase a wide range of products ranging from clothing, electronics, movies or cosmetic products – and so is the online sale of counterfeit products.

Online piracy is the quickly becoming attractive for IP infringers, less likely to be caught. In addition, although intellectual property laws sanction the sale of counterfeit products, they do not specifically sanction the sale of counterfeit products online. There are no specific procedures or penalties detailed in current intellectual property laws in relation to online piracy.

IP rights owners have so far only been able to take action against online piracy by traditional means, namely sending cease and desist letters to domain name holders or, after investigation, conducting raids against storage facilities, warehouses linked to individuals/companies identified as proposing infringing products online. The outcome of these actions is highly unpredictable and can prove costly to IP rights holders if investigation does not allow finding large quantities of counterfeit products. Then, monitoring online piracy in Thailand is not as easy as it seems. Most online counterfeiting websites are in Thai while online piracy detection software usually uses roman characters. Trademark owners need to turn to local Thai counsel and investigators to monitor the Internet for trademark infringement. A few local companies have seen an opportunity and proposed local monitoring programs.

Intellectual property rights holders can also try to rely on the provisions of the Computer Crime Act of 2007 which allows competent officials to obtain computer data and to inspect or access a computer system, computer data, computer traffic data or computer data storage equipment. It also allows for the seizure of a suspect computer system. The Computer Crime Act includes however no specific provisions dealing with online trademark infringement and there are contradictory views as to whether the offence of inputting forged computer data into the system in a manner likely to cause injury to another person covers online trademark infringement. A new approach involving the Ministry of Information and Communication Technology consisting of filing a request to shut down websites that offer fake goods for sale is being discussed and it remains to be seen whether such an approach allows for a clamp down on online piracy. IP rights holders are strongly advised to join forces and raise the issue of online piracy to relevant authorities so that amendments to existing laws can be implemented.

Preventive measures, strategies and key recommendations

Availability check and prior registration

Prior check of availability and registration of intellectual property rights in Thailand is strongly recommended. There is simply no better investment or preventive measure than obtaining registration of a trademark, patent, design or even copyright in case you want to protect your intellectual property assets. Registered rights give you the option to enforce your rights, while unregistered rights usually do not, or at a much higher cost.

Trademark availability searches and prior art searches should not be overlooked as they can greatly help you to determine your strategy, freedom to operate and of course monitor your competitors. To give an example, trademark squatters but also counterfeiters monitor trademark databases to see which trademarks have not been registered or renewed. Competitors of your company will also look for products and/or designs or processes, which you may not have patented in order to use your technology or creativity. One example is generic drug companies, which regularly check whether pharmaceutical companies have filed patents for all their products.

Most of these preventive measures (availability check, registration) do not require a significant investment and budget considerations should not deter companies to protect at least some of their assets. There are no official fees for copyright recordation in Thailand and fees – including lawyers’ fees – for filing a trademark application or a design patent are manageable even for start-up companies or individual inventors. Patents for invention can be more costly but then represent an investment that should offer a return in the medium or long term.

Adopt protection and enforcement strategies

Seeking the services of local counsel who have experience in dealing with intellectual property protection and who have good contacts with various government agencies is recommended. Protection and anti-counterfeiting strategies need to be tailored, pro-active and realistic to meet the business needs and goals of IP rights holders. Local counsel should be able to provide legal opinions, recommendations, vulnerability audits, freedom to operate studies or litigation strategies, which would allow IP rights holders to make informed decisions. Strategies in particular should not be designed without a clear understanding of how far Thai laws can be interpreted and practically enforced.

Build awareness

Building awareness and growing an IP culture within the company is also essential. The role of local distributors and licensees in monitoring the local market, the implementation and control of confidentiality within the company or the record of inventions and new designs are practical examples of what companies can do to stress the importance of IP for their business activity.

Communication is also essential. Copyright notices, trademark notifications, conferences, organising training such as training of enforcement authorities and participation to IP seminars are just a few examples of what companies can do to communicate their IP assets and build awareness. Annual training and workshops for customs and police officers are powerful tools in creating awareness of how to differentiate counterfeit goods from genuine goods and in keeping the authorities aware of your IP issues. These programmes also help to educate the authorities about the damage that counterfeiting causes to the national image and international trade.

Join forces

Rights holders should consider joining forces and seek the support of professional organisations, trade associations or chambers of commerce. Not only can participation in IP working groups, such as the recently created EABC IPR Working Group, help companies to learn about best practices, they also offer the possibility for these companies to directly address their issues to the relevant authorities and/or comment on proposed pieces of legislation. In some cases, joint enforcement actions can also help to reduce costs for individual brand or copyright owners.

Cooperate with national anti-counterfeiting agencies

Rights holders should cooperate proactively with all national anti-counterfeiting agencies. Good working relationships can only result in increased efficiency in the fight against counterfeiters. Close relationships with enforcement authorities such as the police and Customs are crucial. IP law firms or investigation agencies acting on behalf of their clients and rights holders themselves are welcome to provide training to enforcement authorities. Providing Customs with booklets or CDs allowing them to distinguish legitimate products from counterfeit goods has proved effective. A final tool is the signature of memoranda of understanding such as the 2006 memorandum signed between the Department of Intellectual Property, enforcement agencies, private rights holders, law firms, investigation firms and department stores. The aim of this memorandum was to target notorious areas for action to suppress the sale of counterfeit products. For example, the memorandum provides that if a retailer has been raided twice, the landlord must evict the tenant.

Make use of technology to help to identify fake products

Whenever possible, companies should look for technologies, marking systems or devices, which can be applied to genuine products or packaging to help consumers or enforcement authorities to recognise authentic articles. This is particularly important for products, which have a direct impact on consumers’ health (such as medicines). Bar codes, holograms, seals, micro-letters, chips, anti-refilling systems, tamper-proof boxes etc. can be useful to protect original products from being copied and allow consumers to differentiate real from fake products.

Know when to adapt, stay persistent

Our final recommendation is to be flexible yet persistent. Intellectual property protection strategies need to be re-examined periodically and adapted to business strategies and/or the environment. A good protection strategy goes step by step. Once you have a goal set, stay focused and always show strong commitment to protecting your intellectual property.