Anti-Counterfeiting
Campaigns: Strategies for Thailand
Copyright
2001
Edward J. Kelly, Esq., David Lyman Esq.
Tilleke & Gibbins International Ltd.
I.
Introduction: Thai Legal Remedies for Trademark Infringement
Thailand's
government and police authorities are consistently under heavy pressure
from multi-national companies owning registered trademarks because of
a perceived lax attitude toward adequate protection of Intellectual Property
Rights (IPRs). While the problem of trade in counterfeit goods is not
unique only to Thailand, trademark owners are justified in their assessment
that counterfeiting of trademarked products is indeed rampant in the jurisdiction.
The
continued presence of a glut of counterfeit goods manufactured and sold
in Thailand is especially remarkable because it is seen despite the promulgation
of one of the most aggressive legislative schemes to facilitate enforcement
efforts of any country in Southeast Asia.
The
Thai Department of Intellectual Property (DIP) has in recent years sponsored
well-publicized public education initiatives designed to educate its population
that trade in counterfeit goods has damaged Thailand's ability to migrate
from a primarily agrarian economy to an industrialized economy that can
compete in the globalized marketplace. Of special concern to the DIP is
the United States Trade Representative (USTR) Special 301Watch List, which
has an obvious impact on Thailand's export oriented economy. Increasingly,
counterfeiting activity is no longer seen as an "innocent" vice
conducted by small-time traders. There is a recognition that counterfeiting
of manufactured goods is just one part of the diversified portfolio of
immense and well-organized criminal organizations also responsible for
trade in drugs, weapons, and human smuggling.
Despite
the recent efforts of the DIP to "crack down" on the infringement
of trademarks, the laws of economics act in juxtaposition to the laws
protecting IPRs. Supply is readily available because of the downturn of
the economy, the increase in unemployment (approximately 1 million workers
unemployed as of September 2001) and cheap labor costs. Moreover, Thai
workers' renowned skill in traditional handiwork is easily transferable
to the manufacture of high quality imitations that are often quite difficult
to detect without specialized training. Demand is also ever-present because
of the constant flow of indiscriminate tourists and vacationers eager
to obtain a bargain for their yen, dollar, euro or pound sterling.
As
a timely example, the recent visit of Manchester United's football team
to this soccer-infatuated nation was accompanied by an enormous output
of fake Man U apparel that cost one-tenth the price of an original. Our
intelligence was that up to twenty factories immediately began to manufacture
fake shirts to meet domestic and foreign demand. We were disappointed
to see very little action taken by the trademark owner to enforce its
valuable mark.
The
legal framework for the protection of marks in Thailand is set out in
the Trademark Act, B.E. 2534 (A.D. 1991), as amended by the Trademark
Act (No.2) B.E. 2543 (A.D. 2000, the Penal Code and the Civil and Commercial
Codes. Under this framework, there are essentially two alternatives to
proceed to take legal action against an infringer: a criminal action and/or
a civil action.
II.
Criminal Action
The
most cost-effective remedy available to the owner of a trademark that
is registered in Thailand is found in the Thai Trademark Act. Section
44 of the Act provides that when a trademark is registered, the person
registered as the proprietor of that trademark shall have the exclusive
right to its use for the goods in respect of which registration has been
granted.
Penalties
for forgery of a trademark registered in Thailand can include fines up
to 400,000 Baht (approximately 9,000 USD) and prison sentences up to four
years (usually reduced or suspended for first time offenders). A trademark
owner may bring criminal charges against an infringer by either submitting
a complaint directly to the Court, or more commonly, lodging a complaint
with police authorities. Penalties for imitation of a mark registered
in Thailand are similar but less severe. The key point to remember is
that the mark must be registered in Thailand in order to have the full
range of protections provided in the Trademark Act. Infringement of foreign
registered marks can also lead to criminal sanctions, but the fines are
dramatically less and provide little deterrent effect.
Significantly,
unlike the Copyright Act, which provides for allocation of fines imposed
against copyright infringers, all fines imposed under a criminal trademark
action escheat to the government. Moreover, a trademark owner may not
"settle" with the offender after a complaint is filed and a
raid is taken. The action must be pursued by the responsible Public Prosecutor
to judgment. Accordingly, in a clear cut case of infringement involving
an established Thai business with assets and responsible Managing Directors
(as opposed to a blatant counterfeiting operation), one might consider
first reaching out to the infringer with a "Cease and Desist"
or "Request for Cooperation" letter in order to achieve any
objective short of full criminal prosecution.
Another
complementary remedy may be found in the Thai Penal Code Title VIII "Offences
Relating to Trade." For example, Section 272 of the Code states,
as translated: "Whoever (1) uses a name, figure, artificial mark
or any wording in the carrying on trade of the other person, or causes
the same to appear on goods packings, coverings, advertisements, price
lists, business letters, or the like in order to make the public believe
that it is the goods or trade of such other person . . .shall be punished
with imprisonment not exceeding one year or fine not exceeding two thousand
baht, or both. The offence under this section is a compoundable offence."
Section
274 of the Code states that "Whoever imitates the registered trademark
of the other person, whether it be registered within or outside of the
Kingdom in order to make the public believe that it is the registered
trademark of such other person shall be punished with imprisonment not
exceeding one year or fine not exceeding two thousand baht, or both."
As
stated in the Code, this remedy is available to owners of marks not registered
within the Kingdom, but given the paltry amount of the fine, this is not
seen to be an effective deterrent.
III.
Civil Action
In
addition to Section 44 of the Thai Trademark Act quoted above, civil action
for "passing off" may be taken pursuant to Section 420 of the
Civil and Commercial Code, "CCC", states that "A person
who, willfully 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."
Therefore,
under Thai commercial law, a trademark owner is entitled to take civil
action against an infringer for use of its mark without authorization.
In a civil suit, an owner could request a permanent injunction against
the offender and/or recover any actual proven damages. However, in practice,
most trademark owners prefer to proceed under criminal law because of
the uncertainty of outcome, costs, delays and difficulty in collection
of judgment assets associated with civil litigation against infringers
in Thailand.
Worth
noting is that there is no dedicated statute specifically promulgating
unfair competition laws other than the Penal Code "Offences Relating
to Trade" described above. As a general matter, trade dress protection
doctrines are also not recognized under Thai law.
IV.
Traditional Suppression Efforts
Traditionally,
trademark owners have directed their anti-counterfeiting efforts to investigations
to identify manufacturers or exporter/importers of counterfeit products
or components, as well as street hawkers and retail sale operator stores
and their suppliers. Police raids were arranged, with the offending goods
being seized for later disposal, all under the authority of the Thai Trademark
Act. These efforts by many trademark owners over the last decade has had
some measurable impact on the production, trade and export of a wide variety
of counterfeit products. However, there is a great deal of room for improvement.
In
the present environment, it easy to recognize that even countries with
very stringent anti-counterfeiting laws have not been successful in stopping
the production and trade of fake products. It is as easy, for example,
to buy a fake Rolex watch on the streets of any major metropolitan area
in the U.S. or Europe as it is on the streets of Bangkok.
Part
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