Enemy at the Gates: Thai Anti-Counterfeiting Border Control Measures

Copyright 2001 Edward J. Kelly, Esq.
Dana Christine Bergling, Law Intern
Tilleke & Gibbins International Ltd.

Article 51 of TRIPS required all member countries, including the Kingdom of Thailand, to adopt measures allowing owners of Intellectual Property Rights (hereinafter "IP Owners") to obtain suspension of release of imported counterfeit trademark or pirated copyright goods by the customs authorities. In Thailand, this requirement is satisfied in theory by (a) the adoption of rules and regulations of the Customs Department and (b) the Rules for Intellectual Property and International Trade ("IP&IT Rules") Cases B.E. 2540 (1997).

Organized under the Ministry of Finance, the Thai Customs Department is responsible for border enforcement of IP rights. On the other hand, the IP&IT Rules are applicable to Thailand's specialized Intellectual Property and International Trade Court (the IP&IT Court"). Despite these complementary sets of rules and regulations designed to aggressively wage an anti-counterfeiting battle at Thailand's borders, there are calls for adopting a more comprehensive regulatory regime governing both the importation of the equipment and raw materials needed to make pirated products (such as optical media products) as well as the equipment necessary for operation of counterfeit goods production facilities.

Reportedly, Thai officials from a number of agencies have been working with private sector advisors to draft comprehensive legislation. The draft, yet to be formally approved by the Minister of Commerce, full Cabinet or Parliament, is said to build on recently enacted legislation in Hong Kong and Malaysia, and would apparently cover both equipment and raw materials used in the counterfeit good trade.

Clearly, Thailand is considering how it can more fully integrate customs, foreign trade, domestic trade, revenue and consumer protection agencies into the comprehensive enforcement of IP rights. Improved border controls (along with more effective use of tax, fraud and other laws targeting organized criminal activity) was an action item clearly highlighted in the joint Thai-US Action Plan of 1998.

Clearly, Thailand is considering how it can more fully integrate customs, foreign trade, domestic trade, revenue and consumer protection agencies into the comprehensive enforcement of IP rights. Improved border controls (along with more effective use of tax, fraud and other laws targeting organized criminal activity) was an action item clearly highlighted in the joint Thai-US Action Plan of 1998.

Jurisdiction of the Customs Department

According to Customs Act (No. 12) B.E. 2497, Customs officers have the power to search without a warrant within the Customs Control Zone. The exercise of this authority must be based on reasonable cause, and not only property/goods may be searched but persons as well. Customs Laws B.E. 2496 grants Customs Officials the power to open and examine packages while the packages are passing through Customs. The same law allows officials to board and search vessels within the Kingdom's boundaries. Customs officials also have the authority to arrest persons on reasonable suspicion of an offense against the Customs Laws.

It is important to note that Customs officials will generally not, as a practical matter, take the initiative to inspect goods believed to be counterfeit through the import and export process. The IP owner generally must be the impetus for the investigation of any shipment that is believed to contain the infringing goods. Accordingly, Customs officials generally do not examine incoming or outgoing goods unless they receive a complaint from the IP owner.

Customs Department Rules and Regulations

The importation and exportation of pirated products alleged to infringe on trademarks and copyrights comes within the ambit of Customs regulations issued pursuant to Section 5 of the Export and Import Act 1979. These regulations permit an IP owner to lodge a petition with the Customs authorities to prevent the release of the suspect goods from the Customs officials' control. Suspected copyright and trademark infringement claims are handled with slightly different methodologies.

Copyright Infringement: Pirate Goods

If a copyright owner has cause to suspect that the goods are reproductions or modifications of a copyrighted work (i.e., a "pirated work"), the owner may pursue remedial action in a variety of different ways. The web of regulations that apply include:

Customs officials have the authority to seize pirated goods under Notification No. 94. Notification No. 95 authorizes officials to halt shipment of products believed to be reproduced or adapted from the copyrighted work of another person. A copyright owner or licensee may make petition pursuant to Notification No. 95 to the Customs Department for inspection of the products before they are released to the importer, but there must first exist reasonable cause to believe that the works were reproduced or adapted from a copyrighted or licensed work.

In addition to the Customs regulations, an IP owner also has the option of filing an application in the IP&IT Court for an order of injunction preventing the importation or exportation of goods, provided of course that the IP owner has met the heavy burden of proof on the infringement claim.

Trademark Infringement: False Designation of Origin or Counterfeit Goods

For cases of suspected trademark infringement, customs enforcement procedures are governed by the Notification of the Ministry of Commerce Governing the Exportation and Importation of Goods 1987 ("Notification"). Under the Notification, the authorities are authorized to prevent the importation and exportation of products with forged or confusingly similar trademarks either registered in Thailand or overseas.

The Notification provided for certain regulations and pronouncements outlawing the importation or exportation of goods bearing a false designation of origin, including:

In order to proceed under this Notification, a Trademark owner has to first file with the Trademark Registrar, then, when the pirated products are seized, a petition must be filed with the Customs Department seeking examination of the suspect goods.

Part 2