Thailand Law Journal 2014 Spring Issue 1 Volume 17

III. Dilution Under International Framework

This part of this article will assess the status of dilution under an international framework as well as the recognition of dilution in some ASEAN countries: Thai, Malaysia and Singapore.

There is no obligation imposed under the Paris Convention to protect trademarks against dilution. Although the protection provided for well-known marks appears in Article 6bis, it is based on the confusion concept of traditional trademark infringement. Furthermore, uses are limited to identical or similar goods that contrast significantly with the theoretical concept of dilution: the use upon dissimilar goods.⁴¹ Regarding the TRIPS Agreements (TRIPs), Article 16(3) expands the scope of protection for well-known marks in Article 6bis of the Paris Convention to cover the later use upon non-competing goods and services, and it is debatable whether or not this provision is considered anti-dilution protection under international law.

On one hand, Daniel Gervais believes that it is intended to protect against dilution.⁴² On the other hand, ilanah believes that the likelihood of confusion is necessary for Article 16(3); therefore, it provides no obligation for contracting parties to protect well-known marks against dilution. Due to the reference to Article 6bis, a literal interpretation of Article 16(3) requires the elements that are confusion-imposed by Article 6bis: connection and injury. Therefore, it merely extends the protection based on the traditional confusion of well-known marks of Article 6bis, although the wording of 'connection' instead of 'confusion' is used.⁴³ From this point of view, TRIPs sets the basic requirements for contracting parties, but there is nothing that prohibits members from providing better protection.

In my view, the second argument is justifiable, because referencing to Article 6bis cannot be ignored, where Article 16(3) is interpreted, and this way of interpretation is also supported by the Singapore Court of Appeal in Novelty Pte Ltd V Amanresorts Ltd&Ano [2009] 3 SLR(R) 216.⁴⁴

Anti-dilution protection under TRIPs is subject to the arguments and different ways of interpretation giving rise to different outcomes. However, a clearer expression is found in the Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks. However, it is not binding, because it is merely a guideline for the contracting parties of the Paris Convention. Article 4(1)(b)(ii) identifies the dilution concept.⁴⁵ However, only dilution by blurring is found here. There is no provision that mentions dilution by tarnishment.

Except for the unsettled debate on Article 16(3) of TRIPs, all other international laws do not impose any obligation on members to provide protection against dilution, while nothing prohibits members from doing so. If llanah's argument is correct, then there is no international obligation binding states to provide protection against dilution.⁴⁶

Dilution Under Thai Laws
The Trademark Act

Before the dispute between Starbucks and Starbung, diluting behaviors in Thailand have caused trademark proprietors to suffer from the gradual dwindling of their selling power and erosion of their trademarks' advertising value. Unfortunately, there are no specific laws to prevent dilution. In practice, most cases depend on consumer confusion, even though the Thai courts have shown their willingness to protect well-known marks. This can be seen in Compaq Information Technologies Group, L.P v Intel Inter Marketing Co., Ltd.⁴⁷ The defendant's trademark 'COMPAC was held to be confusingly similar to the plaintiff's trademark 'COMPAQ'; thus, the cancellation of the defendant's trademark was ordered, irrespective of the fact that the parties' goods were dissimilar: computer products and furniture. Although it is believed that this decision demonstrates a good opportunity in the development of the concept of dilution in Thailand, the decision favoring the plaintiff was a result from the application of the Thai Trade Mark Act 1991 (TMA) concerning grounds for the refusal of a registration of marks, which are identical or confusingly similar to well-known marks. The scope of the Trademark Act is limited to confusion-based infringement. The decisions of the courts and the Trademark Board have never mentioned dilution. It seems to be that the TMA is not designed to cover dilution, as appears in the relative grounds for refusal in Section 13(2), which significantly contradicts the nature of dilution. This is because public deception is a prerequisite and it applies only to similar classes of goods or services.

Section 13. 'Subject to Section 27, the Registrar shall not register a trademark applied for upon finding that: (1) it is the same as a trademark that is already registered by someone else or; (2) it is so similar to another's registered trademark that the public might be confused or misled as to the proprietor or origin of the goods, provided the application is for goods of the same class or for goods of a different class found by the Registrar to be of the same character.'

The wording of Section 13(1) suggests that Section 13(1) might be interpreted to cover dilution because marks that are identical to previously registered ones are proscribed from being registered, regardless of similarity or dissimilarity between the goods. Public deception is also not a prerequisite. Nonetheless, there are some limitations that make it inappropriate to fully tackle diluting actions, and it does not cover a situation where an earlier mark is not registered in Thailand and is not blatantly copied: similar marks.

Another possible provision is Section 8(9)⁴⁸ that functions as absolute grounds for refusal. It is used to reject a mark from registration, which is found to be against public policy and periodically used to reject an application for a mark proven to belong to someone else, even one whose mark is not registered in Thailand, to form a basis of rejection on the grounds of a previously registered mark. For example, CHANEL SA successfully opposed the registration of LIFEFORD CHIC CHANEL in the same classes, even though there was dissimilarity between the marks and an absence of public deception. The Trademark Board found that the word 'CHANEL' was chosen in bad faith and went against public policy.⁴⁹ Unfortunately, the application of this general provision depends largely on the sole discretion of the authorities, so there is a chance that similar situations might get totally different results.

Finally, Section 8(10)⁵⁰ is about well-known mark protection, granted irrespective of being registered in Thailand or not, against-an identical or very similar mark, that might cause public confusion as to the origin of goods. Here again, confusion is required.
To conclude, applying the existing provisions in the Thai Trademark Act to cover dilution is not appropriate "and may not provide sufficient protection. First, they are not designed to proscribe trademarks from being diluted. Therefore, a literal interpretation will lead to traditional trademark infringement rather than dilution. Second, the application of this law, beyond what is stated in it, contradicts correct legal interpretation of civil law country like Thailand. Due to the fact that confusion-based infringement is clearly different from dilution in both requirement and objective, it would not be suitable to stretch confusion-based provisions to apply to dilution. If applying these provisions to prohibit dilution, it potentially renders vagueness, and some situations may not be covered. In addition, confusion adheres strongly to the assessment of authorities as a practical matter. This can be seen in the Nike International Ltd., v Mr. Chatchawarn Metawisarn. Even though a dispersion of uniqueness on its swoosh design was raised by Nike in this case, it was never addressed and considered as grounds of successful opposition.⁵¹

This shows that the TMA is quite limited and based on consumer confusion. The injury caused by dilution sometimes cannot be proven by the application of confusion-base provisions; therefore, specific anti-dilution provisions or laws would be more appropriate way to solve diluting problems.⁵² Would it be a silver lining in any provision in the Trade Competition Act or even the Thai Civil and Commercial Code that could be applied to the damages caused by dilution?

The Trade Competition Act 1999

Section 29, aims to prevent unfair trade practices, can possibly be applied to dilution because it is a 'catch all provision' that is designed to have a broad scope in order to catch unfair trade practices, which do not fall in the scope of Sections 25-28: Anti-Monopoly Provisions.

Section 29: 'A business operator shall not carry out any act, which is not free and fair competition, and has the effect of destroying, impairing, obstructing, impeding or restricting the business operations of other business operators, or preventing other persons from carrying out business or causing their cessation of business.'

According to the guidelines of the Thai Trade Competition Commission, Section 29 is capable of preventing free riders from the intention to produce similar products' features or packaging of other traders and selling it side-by-side to make consumers confused and misunderstand the origin of the products. Despite the possibility of catching diluting behaviors arising from the similarity between shape marks, this section might not provide a precise scope of protection against dilution. The guidelines provide an example by basing it on consumer confusion, so it is questionable that, without confusion, would the Commission be willing to accept that diluting actions cause negative effects as required in this section?⁵³ If not, then this section should not be applied. As a practical matter, Section 29 has never applied to diluting behaviors; therefore, the Trade Competition Act might not lead to the best solution in tackling dilution, because there is uncertainty in its application, and it could not provide a clear scope of defense. Moreover, not every form of dilution might cause negative effects that are required in Section 29.⁵⁴ With regard to the enforcement under this act, there has never been a case brought to the court under this act for more than a decade of its application. The ineffective enforcement of the Trade Competition Act has been widely criticized; thus, this weakens the idea of employing this act to combat diluting behaviors.