Thailand and the EU: a background for SMEs

Thailand is the second largest economy in south-east Asia after Indonesia, acting as an ‘anchor economy’ for the neighbouring developing economies of Laos, Myanmar, and Cambodia. Heavily export-dependent, with more than two-thirds of GDP generated by exported products, Thailand exports over EUR 93.5 billion worth of goods and services annually, over EUR 17 billion of which go to EU countries.

Thailand is the EU’s third largest trading partner in the ASEAN region, and is Thailand’s third largest trading partner overall (after Japan and China). In March 2013, negotiations were launched for an EU-Thailand Free Trade Agreement (FTA) in order to better facilitate trade and regulate intellectual property and fair competition.

Prominent Thai industrial sectors include, electric appliances, components, computer components and vehicles.

Thailand is a signatory to both the Paris Convention for the Protection of Industrial Property, and the Patent Cooperation Treaty (PCT) and has acceded to the World Trade Organisation (WTO) Agreement on the Trade Related Aspects of International Property Rights (TRIPs). In addition, Thailand is currently overhauling its major IP laws, with particular focus on the Trademark Act and the Copyright Act.

In March 2013 Thailand launched the National IPR Centre of Enforcement (NICE) as a coordinating enforcement body and has had a dedicated Central Intellectual Property and International Trade Court (CIPITC) since 1997. This being said, disturbance caused by the recent military coup in 2014 has slowed legislative development, and enforcement practices are also still somewhat lacking for the time being.

This being said, Thailand’s current legislation meets the criteria necessary under its international obligations and there is a comprehensive framework in place for registration of all major IPRs which EU SMEs should take advantage of when seeking to do business in the country.

What are design rights?

A design right is internationally recognised as an exclusive right of use, temporarily granted for a form or composition of lines or colours, which gives a special appearance to a product and can serve as a pattern for a product of industry or handicraft.

In Thailand, design rights are referred to as ‘design patents’ and cover products which have a distinctive shape, pattern, colour, or combination of these. These designs must be ‘novel’ i.e. not resembling an existing design, and not widely known or used either in Thailand, or internationally, nor referred to or disclosed in any publication prior to the filing of the application in Thailand.

As a member to the Paris Convention for the Protection of Industrial Property[1], Thailand offers applicants the ‘right of priority’ where an application has already been made in another member state, essentially changing the date at which protection is offered to the date of the original application. In order to qualify for right of priority, applicants must make their application in in Thailand within 6 months of the original filing abroad.

Protection for design patents lasts 10 years from the date of filing, or priority date where appropriate. The process of registration typically takes 2 years and is relatively inexpensive, with the bulk of the costs stemming from agency fees where an appropriate local attorney is employed (highly recommended for non-Thai nationals).

Obtaining design patents in Thailand

Applications for design patents in Thailand must be made in Thai, or accompanied by a Thai translation. Applicants may be individuals or corporations, however where they have no domicile/head office or real business operations in Thailand they must be represented by a qualified agent. Even where not strictly required, the Helpdesk recommends that EU SMEs employ such an expert in order to avoid potential pitfalls and streamline the application process.

Applications must be made to the Department of Intellectual Property (DIP) at the Ministry of Commerce and must include the following documents:

• Details of claims
• Relevant drawings
• Details on colours claimed, where appropriate
• Name and address of the applicant
• Name and address of the designer
• Priority documents, if claiming prior date
• Deed of assignment, if the applicant is not the designer
• Statement of applicant’s rights, if the applicant is the designer
• Power of attorney, where the application is made by an agent

Enforcement

There are three main avenues for IP enforcement available in China, as well as a system of customs control which we will discuss in more detail in a future Helpdesk article. In many cases however, private mediation via legal professionals can be an effective first line of defence and should be considered as a viable option. In the event of infringement SMEs are encouraged to seek advice and support from legal professionals as to the current domestic administrative/judicial policy and the chances of success of different actions. SMEs are of course also welcome to contact the Helpdesk for free advice on how best to react to infringements and find the right lawyer to deal with your case.

Administrative actions

Due to a lack of resources and proper training in administrative enforcement agencies, coupled with weak punishments imposed on confirmed infringers, administrative measures are generally seen to be ineffective in Thailand. The system also suffers from leaks and corruption which undermines raid actions and investigative procedures.

This being said, the Thai government has committed to improve its administrative enforcement agencies with a focus on large-scale infringers and dangerous goods, primarily in ‘priority areas’, such as MBK and Panthip Plaza in Bangkok, Patong, Kata, and Karon beaches in Phuket, Walking Street in Pattaya, etc. These actions are not likely to have a significant impact on patent infringement however, and it is unclear where exactly improvements will be made and how this will affect the system as a whole.

Civil litigation

Civil litigation is rarely used for IP cases in Thailand due to difficulties in proving ‘actual damages’, the lack of a formal discovery process, and the delays common in prosecuting cases. In addition, the Thai judiciary is still inexperienced in dealing with IP issues and case outcomes can be unpredictable.

Civil courts can in theory grant injunctions and awards of damages, however, difficulties in proving ‘emergency’ make injunctions rare and damages are still very low by international standards, often not covering the costs of bringing the action to court in the first place.

Criminal prosecution

Criminal prosecution is generally considered to be the most cost-effective enforcement mechanism available to IP rights holders in Thailand. However, search warrants are difficult to obtain and, as with administrative actions, leaks and corruption in the police force can render them fruitless.

The Thai judiciary has also been reluctant to impose harsh penalties on infringers, and as such there is little deterrent provided by even high profile criminal actions. Penalties for trade mark infringement for example can include a maximum fine of approximately EUR 10,000 and/or a prison sentence of up to 4 years. Fines rarely reach the maximum threshold however, and most sentences are reduced or suspended, especially for first-time offenders.

South-East Asia IPR SME Helpdesk Team

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@southeastasia-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The South-East Asia IPR SME Helpdesk is co-funded by the European Union.

To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.