In recent articles we examined Thailand’s laws relating to intellectual property. We’ll now look at the implementation of those laws, because even the best laws are useless if they are weakly enforced.

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Unfortunately, in Thailand enforcement actions to suppress counterfeit activities have been inadequate. Though the statistics are somewhat dated, it was reported that seizures and raids conducted in 2009 resulted in a relatively paltry 8,000 arrests of IP violators and the seizure of 5.1 million IP-infringing goods. This in a market saturated with counterfeits at street level and, more importantly now, in one of the region’s key hubs for the transshipment of counterfeit goods between countries. One issue may be corruption. It can’t be coincidence that on the day of a raid in a mall an unusual number of shop owners may decide not to show up to work. As rumours of a raid spread to other shops, shop owners scramble to hide all infringing products before law enforcement officers arrive on the scene.

What can be done when IP rights violations are detected? There are civil and criminal remedies. Criminal prosecution remains the most common type of action for trademark and copyright violations, in part because of the speed, lower costs and absence of a need to quantify the damages. Penalties available when bringing a criminal action may include the imposition of fines of up to 400,000 baht and imprisonment for up to four years, depending upon the nature of infringement. Yet Thai judges have often been reluctant to impose harsh penalties on infringers, especially for those for whom it is a first offence. This is particularly true at the retail level, with Thai vendors and distributors often being viewed as small cogs in increasingly complex multi-jurisdictional counterfeiting operations.

Civil litigation is a viable option but is a rarely used method of enforcing intellectual property rights, perhaps because civil cases can be more costly and there is a high burden of proof. Last year, there were only 278 civil cases filed in the Central Intellectual Property and International Trade Court, and 119 of these cases were transferred over from 2012 due to procedural delays. By comparison, 5,328 criminal cases for intellectual property rights enforcement were heard last year.

Finally, an increasingly important tool to combat counterfeiting and other IP rights concerns is the ability to use so-called “border measures” by working directly with the Thai customs department, in a request for intervention, to prohibit the import or export of IP infringing goods. Again though, this remedy will be toothless if corruption intervenes.

Classic deterrence theory posits that to have a deterrent effect, punishment must be swift, certain and appropriately severe. In Thailand arguably none of these targets are being met.

Legal consequences for IP violations are often anything but swift, particularly in civil cases. They are far from certain, in part due to corruption, and they are often so mild as to be priced like a mere “speeding ticket” for a business, rather than at a level that threatens the business’s existence. By way of example, in a case concerning infringement of pharmaceutical trademarks the Supreme Court ordered the defendant, who manufactured pills with an almost identical name to those manufactured by the multinational pharmaceutical company with the patent on the drug, to pay damages of only 5,000 baht per month until the defendant stopped the trademark infringement. An adequate deterrent? Probably not.

Thailand’s weak enforcement of intellectual property rights is noted in the annual report (the Special 301 Report) issued by the US Office of the Trade Representative (USTR), which identifies positive advances and areas of continued concerns regarding intellectual property in countries that are US trading partners. Since the Special 301 Report’s inception in 1989, Thailand has consistently appeared every year on its “Priority Watch List”.

The Priority Watch List status is considered to be the worst classification given to foreign countries that deny adequate and effective protection of intellectual property rights, or deny fair and equitable market access to US persons relying upon intellectual property rights protection, under the US Trade Act. Other countries on the Priority Watch List in 2014 include China, India, Russia, Algeria, Argentina, Chile, Indonesia, Pakistan and Venezuela. Political considerations influence the list, as evidenced by the frequent inclusion of Canada, despite its relatively robust intellectual property regime, and the omission of various less-developed nations with no meaningful intellectual property protections at all. Why does Thailand enjoy its perennial status as a member of the Priority Watch List? Among other things, the USTR cites Thailand’s failure to implement legislation to address (i) landlord liability for housing IPR infringing goods (think of those notorious malls in Bangkok) and (ii) the unauthorised recording of films in cinemas. It also cites the lack of enforcement action against widespread piracy and counterfeiting, and lack of adequate sentences for infringers. Recall though, from our preceding articles in this series, that Thailand is currently undergoing major reforms to create specific legislation to deal with (i) anti-camcorder law; (ii) landlord liability; (iii) enhanced border enforcement; and (iv) reforms to the existing copyright and trademark acts. Perhaps with these legislative developments Thailand will graduate from the Special Watch List to the Watch List or beyond.

While uploading and sharing a pirated video may (erroneously) seem like a victimless crime, surely we can all agree that the manufacture and sale of products such as unsafe counterfeit vehicle parts or pharmaceutical products is far from victimless. Only with adequate intellectual property rights laws and enforcement mechanisms can we be sure that consumers are protected and inventors are incentivised.

Originally published in the Bangkok Post:

http://www.bangkokpost.com/news/investigation/425955/all-bark-and-no-bite-ip-law-enforcement-part-iv