Intellectual property

The Madrid Protocol is an international treaty establishing a system for the registration of international trademarks. Thailand finally joined the other ASEAN countries Brunei, Cambodia, Laos, Philippines, Singapore and Vietnam on August 7th, 2017 by becoming the 99th member of the Madrid System. The Protocol will enter into force in Thailand on November 7th, 2017. Ministerial Regulations detailing the registration procedure and costs are expected in the coming months. Starting from this date, the Madrid System will be accessible to both local and foreign brand owners since Thailand will either act as the Office of Origin (i.e. the country in which the basic national application is filed which will serve as the basis of the international application) or be one of the designated countries in the international application. Overall, this system is time-efficient due to a simplified and centralized procedure before the Worldwide Intellectual Property Office (WIPO) since brand owners can seek registration of their marks through a single application covering up to 98 countries filed before the WIPO in one language and payment of one set of fees in one currency. This system can also be cost-effective depending on the number of territories designated in the international application. The main drawback however is the risk of a "central attack": the international registration is linked with, and is dependent on the fate of the basic national mark on which it is based during the first five years after registration. Thus, in case the international registration is based on a Thai application which is finally refused to registration, or if it is based on a Thai registration that is withdrawn, revoked, cancelled or invalidated within these five years, such international registration will be cancelled in all of the designated countries (with the option to convert into national registrations depending on the countries). It remains to be seen how the DIP will handle the influx of international applications and the challenges of translating the list of goods/services from English into Thai language.

Thailand 4.0 stands for the new stage to transform the country currently relying on heavy industries (3.0 stage) into a creativity and innovation-driven economy. Trade secrets are definitively value-based and could help pursing Thailand 4.0. On 14 March 2017, the Thai Department of Intellectual Property (DIP), the US Patent and Trademark Office (USPTO) and the Legal Committee of the American Chamber of Commerce in Thailand, joined by legal practitioners and business owners, gathered to discuss an all too often neglected intangible asset owned by almost any business: trade secrets.  Most of the owners of companies do not know that their competitive advantage, from a process to a software algorithm or formula, can be considered as a trade secret, and if adequately protected, can represent a considerable value for their businesses 1.    What is a trade secret? A trade secret is commonly defined as any business information that is not yet publicly known or not yet accessible by persons who are normally connected with the information, and for which appropriate measures have been taken to maintain the secrecy. A trade secret is valuable because it is secret. Once the general public is aware that the information exists, the legal protection is lost. There are exceptions when the trade secret is obtained through improper means (breach of contract, infringement or inducement to infringe confidentiality, bribery, coercion, fraud, theft, receiving of stolen property or espionage through electronics or other means) or from a third party, knowing or having reasonable doubt that such person obtained the trade secret through improper means. 2.       How to know if you have trade secrets? Think of what you usually protect in contracts with your business partners. What makes your business unique? What do you have that none of your competitors have? What advantage would you be afraid of losing in your business? Anything that gives an advantage over your competitors is highly valuable and worth protecting.  It does not have to be famous like the Coca-Cola formula to be a trade secret. It could be a client' list or suppliers' list, a formula or recipe that would be valuable to competitors so that they could sell, supply or produce directly from the right consumers, manufacturers and ingredients. 3.     How to protect your trade secrets? Besides the standard and physical measures that can be taken to ensure the confidentiality of your secret information (e.g.: bank vault, locker, security system, internal policies such as using passwords, placing confidentiality stamps on sensitive documents, employee badges etc.), identify who needs to know and to which extent. Limit disclosure to third parties. Not all your employees and business partners need to know. To minimize the risks, different elements of the confidential information could be divided between different parties. Request the signature of a Non-Competition Agreement and/or Confidentiality or Non-Disclosure Agreement when revealing any confidential information. No registration with the DIP is required in order to gain protection. Likewise, there is no registration requirement for the licensing of trade secrets. The DIP used to have a trade secrets database system where the owners could record their trade secrets and obtain a certification of recordal to use as a proof in case of ownership dispute. However, this voluntary recordal is no longer available since 2013 (the purpose was limited since only the names of the owner and trade secret were indicated). 4.        How to enforce your trade secrets? Remedies provided under the Trade Secret Act for infringement of a trade secret (such as unauthorized use or disclosure of a trade secret) include actual damages, punitive damages, lost profits, injunctions, destruction or confiscation of materials, apparatus, tools or other equipment used in the infringement of trade secrets. Unauthorized disclosure may also be subject to imprisonment which may not exceed one year or a fine which may not exceed 200,000 Thai baht (approximately 5,500 USD), or both. However, to date, there have been very few trade secret disputes in Thailand. Most of the infringement cases were dismissed because the Plaintiffs could not prove that the information qualified as a trade secret or that appropriate measures were taken to maintain its secrecy. The mandatory disclosure of sensitive information before and during the proceedings (what the trade secret is, why it is a trade secret, how it was infringed etc.) and the high evidentiary requirements to obtain injunctive reliefs could explain why so few cases are litigated before the Thai Courts. It is very challenging to prove the existence of trade secret infringement in Thailand without having first obtained an Anton Piller order (a court order allowing searching premises and seizing evidence without prior warning), which itself is rarely granted. For these reasons, it may sometimes be advisable to combine, or rely on other forms of intellectual property protection such as copyright or patent which are easier to protect and enforce. In the meantime, we would recommend any business owner to take a proactive approach (do not wait until a dispute arises!) in protecting trade secrets by following these three steps: 1)     Identify the valuable information that could be protected as a trade secret 2)     Assess the risks (what could go wrong?) 3)     Take measures to maintain the confidentiality of the trade secret For more information or legal advice, please reach us at [email protected] Ms. Noemie Sancelme, Coordinator/Manager of Overseas Department, Vidon & Partners

The latest legislative developments in the tobacco sector in Thailand are worrying the tobacco industry but also the food and beverage sectors as similar regulations may follow. The content of the draft Thai Tobacco Product Control Act ("TPCA") regulating the packaging and labeling of tobacco products has first been introduced in 2010 under a different Bill named draft Tobacco Consumption Control Act (or “TCCA”), and shows the ever growing restrictions imposed on the tobacco industry in Thailand. The increased size of shock-pictures and health warning statements covering the package of cigarettes is one example. Compared with its neighbors, Thailand is leading the way since 2014 with 85% of space coverage (previously, 55%). Key provisions of the draft TPCA Increase of the minimum age for the purchase of cigarettes to 20 years (instead of 18 years currently) in an attempt to reduce youth smoking (Article 26); Ban of the sale of individual cigarettes and in a number smaller than 20 for the purpose of limiting access to, and discouraging purchase of cigarettes (Article 39); Tobacco product sales restrictions such as prohibition of cigarette vending machines (Article 27); Broader definition of tobacco products to cover any item containing nicotine, including hookahs and electronic cigarettes (Article 4); Stricter rules on advertising of tobacco products such as prohibition of the display of the names or marks of tobacco products, or of the manufacturer or importer, on tobacco products or non-tobacco products and any logo or symbol that might cause the public to understand that such names or marks are the names or marks of the tobacco products or of the manufacturer or importer, prohibition of sponsorship and merchandising as forms of indirect advertisement (Articles 30-36); Obligation for manufacturers to disclose all ingredients in tobacco products to the MOPH for the purpose of obtaining the Certificate of Notification of the list of components of tobacco products, a necessary document for the sale of tobacco products in Thailand (Article 37). Since the list would be published, this disclosure requirement would jeopardize trade secret protection that may be granted to the composition of tobacco products (one condition of the protection being to remain secret); to disclose the volumes of produced and imported tobacco products, marketing costs and incomes generated from the sale of tobacco products in Thailand and any other relevant information (Article 40); Open door to the introduction of plain packaging for cigarettes by allowing the MOPH to impose the criteria and features of tobacco products’ packaging (size, color, symbol, label, trademark, pictures and messages (Article 38[1]). “Plain packaging” – also known as homogenous, generic or standardized packaging- refers to the appearance of all tobacco packages in a standardized manner: the cigarette packaging is a single color and the brand name is reproduced in a standard font, size and location. Public Health vs. Private Rights: the battle of the Giants The Thai Ministry of Public Health is defending the new text in the name of public health. For the tobacco industry, this new law (and plain packaging laws in general) are violating intellectual property rights and international treaties, encouraging illicit trade and making it difficult for consumers to identify the product’s genuine source. The Thai Ministry of Commerce is trying to conciliate the interests of both sides: whilst aiming to discourage, and help consumers quit smoking, the new Bill should not affect the rights of the trademark owners and trade secrets as protected under the Thai Trademark and Trade Secret Acts and should comply with the international agreements regarding trade and intellectual property. These concerns are shared by some WTO Member Countries such as Mexico, Honduras, the European Union, China, the United States of America and Brazil which raised a series of questions to the Thai representatives during the last WTO’s Trade Policy Review in November 2015. When asked how to ensure a fair competition environment for the sale of tobacco products, what would be the impact on trademarks currently used on tobacco products or whether similar plain packaging regulations will be extended to alcoholic beverages, Thailand reaffirmed its commitment to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and public health policy. Current legislative process: 2017, the turning point for plain packaging in Thailand? The Bill is currently pending consideration by the National Legislative Assembly. The decision is expected by March 2017 (subject to delays). The WTO ruling in the disputes relating to Australia’s tobacco plain packaging measure has been postponed to May 2017. A decision in favor of the Australian government will likely pave the road for similar regulations in Thailand. To date, plain packaging is effective in the United Kingdom since May 2016 and in France since January 1, 2017 (for retailers, manufacturers had to comply by May 2016). Whist it will be interesting to see how this story unfolds, the tobacco companies will probably not go down without a fight should the Bill be passed in Thailand, as per one of the lawsuits previously brought by Philip Morris (Thailand), British American Tobacco and Japan Tobacco International against the Ministry of Public Health before the Supreme Administrative Court in 2013 to (unsuccessfully) prevent the implementation of the larger health warnings. Mrs. Maturos Piyachotisukij, Head of Patent Department, Vidon & Partners Ms. Noemie Sancelme, Coordinator/Manager of Overseas Department, Vidon & Partners Ms. Mathilde Tachon, Consultant, Vidon & Partners They can be contacted at [email protected] > [1] “The manufacturer or importer of the Tobacco products for sale in the Kingdom shall arrange for the Package of the Tobacco products or Tobacco products to have the size, color, symbol, label including the character of the displaying of trademark, symbol, picture, and Message in compliance with the criteria, methods and conditions as notified by the Minister according to the suggestion of the Directing Commission before taking them out of the manufacturing site or before importation into the Kingdom as the case may be. No person shall be allowed to sell the Tobacco products which are not in the Package of Tobacco products or do not display the trademark, symbol, picture and Message as prescribed in paragraph one”. The initial disputed provision stating that « The law on intellectual property shall not apply to the display of the Package under this Section” has been deleted.