Question: What categories of intellectual property are recognized in Thailand?

Answer: Thailand’s Intellectual Property Regime is governed by the following Statutes, each devoted to a specific type of Intellectual Property. The Intellectual Property and International Trade Court is vested with exclusive jurisdiction to hear disputes pertaining to Intellectual Property.

1. Trademark Act, B.E. 2534 (1991)
2. Copyright Act, B.E. 2537 (1994)
3. Patent Act, B.E. 2522 (1979)
4. Trade Secrets Act, B.E. 2545 (2002)
5. Protection of Layout-Designs of Integrated Circuits Act, B.E. 2543 (2000)
6. Optical Disc Production Act, B.E. 2548 (2005)
7. Protection of Geographical Indications Act, B.E. 2546 (2003)
8. Plant Varieties Protection Act, B.E. 2542 (1999)
9. Act on the Establishment of and Procedure for Intellectual Property and International Trade Court, B.E. 2539 (1996)

Question:  What are the basic requirements and level of protection afforded to the different categories of intellectual property?

Answer:  To qualify for legal protection, patents and trademarks require registration with the Department of Intellectual Property. Copyrights and trade secrets automatically qualify for protection.

Very broadly, ownership rights of such Intellectual Property are systematically recorded and made available for public access upon payment of fixed fees.

Question:  What international conventions and treaties regarding intellectual property has Thailand signed and ratified?

Answer:    In addition to the above mentioned legislation at the national level, Thailand is currently (as at September 2014) a member of several relevant international treaties as follows:

1. Paris Convention for the Protection of Industrial Property
2. Berne Convention for the Protection of Literary and Artistic Works
3. Patent Cooperation Treaty
4. Convention Establishing the World Intellectual Property Organization
5. ASEAN Framework Agreement on Intellectual Property Cooperation
6. Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)
7. International Treaty on Plant Genetic Resources for Food and Agriculture
8. Madrid Protocol (not ratified yet by Thailand’s Parliament; ratification is scheduled for 2014-15)

Question:  Who owns the intellectual property in an employer-employee relationship in Thailand?

Answer:  There are two types of Intellectual Property that must be addressed: patents and copyrights.

In a contractual relationship created either by employment or work for hire, the right to apply for a patent is bestowed upon the employer, unless stipulated to the contrary in the contract. In the same breadth the employee (inventor) has an equal right to receive remuneration over and above standard wages if it is shown that the employer has benefitted directly from the invention that was patented in the employer’s name. This right to receive remuneration cannot be waived or curtailed by contract. Relevant ministerial notifications formulate a process by which the employee-inventor may apply to the Director-General of Intellectual Property in order to have his right to remuneration enforced. The Director-General in turn must fix the amount of remuneration upon considering various qualifying criteria as laid down in ministerial notifications.

Copyrights in any work created over the course of employment vest with the author-employee unless it has been otherwise stipulated by contract.

Work done on a commission basis is treated differently: ownership is accorded to the employer in such cases. The employer is not obligated to recompense the creator of the work, apart from the agreed compensation set by the hire agreement.

Question:  Who owns the intellectual property in a contractor-subcontractor relationship in Thailand?

Answer:  As above

Question:  Are there any special considerations for the licensing of intellectual property in Thailand?

Answer:  On a very rudimentary level, an intellectual property license agreement otherwise known as a technical license agreement may be defined as a contract, executed by two or more parties, which entitles one or more parties (the licensee) to use the intellectual property of the owner (licensor). It is crucial to distinguish this concept from Assignment, which involves the complete transfer intellectual property and the underlying rights to the assignee. In a license agreement, the actual right of ownership still remains with the owner.

Usually, a license agreement is temporary or for a pre-determined duration and includes a royalty/license fee which must be paid to the licensor by the licensee.

The law applicable to a certain agreement would depend purely on the subject matter of the agreement.  For example, computer programs are governed by the Thai Copyright Act, B.E. 2537 (1994). Likewise, inventions and industrial designs on the other hand are protected by the Patent Act, B.E. 2522 (1979), and all relevant amendments up to Patent Act No. 3, B.E. 2542 (1999).

In contemporary parlance, a technical license agreement contemplates the provision and supply of knowledge to another person together with specific rights to use the intellectual property of the owner. Typically these are industrial products, and as such are generally patents. Therefore, such technical license agreements would fall under the Patent Act.  Another common category of technical license agreements are franchise agreements which typically consist of a bundle of rights to use various intellectual property including copyrights, trademarks and service marks, patents and trade secrets.  Each of these categories of intellectual property is covered by their respective law.

Since an Act usually empowers all competent government officials every statute on the topic of intellectual property has several Ministerial Regulations. These, usually being important in the further development, interpretation, and application of an Act, are not always available in English.

Furthermore, one has to be apprised of the Unfair Contract Terms Act and Trade Competition Act in addition to several Supreme Court decisions which could influence the way contracts are interpreted in Thailand and consequently even license agreements.

In summary, it is pertinent to know the specific provisions affecting technical license agreements under each category of intellectual property.  Specific legal advice tailored to your needs is critical.

A. Technical License Agreements Pertaining to Patents

 A patent holder (i.e., patentee) may license any other person to exercise the rights conferred upon him under Section 38 of the Patent Act. However, a joint owner of the patent may grant a license only after having obtained the consent of all other joint owners under Section 40.

A patent license agreement must be in writing and must comply with the registration and procedural requirements prescribed the by Patent Act read with Ministerial Regulation No. 25, B.E. 2542 (1999) as issued under the Patent Act. In essence, the patentee must file an application in the prescribed format together with the proposed patent license agreement either at the Department of Intellectual Property (“DIP”), Ministry of Commerce, or the Provincial Commercial Office, or other relevant government entity.

In the case of a patentee who is not resident in Thailand, a representative must be designated and accordingly registered after successfully submitting an appropriate application accompanied by a power of attorney to the Director-General of DIP.

A patent, utility model or design owner may grant a license to another person, subject to the following restrictions, as per Sections 38 and 39 of the Patent Act read with the Ministerial Regulation No. 25:

  • An owner may not impose any condition, restriction or royalty requirement defined by Ministerial Regulations as constituting unfair competition or contrary to the provisions of the Unfair Contract Terms Act and the Trade Competition Act.
  • An owner may not implement a term that requires the licensee to pay royalties after the license has expired.

In addition, under Thai law the license must be:

  • in writing, and
  • registered with the Department of Intellectual Property.

On a related topic, compulsory licenses also are possible since Thailand is a signatory to the Paris Convention, from which Section 45 of the Patent Act relating to Compulsory licenses has been derived.

As per section 46 of the Patent Act, any person can apply to the Director-General for a license of a certain patent if it appears at the time when such application is filed that the patentee unjustifiably fails to exercise his legitimate rights.  Typical situations include the following:

  • that the patented product has not been produced or the patented process has not been applied in the country, without any legitimate reason; or
  • that no product produced under the patent is sold in any domestic market, or that such a product is sold but at unreasonably high prices or does not meet the public demand, without any legitimate reason.

However, the applicant for a license must show that he has made an effort to obtain a license from the patentee having proposed conditions and remuneration reasonably sufficient under the circumstances, but was unable to reach an agreement within a reasonable period.

The patentee could in response prove that the applicant intends to use the license to infringe the patent, as per Sections 47 and 47 bis of the Patent Act.

However, if such a compulsory license is granted, the patentee is entitled to remuneration.

B. Technical License Agreements Pertaining to Trademarks, Service Marks, and Certification Marks

Once registered, the owner of a trademark (i.e., licensor) retains sole rights to use the trademark. He may then enter into license agreements in order to allow other persons to use his trademark. According to Section 68 of the Trademark Act, a trademark license agreement has to be:

  • in writing; and
  • registered with the Department of Intellectual Property

Furthermore, the technical license agreement

  • has to contain conditions or terms between the licensor and the licensee to ensure the effective control of the licensor over the quality of the products it is used for, and
  • a description of the goods the trademark is intended to be used for.

The owner of the trademark would need to maintain effective control over the trademark otherwise undesired third persons would be able to petition for the cancellation of the license, as per Section 72 of the Trademark Act.

As per Section 80 of the Trademark Act, the above mentioned provisions, other than those relating to licensing, would also apply to certification marks and service marks.

While a certification mark may be considered appurtenant to the term technical, on account of Sections 90 and 91 of the Trademark Act, it can only be assigned, not licensed.

However, with regard to service marks there is no specific provision which prohibits the licensing like there is for certification marks. Therefore the above mentioned rules for trademarks, apply to service marks.

According to Section 94 of the Trademark Act, all rules that apply to trademarks shall also apply to collective marks with the exception of Chapter I, Part 5, which relates to licensing. Given the special nature of a collective mark, licensing may have been deemed unnecessary by the legislature. 

C. Technical License Agreements Pertaining to Copyrights

The owner of a copyright can grant a license to other persons to use or exercise rights with respect to the copyrighted work. A perusal of Section 15 of the Copyright Act shows that the assignment of a copyright is not required to be in writing. However, this is neither advisable nor practicable. Relevant Ministerial Regulations also forbid licensing agreements that monopolize market conditions or impose unfair limitations on competition.

As per Section 32 of the Copyright Act, a license is not required for copyrights in a variety of cases:

  • For research and study of non-profit work
  • For personal benefit or the benefit of other family members or close relatives
  • For comment, criticism or introduction of the work with an acknowledgement of the ownership of copyright such work
  • For reporting of news through mass-media with an acknowledgement of the ownership of copyright in such work
  • For reproduction, adaptation, exhibition or display for the benefit of judicial proceedings or administrative proceedings by authorized officials or for reporting the result of such proceedings
  • For reproduction, adaptation, exhibition or display by a teacher for the benefit of his teaching provided that the act is not for profit
  • For reproduction, adaptation in part of a work or abridgment or making of a summary by a teacher or an educational institution so as to distribute or sell to students in a class or in an educational institution provided that the act is not for profit
  • For use of the work as a part of questions and answers in an examination

D. Technical License Agreements Pertaining to Trade Secrets

Trade Secrets often comprise an integral component of the bundle of intellectual property rights that constitute technical license agreements.  According to Section 5 of the Trade Secret Act, trade secrets can be transferred and by inference, even licensed. In order to do so, the agreement needs to be in writing and signed by both parties. There is no specific international agreement signed by Thailand on the topic of Trade Secrets. Therefore, the general rules from the following agreements apply:

  • Convention Establishing the World Intellectual Property Organization
  • ASEAN Framework Agreement on Intellectual Property Cooperation

That being said, only general rules on infringement (Section 6 of Trade Secrets Act), breach of contract (Civil and Commercial Code) and the Criminal Code (Sections 323 and 324) apply.

E. Technical License Agreements Pertaining to Agricultural or Bio-Genetic Usage

The Plant Varieties Protection Act does not place any overt or explicit restrictions on licensing agreements. However, under Section 32, it does mandate proper registration of any new plant variety in order to derive recognition under the law thereby to exercise relevant rights of ownership including licensing. As in the case of patents, joint-owners of a particular plant variety can enter into license agreements only with the consent of other joint holders.

All agreements must be made in writing and accordingly registered with the designated Registrar as prescribed under the relevant Ministerial Regulations.  We note, however, that the relevant Ministry has not issued any regulations clarifying this Act at this time and hence this is quite a new area of Thai law.

F. Technical License Agreements Pertaining to Layout-Designs of Integrated Circuits

Licensing is expressly recognized under Section 24 of the Protection of Layout-Designs of Integrated Circuits Act. License agreements must be in writing and duly registered for recognition of rights thereto. Joint ownership would necessitate consent of all joint owners prior to execution of any licensing agreements. The Director-General of the Department of Intellectual Property exercises the discretion to order publication of any registration of a license agreement or contract of assignment.

Final Licensing Considerations

It is of paramount importance to ascertain the true nature and intent any license agreement prior to execution. Normal prudence would dictate that the license agreement be in writing, duly signed and registered with the appropriate office. The license agreement should mandatorily describe the subject matter of the license, the intended products and technicalities governed thereto, the duration of the license and the royalty fees to be paid.

In order to minimize litigation, an effective and realistic dispute resolution clause must also figure prominently in any technical license agreement. Thai courts including the Central Intellectual Property and International Trade Court are under no treaty obligation to enforce foreign court judgments.  They will, however, enforce valid, foreign arbitral awards since Thailand is a member of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (i.e., NY Convention).  Furthermore, compliance and enforcement mechanisms should also exist in such agreements.  In this way if there is a breach, the breaching party will automatically be required to engage in certain actions without the non-breaching party having to go before an arbitrator or get a temporary injunction from a local court.