Thailand is suppressing fake and counterfeit goods but intellectual property infringement remains
2017 raids on Bangkok’s gigantic shopping centres which for decades were a mecca for foreigners to Thailand to buy counterfeit products have signalled an end to Thailand’s fake industry boom. However, while authorities stamp out fake goods, other areas of intellectual property abuses are increasing in particular online.
Thailand’s open market boom in counterfeit and fake branded goods, software, moves and music is in the decline. Decisive action in 2017 by the Thai government, more aggressive enforcement of the law, education and new legal provisions are all playing their part. Thailand has recently been removed from the top tier of the US government watch lists on intellectual property infringement. However the problem of counterfeiting and patent infringement remains a difficult one to solve with many observers, including those working in the legal industry, believing it is actually on the increase. The issue of intellectual property rights has a broad impact on life in Thailand as it develops its economy, society and standard of living.
Thai government achieves success in fighting counterfeiting
Thailand was taken off the US government’s priority watch list in respect of intellectual property infringement and counterfeiting in 2017 but remains on a lower tier list. This was achieved by an intelligent but persistent campaign waged by the Thai government to deal with a fake goods and counterfeiting epidemic that had spiralled out of control and had become damaging to Thailand’s image and significantly, to its efforts to attract inward financial investimet.
Raids on favorite shopping centres for foreigners seeking fake bargains
The campaign included a series of raids on key markets and shopping centres in Thailand which had been identified by US trade representatives to the government in prior representations as key sources of concern to the United States. These centres had become synonymous with pirated goods, often at the expense of US rights holders. In targeting the industry, the Thai government issued warnings to some operators while shutting down others. It was revealed that international rights holders and Thailand’s Department of Intellectual Property had conducted sweeps of the centres particularly the MBK and Pantip centres in Bangkok, in advance of these operations where violations were detected.
Campaign led by Thailand’s Intellectual Property department
The campaign, led by the Department of Intellectual Property in Thailand, reached out to land and property owners leasing or renting retail space to operators as well as seeking cooperation between the Royal Thai Police, Thai Army and other law enforcement agencies. One cooperating agency was the Railway of Thailand, which owns land in Bangkok’s famous Chatuchak market, a favorite for tourists and Thai locals alike where bargains can be found. The campaign involved prosecution of copyright law offenders, issuing directions and warnings as well as the withdrawal of leases to those involved in serious and persistent offences.
The Thai government has also moved to strengthen the country’s protection for intellectual property owners and to speed up the registration of new patents and copyright marks to allow for such protection. Thailand’s intellectual property rights are overseen by Thailand’s Intellectual Property and International Trade Court while enforcement of the law and monitoring is undertaken by Thailand’s Department of Intellectual Property and civil lawyers representing rigts holders.
Lady Gaga sparked Thai government protest
Thailand is a country that had become infamous for its counterfeit or copy industry. A tour stop by the famous US singer Lady Gaga in 2012 sparked controversy when the star went out of her way to purchase a fake Rolex watch at a Bangkok street market and posted the event on her Twitter account. The incident lead to a complaint from the Thai government to the United States that the publicity damaged the Thai government’s attempts to stamp out piracy.
Attitude to counterfeiting in Thailand is changing
The scale of the counterfeit industry in Thailand is difficult to imagine. However there is no doubt that the Thai government has recently been working assiduously to stamp it out particularly in the last three years. The effects have been noticeable, not only in visibility but also in attitudes. ‘Thai people are quite intelligent and increasingly clued in to international affairs with TV programmes explaining issues. This has been one of them. Many small traders are now taking action themselves as the message has gotten through; fake brands or goods are no longer ok,’ says David Matthews, a UK expat and commentator in Bangkok.
Foreigners and visitors to Thailand attracted to cheap fake culture and bargains
Many visitors to Thailand will be familiar with the impressive array of counterfeit goods from exquisitely crafted Rolex and Tag Heuer watches to handbags and shirts. The craft of the counterfeit industry had reached such heights that their adaptation of brands has come full circle with ingenious T shirts on sale in Bangkok making fun of famous US corporate brands. To many visitors to Thailand the industry had become part of the holiday experience and an economical way of buying souvenirs and gifts for family and friends at home. People do not appreciate the fact that the activity is illegal and that the goods can, in theory, be seized and indeed on rare occasions, they are, by custom officials at any airport.
Piracy and counterfeiting also part of the domestic Thai economy and keep prices low
However, the industry also satisfies a local market. The cost of living in Thailand is relatively low with far lower incomes than western averages. To many Thai people, being able to pick up branded artefacts and other products at a fraction of the cost is a necessity and part of life. The industry covers computer software, with pirated versions of the world’s most expensive software being sold from $5 to $7. It had become quite common in Thailand to buy a computer without the Windows operating system and to be directed to a third party vendor who would sell and install a pirated version. In the last two years there has been noticeable change in this activity and this has come about through more robust law enforcement by the Thai authorities and initiatives by US tech giants, making special offers and payment terms available online to Thai users.
MBK and Pantip raided by Thai law enforcement fighting piracy
There have been aggressive raids on famous Thai shopping centres which have become vast emporiums for technical gadgets and software. One of the most famous is Pantip Plaza in Bangkok. It is a popular shopping destination for foreigners and tourists looking for bargains along with the equally famous MBK shopping Centre. Both had become favorites for foreigners looking for bargains. Both venues were raided by officers of the Intellectual Property Department of the Royal Thai Police in June 2017 alongside other venues in Bangkok and throughout Thailand.
US tech giants also respond positively to the problem of piracy in Thailand in massive raids
The innovative and very effective initiatives by the US tech giants with specials deals and attractive payment terms made available to private and small business users in Thailand. These moves have been inspired and show a deep understanding of the Thai market. Combined with publicity in Thailand and education, the effect has been significant. ‘I am a computer programmer and I started with a range of bootlegged DVDs from the MBK after I graduated,’ says Ake who now works with an international programming company. ‘Over the last ten years it has come about that it is prudent to buy the right software. The deals are good and the companies provide the backup. I think that part of the culture is changing.’ Ake’s view is growing as Thai people, at all levels, begin to appreciate that quality is also a key factor. This also applies to the growing numbers of expats and foreigners who live in Thailand. ‘Yes my new computer has a legit version of windows, my last two all experienced problems at some point including having the wondown programme blocked. So now it’s only an extra B1,500 baht for peace of mind,’ says David.
Counterfeiters in Thailand not dead in the water yet
However the enterprising nature and the knack of catering for consumer needs means that the counterfeiters cannot be ruled out yet. The range of counterfeit products extends to nearly every business in Thailand including films and DVDS, computer software as well as branded clothing and fashion wear.
US companies reproducing Thai pirate’s knack of offering a good price and service
What has made the industry so alluring is the the low price but also the attention detail an craft that allowed them to make a products that at first glance looks identical to the expensive product. They were able to offer the users the benefit at a fraction of the cost. Invariably, the quality fades or there are other issues. These products do not stand the test of time. It is this aspect together with high profile government enforcement and more awareness that is changing people’s minds in Thailand. The initiatives by US companies in the software sector are novel and impressive and point the way to the future. ‘What made the counterfeiters so effective was that Thai service knack of offering the product at the right point to the customer and in the right way. What software companies like Windows an Adobe in the US are doing is winning back their market in the same way with the help of a new enforcement climate,’ says Matthews.
Internet is the new frontier for Thailand’s intellectual property war and an uphill battle
The latest twist in Thailand’s love affair with counterfeit activities is the use of the internet and social media to produce counterfeit viewing options for international TV hit shows and movies. The ingenuity and enterprise of Thailand’s rip of industry can only be marveled at but this is a potential new headache for the Thai government. Not only is it dealing with pressure form the US government to get more robust at protecting international property rights but it is also coming under pressure from Thailand’s own burgeoning music and film industry.
Thai film industry suffering from Thai pirates
One Thai film director told the Bangkok Post in 2016 that cam recording of his latest movie were being shown on the internet before the film was ever released. Poj Arnon is one of Thailand’s most successful film directors directing such movies as Hor Taew Tak, Mor 6/5 and Luang Pee Jazz 4G.
One industry observer estimates that the scale of the losses to Thai film companies alone could be 1 billion baht or $33,000,000. This represents 25% of the total market for the small but burgeoning Thai film industry. Authorities in Thailand have recently realised the importance of the film industry in promoting the country’s unique culture and heritage. One of the most popular Thai movies ever made was the Legend of King Naresuan, a three part series for films released from 2007 to 2011 with a budget of 700 million baht. The movie series was also released in the United States and depicted the life story of a legendary Thai king who ruled Siam from 1590 to 1605.
Many film industry insiders in Thailand feel the loss caused by piracy and counterfeiting undermines the ability of the industry to find funding for new projects. Poj Arnon, the Thai Film director has been reported as despondent about the situation. Even where cases are prosecuted in Thailand the fines that can be imposed are limited with a maximum fine of 200,000 ($6,500) rising to 800,000 for large commercial operations and a four prison sentence.
Prosecution of piracy offenders online is difficult in Thailand and requires stiffer penalties
Thailand’s Department of Intellectual Property points out that movies streamed using the social media network Facebook can easily be deleted and so far there has not been a successful prosecution in relation to such activity. The Deputy Director of the Intellectual Property Department has confirmed that such activity is on the rise in Thailand.
Thailand’s Motion Picture Association has confirmed that the proliferation of copyright infringement and piracy via all popular social media in Thailand is a cause of concern. These include favorite Thai applications such as LINE, YouTube and Facebook.
Thai government introduces new laws to fight piracy
The Thai government, in January 2018, introduced draft legislation updating the country’s laws to specifically enhance intellectual property rights allowing authorities and IP owners to take faster action against those infringing intellectual property rights. The draft legislation also makes provisions to limit the liability of internet service providers. The law creates an offence specifically for those operators who use new media to circumvent the legitimate copyright owners of material. Thailand’s Motions Picture Association is affiliated with the Motion Picture Association of America. In 2016 the Association, through its Deputy Director Umasiri Taron called for measures to allow authorities to shut down and block such websites more quickly in Thailand. ‘Watching movies online has become popular now, as it is easier, more accessible and convenient,’ she said in an interview with the Bangkok Post.
Link between pirated online contented and porn ads
Campaigners against the piracy of on intellectual property rights in Thailand have also been quick to point out that the sites hosting such material are spewn with illicity advertisments for porongraphy and pharmeaceutical products. A professor of information technology at the University of Massey in New Zealand, Mr. Paul Watters has shown in studies that Thailand leads the world in the intensity of such advertising in particular for pornographic material.
Thailand’s anti piracy campaign is long term
The Thai government has had some success in its drive to confront the onslaught of intellectual property rights abuses over the last four years with a relentless campaign involving enforcement, raids, legal changes and also education. Advertisements have been produced pointing out that such activity is a serious crime. These are aimed specifically Thai audiences and there have been moves to include the subject of intellectual property rights in the Thailand’s education curriculum.
Thailand’s shifting culture towards intellectual property rights
Moon is a trader who works at Bangkok’s Chatuchak Park market and sells T Shirts and clothes. She, like other traders are now more aware of the issue of brand names and copyright ownership. She tells our reporter that they receive approaches from police every six months or so searching for copyright infringements. It has meant that she herself is now more careful about the products she displays and sells. She no longer sells products with famous brands or that may get her into hot water with the law.
In the centre of Bangkok we meet a trader selling T Shirts with international brand names. He sets up his stall near the road on a daily basis in the evenings. He tells our reporters that he pays a monthly rent for this privilege and that he can’t see what’s so wrong with selling T Shirts that are of good quality at a cheap price. ‘I am not robbing anyone, I’m just selling these T shirts,’ he cries. Not so far from him is a stall openly selling fake Rolex and Tag Heuer watches to the side. The seller says that the products are made in a factory in Taiwan by skilled craftspeople reproducing the famous designs to a fraction if a millimetre. He understands that he is breaking the law but his attitude is that he has to take care of his family here in Thailand and again he cannot see the harm in two people making a good bargain on between the other. However he does concede that soon he may have to find a new line to sell as the climate is becoming more difficult.
Counterfeiting industry success in Thailand is about a flair for business and service
There is no doubt that the scale of Thailand’s counterfeiting industry has had something to do with a peculiar fair that Thai people have for both business and replicating good design. Many of those involved are young people with also a fair share of women. Most small traders in Thailand are in fact Thai women who have traditionally been the business people particularly at street tader level. However there is certainly evidence that there is a greater awareness that the activity is illegal in 2018 then there was say 10 years ago and many traders particularly women talk about looking for an alternative.
Link between fake goods and international tourism to Thailand which is flourishing
Some authorities in Thailand have now established that there is a link between Thailand’s tourism industry and the counterfeiting culture and industry on the ground. As part of its campaign there are some efforts to educate tourists also.
Thailand has a comprehensive intellectual property legal regime to enforce laws
It would be very wrong to think of Thailand as the wild west with regard to intellectual property rights and the rule of law. The country has very comprehensive intellectual property legislation and an effective legal system. However there is a range of practical issues across all areas involving intellectual property that must be considered by Thai authorities.
Eleven years ago the then Thai government took action to allow a relaxation of intellectual property rights with regard to drugs in an effort to reduce the price of drugs in the country and to make them available in the interests of public health. This was important to Thailand’s successful campaign to combat the threat of Aids.
The initiative involved granting government use licenses to import and develop 7 generic medicines for the use of patients in Thailand under a provisions in Thailand’s intellectual property law. Thailand, like many developing countries, is also anxious to attract foreign investment and work in cooperation with developed countries in particular the United States. The Thai government has to achieve a balance in upholding the international legal intellectual property rights framework but also ensuring the best possible outcome for Thai citizens.
Piracy and counterfeiting a step on the way in Thailand’s economic development
Thailand is a very entrepreneurial country with almost zero unemployment. It can be argued that the counterfeit industry and the ingenious applications devised by may small traders and business people has been essential for the country at key points in its development. On the other hand the Thai government recognises the importance of building a respect and trust for intellectual rights in Thailand and to ensure the country aspires to higher consumer and industrial standards that these laws represent. Many Thai companies are now owners of valuable intellectual property. There is also safety implications as many products produced through intellectual property infringements can be dangerous or hazardous.
Leading Thai law firm opened counterfeiting museum
Suebsiri Taweebon is a partner with Tilleke and Gibbins, the biggest law firm in Thailand specialising in intellectual property rights. The company has won international awards for its legal operations in Thailand on behalf on intellectual property owners and on behalf of Thai companies defending themselves in intellectual property disputes. In addition to Thailand, it has six offices in five other Asian countries. In 1989 the company set up an intellectual property museum inhouse displaying thousands of fake products with their genuine counterparts in an effort to show the full extent of the counterfeiting war that Thailand is experiencing. The museum is used by government officials in Thailand, Thai police and court officials,legal students, tourists and even the media has had eyes opened into what fake goods and counterfeiting in Thailand is all about.
Legal expert sees progress in the visibility of counterfeit goods in Thailand
Speaking in a media interview Mr. Suebsiri says he believes that there has been a noticeable decrease in the public display and visibility of fake goods in Thailand in the streets and the markets. However he believes as do law enforcement officials that the overall industry of counterfeiting and exploitation of intellectual property rights is increasing on an industrial level. Mr. Suebsiri offered a fascinating insight into the enforcement operations that his company undertakes on behalf of international intellectual property rights owners whose rights are being exploited in Thailand.
Growth in patent infringements and industrial abuse of intellectual property rights
One of the key areas of growth he revealed is in patent infringement within the production of products whereby those infringing IP rights are using patented designs and production processes without infringing the international company’s brand. This occurs particularly when companies formerly licensed in Thailand to produce goods and products continue to produced the patented goods under a different brand name after the license has expired. Mr Suebsiri gave the example of sportswear where hundreds of thousands of sportswear apparel were seized during a raid on the ex licensee of an international brand and rights holder. Mr Suebsiri explained that such raids involve obtaining an Anton Piller order from Thailand’s Intellectual Property court by civilian legal representatives of the rights holder which allows a premises to be raided and evidence seized in a case involving intellectual property infringement. Mr Suebsiri even revealed that it sometimes might be a tactic to send an undercover person into the company committing the infringement to gather intelligence and evidence.
Thai home in Saraburi became an illegal shampoo factory offering all popular brands
The danger of not respecting intellectual property rights can be seen from a 2016 raid on a private home in Thailand’s Saraburi province. Thai police found that the home was being used as a shampoo factory where discarded bottles of shampoo were being refilled with a soap based concoction and the bottles resealed. These were subsequently sold through shops throughout the province and even in Bangkok. The brands on the bottle included Dove, Head and Shoulders, Pantene, Sunsilk and Loreal.
A more elaborate scheme erupted in Thailand in April 2018 when Thai Police called 60 TV and media superstars in for questioning for promoting a range of health cares products that were using false Food and Drug Administration license and selling substandard products to the public. The ‘Magic Skin’ range included a face serum from Switzerland which turned out to be processed soybean made in Thailand and a magic milk weight loss product that turned to simply be baby powder. Police said that they received complaints about the face care products including users who had developed rashes and pimples for its use.
