Intellectual Property (IP) Licensing Laws In Thailand

The word Intellectual Property (IP) signifies the creations of the human mind. For instance, literary and artistic works; inventions; designs; symbols, names and images used in commercial ventures. Even though, Intellectual Property is an extremely powerful tool for economic development and wealth creation, it is not yet being used to its maximum potential in all the countries. Intellectual Property has always played a vital part in over-all social, economic and cultural development worldwide. For many modern-day businesses, developing a strong intellectual property portfolio is considered done of the major objective.

License can be granted to all types of IP assets in Thailand. However, there remains a possibility of unguarded business to fall in number of peculiarities and traps. Hence, this blog will help and provide a comprehension of Thai licensing law as it applies to trademarks, patent and copyright.

Trademark Licensing

Trademark or Service Mark license agreement in Thailand is regulated by the provisions of the Trademark Act 1991 (Sections 68-79), the Ministerial Regulations, and the general laws of contract under the Civil and Commercial Code. Generally, the parties can agree on any terms and conditions they deem fit and agreeable, as long as those terms and conditions are not contrary to law, public order, morals, or government policy.

Under the Thai Trademark Act, 1991, before a license for a registered mark is enforceable, it must be in written form and must be registered with the Trademark Office. If a license agreement allows the licensee to sub-license further, then that subsequent sublicense agreement must also be in written form and registered with the Trademark Office. There is a clear benefit of registration to a licensee or sub-licensee as it can be raised as a defense in the event of a cancellation action for non-use. However, the registration requirement when compared to the international standards, is a very onerous requirement and in some cases, failing to register may mean the license is void.

Upon the submission of application for a license to be registered, the Registrar shall examine the terms to make sure they comply with the law of the land. Following particulars are necessary for a license to be registered which are as follows:

• The terms and conditions of the agreement between the licensor and the licensee should be such that the licensor is able to control the quality of goods manufactured or services rendered by the licensee.
• The goods or services for which the licensed mark is used.
• Whether the licensee will have the exclusive right to use the mark or whether the owner of the mark can grant license to other parties also.
• Other particulars, like, specific term or duration of agreement.

Patent Licensing

Patent license agreements in Thailand are regulated by the Patent Act and the general laws of contract under the Civil and Commercial Code. The agreement must be in writing and shall be submitted to the Patent Office, DIP. Under Section 41 of the Patent Act, 1999, a license agreement of a patent must be in accordance with the procedures, conditions and requirements prescribed by the Ministerial Regulations, and it must be registered with the Patent Office.

According to clause 3(7) of Ministerial Regulation, 1999, it may be considered unfair limitation of competition if a licensee is stopped from exporting the products for sale or for distributing them abroad or is bound to take permission from the patentee before the intended export is made.It is not permissible to restrict the license to Thailand only. Nonetheless, the abovementioned provision will not apply if the patentee already holds the patent in the country of intended export and the patentee’s exclusive sales agent/distributor is appointed in that country before the patent licensing agreement is made with the licensee.

The parties are free to set the tenure of the agreement as well as the terms and conditions under which either party may terminate the contract, subject to the restrictions codified in the Unfair Contract Terms Act and in the sections of Ministerial Regulation, 1999 relating to unfair practices and unfair restraints on competition, as imposed by the Director-General under the Patent Act. A licensor may not require a licensee to pay a royalty for use of the patented invention after the patent term has expired.

Copyright Licensing

Copyright license agreements in Thailand are regulated by the Copyright Act, 1994, the Ministerial Regulations, 1997, and the general laws of contract under the Civil and Commercial Code. Copyright, by default, subsists on creation of an original work, and there is no requirement for registration. Where the copyright owner wants to assign the whole or just a part of his copyrighted work for a limited/unlimited term of the copyright protection, which can range from 25 to 50 years after the death of the author based on the kind of copyright. The assignment of the copyright must be in written format and signed by both the parties. While an assignment is a transfer of ownership, it is not the proprietary right in the work.

The parties are free to determine the tenure of the license, even though the maximum period for a copyright licensing agreement is the date of expiration of the copyright which is usually 50 years after the death of the author, or 50 years after the first publication if the work was published posthumous. According to Article 1 and 2 of the Ministerial Regulations, 1997 issued under the Copyright Act, the licensor has following duty of not to unfairly limit competition, namely:

• It is not compulsory for the licensee to obtain materials wholly or in part from such supplier who are designated by the copyright owner.
• A licensee is not necessarily required to sell or distribute more than half of the copied products to the patentee or its nominee.
• A licensee is not necessarily bound to limit the quantity of production, sales, or distribution concerning the copied products.

Although it is not necessary to register copyright and obtain copyright license agreement in Thailand, the DIP allows copyright owner to record author’s work and relevant information with the Copyright Office of the DIP. This recordation is not a conclusive evidence to exhibit copyright ownership, but it can be placed in front of the court as a piece of evidence in case of copyright infringement.

Author: Parul Malik, Lloyd Law College, Greater Noida an intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at [email protected].