Effectively branding products and services is becoming increasingly important in todays ultra competitive marketplace. This situation makes protecting the companys trademarks, which are the visual symbols of the brand, essential.

The purpose of this chapter is to explain:

1. the general objectives of trademark law; and
2. the benefits associated with registering trademarks in Thailand.

Objectives of Trademark Law

The objectives of trademark law include:

1. assisting consumers in determining the origin of goods being sold;
2. protecting consumers from confusion resulting from the use of identical or similar marks; and
3. protecting trademark owners from counterfeiting and other forms of unfair competition.

Benefits of Registration

There are many benefits to registering trademarks. The first four discussed below are associated with protecting trademarks against would be infringing third parties in Thailand. The last two focus on how to enhance the value of a business by registering its trademarks.

1. Preventing Trademark Squatting

Trademark squatting occurs when a party who does not rightfully own a trademark registers the mark anyway in a country where the true owner has yet to register the mark.

In Thailand, this can pose a big problem for the true owner beacause challenging the imposters claim to the mark can be extremely difficult.

If the true owner then decides to challenge the squatters ownership of the mark he may submit a petition to cancel the imposters mark registration at the Intellectual Property Court in Bangkok.

Note that the petition must be submitted within five years of the date that the previous registration of the mark in Thailand was approved, and the evidentiary standard required of the true owner in order to cancel the imposters mark registration is quite high.

The owner's only other alternative would be to negotiate with the imposter for the imposter to transfer ownership of the Thailand registration certificate for the mark to the true owner.

Owners of new marks used in Thailand should always try to register those marks in Thailand as early as possible in order to prevent this situation.

2. Imposing Penalties

Although enforcement in Thailand has improved dramatically in recent years, trademark infringement still occurs. It is vital that trademark owners take the steps necessary to place themselves in a good position to enforce their trademark rights if it becomes necessary.

The first and most important step that a trademark owner can take to place themself in position to enforce their rights in Thailand is to register the trademark with the Department of Intellectual Property (DIP).

Registering the trademark with the DIP gives the owner much more power to enforce their rights against would be infringers than they would have if the mark was only registered outside of Thailand. There are many reasons for this, but the most important of these is the increased penalties applicable to infringing third parties if the mark is registered with the DIP. Below are the maximum penalties applicable to parties who either produce a counterfeit mark or import or sell goods bearing a counterfeit mark.

Even though terms of imprisonment are technically applicable to trademark infringers under Thai law, in actual practice Thai courts have been generally reluctant to imprison infringers in these situations.

3. Claiming Priority

Under Thai law, if a trademark application is filed in one country and then is subsequently filed in Thailand within six months of the initial filing of the trademark, the owner shall receive protection in Thailand as of the date of the initial filing (as long as the country of first filing grants similar rights to Thailand parties).

4. Providing Evidence of Ownership

Trademark registration in one country can be used as evidence of ownership of the mark in other countries when disputes arise.

5. Enhancing Share Value

The amount of goodwill a company accumulates with the purchasing public can greatly enhance the value of that company's shares.

Goodwill is an intangible asset that denotes the confidence and good feelings the market associates with a business' products and/or services. Many times the consuming public associates the goodwill created in the market with the companys trademarks rather than the name of the company. This creates a situation where the companys registered trademarks can be very important and valuable assets.

NIX Ltd. is later approached by a US clothing company to enter into negotiations for the US company to purchase a controlling stake in NIX Ltd. from existing NIX Ltd. shareholders. During the negotiations, the US company sends valuation experts to determine the value of NIX Ltd.'s assets including the goodwill associated with the Cherry line, which would arguably be the company's most valuable asset.

Determining the value of a trademark is a fairly subjective exercise.  Because the company has already registered Cherry in the countries where the clothing line is sold, NIX Ltd. has clearly defined legal rights to the mark. This fact places NIX Ltd. in a much stronger position to negotiate a higher value of the goodwill associated with the mark, allowing the NIX shareholders to maximize the acquisition opportunity. If NIX had not registered the mark the company would not have such specific rights to the mark, and it would almost certainly be in a weaker position to negotiate the value of the goodwill associated with the mark as an asset.

6. Trademark Licensing

As mentioned above, registering the mark gives the owner clearly defined legal rights. This certainty of ownership is important when licensing the use of the trademark to third parties.

In trademark licensing agreements one party (referred to as the licensee) acquires particular rights to use a trademark from another party, who owns or otherwise has rights to the trademark (referred to as the licensor).

In these situations it is not legally required, but it is generally advisable, that the mark which is to be licensed first be registered in all countries where it will be used.

In order to maximize the opportunity to license the use of the trademark Razorbacks the owner should first register the mark in Thailand under appropriate classes.

By registering the mark, the owner will be able to show prospective licensees that he has clearly defined rights regarding the mark. If he does not register the mark his rights will be less clearly defined, thereby potentially making it more difficult for him to market the mark to prospective licensees.

Another situation where registering the trademark to be licensed is important occurs when a trademark owner outside Thailand wishes to license the use of a trademark to a Thailand party.

In this situation if the trademark owner has registered the mark in Thailand he may authorize the licensor to pursue claims against infringers on the mark in Thailand on the owner's behalf.

A competing retail store then opens in Thailand called Zipps, and the Thailand company takes the position that the name infringes on the mark Zippers.

In this situation because 1) the mark has been registered in Thailand and 2) the licensing agreement has been registered with the DIP, the Thailand company would have the authority to pursue claims against infringers in Thailand on behalf of the UK owner.

If not, the local licensee would not have no rights and the UK company would instead have to pursue the claim itself.

Note that the licensee must first register the licensing agreement granting licensee the rights to use and protect the mark with the DIP before the licensee in Thailand can pursue a claim in Thailand against a third party on behalf of the owner. This registration can normally be accomplished within a day.