In today’s blog post we are taking a closer look to IP protection in Thai food and beverage industry, which is growing fast and attracting more and more European SMEs. You’ll learn more about brand protection in Thailand and how to protect your unique product packaging. The article will also discuss trade secrets and geographical indications.
Thailand’s rapidly growing food & beverage industry is one of the biggest contributors to nation’s economy, contributing about 23% of the country’s GDP. Known as the ‘food basket of Asia’, Thailand is one of the Asia’s largest producers and exporters of food, with food exports amounting to 23.5 billion EUR in 2015. Given Thai government’s commitment to positioning the country as a global food innovation hub, Thailand’s F&B industry has recently become very attractive for European SMEs.
Propelled by increasing dispensable income, Thailand’s domestic food and beverages market looks promising for the European SMEs. The country’s rapidly growing urban middle class constitutes a consumer base that is increasingly health-conscious, pays attention to the nutrition value of the food, but at the same time is increasingly eager to purchase processed and packaged foods and, especially the urban youth, is willing to try out new flavors and exotic F&B products. The busy lifestyle of urban youth is favoring ready-to-eat meals, snack foods and convenience products.
As the spending power of the upper-middle class is increasing, there is also greater demand for imported premium products, which offers many business opportunities for the European SMEs.
At the same time, together with rapid economic growth, counterfeiting in food products has also increased dramatically in recent years. Thus, the EU SMEs should take steps to ensure that their IP rights are protected, when selling their food products to Thailand, especially as neglecting to register IP rights in Thailand could easily end SMEs’ business endeavor in the country.
Trade mark protection is a must in the F&B industry
Increasing brand consciousness, concerns about food safety and the relatively high number of counterfeiting in the country mean that brand reputation is especially important for this industry sector. A trustworthy brand can be critical to the success of F&B products as company’s trade mark functions as a badge of quality in Thailand.
A trade mark may be composed of a photograph, drawing, device, brand, name, word, text, letter, numeral, signature, combination of colors, figure or shape of an object, sound, or any combination thereof. Additionally, three-dimensional signs can also be registered as trade marks.
SMEs should keep in mind that Thailand adopts the ‘first-to-file’ system, meaning that the first person to register a trade mark owns that mark. It is particularly important for the SMEs to register trade mark in Thailand as soon as possible because trademark piracy due to ‘bad faith’ registration is a serious problem. ‘Bad faith’ registration means that a third party, not owning the trade mark, registers European SME’s trade mark, thereby preventing the legitimate owner from registering it. These unscrupulous companies would normally try to resell the trade mark to its owner at an inflated price.
Trade marks are registered at the Department of Intellectual Property of the Ministry of Commerce and registration costs between EUR 50 and EUR 420 for one class, depending on how many items of goods and services are registered and if an agent is required to handle the filings. SMEs should bear in mind that they need to be represented by an agent when registering trade mark in Thailand. SMEs should also be aware that trade mark application form and other required documents must be submitted in the Thai language or accompanied by a Thai translation.
Geographical Indications (GIs) protect your quality products
In the food & beverages industry, it is also important to protect GIs as these are also valuable for branding goods in Thailand, especially as GIs can increase trust towards certain brands, since they identify the country, region, or area from which goods originate and to which a given reputation is assigned. Examples include Bordeaux wine, Parmigiano-Reggiano cheese and Parma ham.
GIs are recognised and can be registered in Thailand since 2004. In fact, Thailand is one of the pioneers of GIs protection in Asia, with several GIs already registered nationally and abroad. Additionally, as Thai consumers pay attention to the quality and origin of F&B products, GIs protection in the country can be quite beneficial.
To register a GI, the registrant must belong to a collective organisation representing a group of producers in the area that produces the goods they want to register. The European SMEs should thus ask their GI organisations to register the GIs in Thailand.
Appearance matters in Thailand: protect your packages with design patents
Creative packaging style is another key element for the success of the brand in Thailand as Thai consumers pay attention to the appearance of products and this is a relevant aspect to take into consideration in the food and beverage industry sector. It is, therefore, important to protect the design aspects of products to prevent counterfeiting and replication. Besides using trade marks, SMEs can protect their packages with design patents.
In Thailand, design patents cover products with a distinctive shape, pattern, colour or the combination of these. The design must also be ‘novel’, which means neither widely known or used by others in Thailand or in a foreign country before the filing of the application for a design patent, nor mentioned in a document or a printed publication in Thailand or a foreign country before the filing of the application for a design patent.
Design patent protection in Thailand lasts for 10 years and the application procedure usually takes about three years. Similarly to trade marks, design patents also function under the ‘first-to-file’ system and thus early registration is recommended.
Don’t forget, some things are best kept as a trade secret
A trade secret is a non-public information that is financially valuable and is guarded with confidentiality measures. In the F&B industry, trade secrets may refer to ingredients or processing methods that are critical to the taste, texture, appearance and smell of a product. A famous example is the Coca Cola formula.
Trade secrets do not require registration and are protected under Thai IP laws as long as appropriate measures are taken to protect the confidentiality of the information. Trade secrets can be protected by series of confidentiality clauses, physical barriers, and Non-Disclosure Agreements (NDAs). NDAs allow European SMEs to take legal action in case of disclosure of the information and stop further disclosure of trade secrets. Companies should include confidentiality clauses within employee contracts covering not only the duration of employment, but if possible, even after the employee has left.
South-East Asia IPR SME Helpdesk
The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (email@example.com) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.
The South-East Asia IPR SME Helpdesk is co-funded by the European Union.
To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.
 Thailand Investment Review: http://www.boi.go.th/upload/content/TIR_JULY_82855.pdf