Thailand has become an important contributor to the world trade-production network over the last two decades, and is now considered a key supplier of intermediate and finished goods to the global market. This is not least the case in the electronics and automotive industries, which have seen robust growth driven not only by outside demand, but from within Thailand too. Based on current trends, these industries are likely to become the principle growth drivers in Thailand.
The opportunities for foreign direct investment and associated technology transfers in these Thai sectors are therefore considerable. However, the value of the imported expertise and technology means that there are substantial risks to foreign businesses in the form intellectual property (IP) theft. Intellectual property rights (IPR) are still evolving in Thailand and in practice not all types of IP are granted the protection and provisions for enforcement that are generally expected in Europe.
Of particular relevance to the electronics and automotive industries for foreign investors are invention patents and petty patents (otherwise known as utility models). These are commonly associated with manufacturing technology improvements, although other forms of IP, such as trade marks and copyright can be also very important, especially since there is often overlap in the protection granted to a specific innovation. For instance, a company’s production technology can be protected as a design by both a copyright and a patent, and when applied might even make use of information that is considered a trade secret.
Patents in Thailand
Thailand is a member of the Paris convention and the Patent Cooperation Treaty (PCT), which means that applicants for invention patents, petty patents and design patents are entitled to a ‘right of priority’: an applicant can use the same filing date as the original home country application, if the original filing has been made within 12 months (6 months for design patents) in any other country belonging to the Convention.
While applications for design patents and petty patents are still largely dominated by domestic applicants, applications for invention patents are mostly filed by foreign applicants. Since 2011, the trend amongst foreign applicants has been to file fewer direct national applications. Instead, there has been a sharp increase in applications via the PCT route. Consequently, the backlog of patent applications has grown to a level of some concern for applicants – among the 23,000 pending applications made in 2012, less than a quarter were granted. It is therefore recommended that European businesses apply via the direct national application system rather than the PCT route where possible, as this is likely to reduce application waiting times.
While in most cases it is better to make a direct national filing to gain a quicker result, in Thailand the examination of foreign patent application depends on the outcome of any patent application already filed abroad at other Patent Offices. Thus, filing an application for a Petty Patent in place of an invention patent might be considered as an alternative – if the invention is eligible, and if 10-year protection is sufficient.
Another final, yet crucial point to remember is that Thailand operates under a ‘first-to-file’ system, meaning that the first person to file an application for any IP type will own that right once the application is granted – subject to the provisions of the Paris Convention – despite the fact someone else may have created and used the innovation first.
Whatever the efforts of the authorities to improve the implementation and enforcement of IPR in Thailand, timely application by European businesses for grant and registration of their IP rights before the Thai Department of Intellectual Property (DIP) is still crucial in order for companies to have a chance of defending and enforcing them. Thus the key to a successful IP strategy is to be proactive in protection and have all necessary provisions in place before starting new operations in Thailand.
Read more about IP in Thailand in our country factsheet.