Pro­tect­ing In­tel­lec­tual Prop­erty Rights in Thailand’s Dig­i­tal Econ­omy

Thai-American Business (T-AB) Magazine - - Contents - Writ­ten by: Peter N. Fowler and Julius Bodie

OVER­VIEW

The ad­vent of the global dig­i­tal econ­omy is the re­sult of in­creas­ing tech­no­log­i­cal in­no­va­tion, the evo­lu­tion of dis­tri­bu­tion plat­forms, and the con­tin­u­ing ex­pan­sion and growth of the on­line world. The Gov­ern­ment of Thailand has be­gun to rec­og­nize the im­por­tance of im­ple­ment­ing and pro­tect­ing its dig­i­tal in­fra­struc­ture. In March 2016, Prime Min­is­ter Gen­eral Prayut Chan- o- cha re­marked to a visit­ing del­e­ga­tion from the U. S.- ASEAN Busi­ness Coun­cil that “the Dig­i­tal Econ­omy will be an im­por­tant step in the mod­ern­iza­tion of the Thai econ­omy” and that the leg­is­la­ture is cur­rently “draft­ing the new Dig­i­tal Econ­omy de­vel­op­ment plan for 2016- 2020.” The Prime Min­is­ter went on to rec­og­nize the im­por­tance of the pro­tec­tion of in­tel­lec­tual prop­erty rights as a spur for in­no­va­tion and de­vel­op­ment of dig­i­tal in­dus­try.

Thailand is in­creas­ingly fo­cused on mak­ing progress in this area, ev­i­denced by the draft bills pro­posed by the Min­istry of In­for­ma­tion and Com­mu­ni­ca­tion Tech­nol­ogy to the Na­tional Leg­isla­tive Assem­bly con­cern­ing the dig­i­tal econ­omy, as well as its plans to es­tab­lish a na­tional dig­i­tal in­fra­struc­ture fund and to con­struct na­tional data cen­ters. Thailand is al­ready in the midst of the con­struc­tion of a na­tional broad­band net­work that aims to con­nect the whole coun­try by mid2017. More­over, in an ef­fort to re­boot the tech econ­omy, Thailand re­cently waived in­come and div­i­dend taxes on ven­ture cap­i­tal firms for the next ten years, while the Min­istry of Sci­ence and Tech­nol­ogy si­mul­ta­ne­ously launched a Baht 500 mil­lion fund for Thai star­tups. In ad­di­tion, a draft Dig­i­tal Econ­omy De­vel­op­ment Plan for Econ­omy and So­ci­ety is an ac­tion plan de­signed to es­tab­lish an ef­fi­cient dig­i­tal in­fra­struc­ture na­tion- wide, sup­port­ing and ben­e­fit­ing a va­ri­ety of in­dus­try sec­tors. The Na­tional Leg­isla­tive Assem­bly re­cently ap­proved an ex­pan­sion and re- nam­ing of the Min­istry of In­for­ma­tion and Com­mu­ni­ca­tion Tech­nol­ogy to be the Min­istry of Dig­i­tal Econ­omy and So­ci­ety, which will have the ad­min­is­tra­tive scope to plan, pro­mote, de­velop and im­ple­ment ac­tiv­i­ties re­lated to dig­i­tal so­ci­ety and the econ­omy, in­di­cat­ing a new fo­cus on the dig­i­tal econ­omy by the Thai Gov­ern­ment. This ef­fort fol­lows the ac­tions of other ASEAN Eco­nomic Com­mu­nity ( AEC) mem­bers. For ex­am­ple, In­done­sia in early 2016 an­nounced an e- Com­merce Roadmap, aim­ing to be­come ASEAN’S largest dig­i­tal econ­omy by 2020.

It is crit­i­cal for U. S. stake­hold­ers that this dig­i­tal re­form be based in the pro­tec­tion of in­tel­lec­tual prop­erty rights ( IPR). Thailand’s con­tin­ued place­ment on the an­nual Of­fice of the U. S. Trade Rep­re­sen­ta­tive Spe­cial 301 Re­port Pri­or­ity Watch List re­flects con­cerns with re­spect to IPR pro­tec­tion, en­force­ment, and mar­ket ac­cess for IP- in­ten­sive in­dus­tries. This ar­ti­cle will briefly out­line Thailand’s IP leg­is­la­tion and ex­am­ine how en­force­ment can be up­dated to meet the chal­lenges and trends of the dig­i­tal econ­omy.

IP LEG­ISLA­TIVE TRENDS

Copy­right- in­ten­sive in­dus­tries strug­gle in­ter­na­tion­ally to main­tain ef­fec­tive IPR pro­tec­tion in the dig­i­tal era. In par­tic­u­lar, the tele­vi­sion, film and broad­cast in­dus­try faces a range of chal­lenges to com­bat con­tent in­fringe­ment in a dig­i­tal en­vi­ron­ment. The Mo­tion Pic­ture As­so­ci­a­tion of Amer­ica ( MPAA) es­ti­mates that con­tent piracy amounts to more than USD 20.5 bil­lion an­nu­ally in the United States alone, and satel­lite broad­cast­ers strug­gle with il­le­gal stream­ing in cy­berspace. Piracy web­sites act as a search en­gine for in­fring­ing con­tent and avoid li­a­bil­ity be­cause the links pro­vided are em­bed­ded from se­condary web­sites that host the con­tent on an en­tirely sep­a­rate server. If the ma­te­rial is taken down, a piracy search en­gine can pro­vide a new link to a dif­fer­ent se­condary host site. De­cryp­tion of satel­lite tele­vi­sion broad­cast­ing also re­mains a crit­i­cal is­sue as il­le­gal de­coder boxes are rel­a­tively easy to ob­tain.

The World In­tel­lec­tual Prop­erty Or­ga­ni­za­tion ( WIPO) In­ter­net Treaties of 1996, com­prised of the WIPO Copy­right Treaty and the WIPO Per­form­ers and Phono­grams Treaty, are the global un­der­pin­nings of a dig­i­tal econ­omy and the im­pe­tus for com­pre­hen­sive dig­i­tal IP pro­tec­tion leg­is­la­tion such as the U. S. Dig­i­tal Mil­len­nium Copy­right Act and the EU Elec­tronic Com­merce Di­rec­tive and Copy­right Di­rec­tive. The United States has long en­cour­aged Thailand to up­date its copy­right regime to ad­dress the chal­lenges to dig­i­tal copy­right pro­tec­tion by ac­ced­ing to and im­ple­ment­ing the WIPO In­ter­net Treaties, which would pro­vide a solid le­gal un­der­pin­ning to pro­tect con­tent in the dig­i­tal en­vi­ron­ment. Fur­ther, as more con­tent moves to on­line stream­ing plat­forms, con­tent own­ers and broad­cast­ers have turned to the Na­tional Broad­cast­ing and Telecom­mu­ni­ca­tions Com­mis­sion ( NBTC). Es­tab­lished in 2010 to reg­u­late li­cens­ing pro­tec­tions and the lib­er­al­iza­tion of the satel­lite mar­ket, the NBTC has the author­ity to re­voke li­censes for sta­tions broad­cast­ing pi­rated ca­ble or satel­lite con­tent, but rarely ex­er­cises this power.

In April 2016, the Na­tional Leg­isla­tive Assem­bly passed amend­ments to Thailand’s 1991 Trade­mark Act, which will pro­vide an op­por­tu­nity for Thailand to fi­nally ac­cede to the 1989 Madrid Agree­ment Con­cern­ing the In­ter­na­tional Reg­is­tra­tion of Marks (“Madrid Pro­to­col”) by the end of the year. Ac­ced­ing to the Madrid Pro­to­col is a crit­i­cal step in mod­ern­iz­ing Thai trade­mark prac­tice, par­tic­u­larly as the coun­try con­sid­ers join­ing the Trans- Pa­cific Part­ner­ship Agree­ment, which re­quires ac­ces­sion to ei­ther the Madrid Pro­to­col or the Sin­ga­pore Treaty on the Law of Trade­marks.

While Thailand’s Trade Secrets Act enun­ci­ates the rights of trade se­cret own­ers and pro­tects the com­mer­cial value of such trade secrets in sev­eral ways, the lan­guage con­cern­ing the dig­i­tal ac­cess­ing of trade secrets, such as by the dis­clo­sure or mis­ap­pro­pri­a­tion of trade secrets via unau­tho­rized ac­cess of a com­puter sys­tem, has yet to be im­ple­mented.

Fi­nally, the most press­ing is­sue fac­ing the patent sys­tem in Thailand is the mount­ing back­log of ap­pli­ca­tions re­sult­ing in an ex­tremely long pen­dency for the grant­ing of patents. Such ex­ces­sive back­logs and delays in the ad­min­is­tra­tive ex­am­i­na­tion process stag­nate in­no­va­tion at a time of a rapidly evolv­ing tech mar­ket. In Jan­uary 2016, the Thai Depart­ment of In­tel­lec­tual Prop­erty an­nounced that it will be re­view­ing prospec­tive amend­ments to the Patent Act with the goal of re­duc­ing the lengthy ex­am­i­na­tion process and back­logs, and in May 2016, the Cab­i­net ap­proved giv­ing the Depart­ment ad­di­tional hu­man re­sources to al­low for an in­crease in its ex­am­in­ing and IT sup­port staff.

CY­BER­SE­CU­RITY AND THE IN­TER­NET OF THINGS ( IOT)

Cy­ber­se­cu­rity and the In­ter­net of Things ( IOT) are ma­jor trends in ASEAN and glob- al dig­i­tal economies. Wear­able de­vices, home se­cu­rity sys­tems, en­ter­tain­ment sys­tems, automobiles and even com­mon house­hold ap­pli­ances are trend­ing in an in­ter­ac­tive dig­i­tal di­rec­tion, and it is es­ti­mated that the IOT will add US$ 10- 15 tril­lion to global GDP in the next 20 years.

A mul­ti­tude of dig­i­tal de­vices now cap­ture data us­ing sen­sors, and both con­sumers and busi­nesses can sub­se­quently an­a­lyze and make de­ci­sions based on the data col­lected. In­creased use of ad­vanced sur­veil­lance cam­eras and fa­cial recog­ni­tion soft­ware can be in­cor­po­rated into in­dus­tries rang­ing from com­mer­cial re­tail es­tab­lish­ments to crit­i­cal gov­ern­ment and home­land se­cu­rity in­fra­struc­ture. Ur­ban mar­kets in par­tic­u­lar are evolv­ing into the “Smart City” realm, and the pro­tec­tion of IPR, in par­tic­u­lar tech patents, will be an in­creas­ingly im­por­tant arena for transna­tional in­vestors. Thailand is be­gin­ning to im­ple­ment a reg­u­la­tory frame­work ben­e­fi­cial to such an en­vi­ron­ment, and it will be crit­i­cal for U. S. in­vestors to mon­i­tor progress in the IOT field.

Thailand is the world’s num­ber two tar­get for cy­ber­crime, and in­ter­na­tional busi­nesses are grad­u­ally em­ploy­ing strength­ened IT se­cu­rity mea­sures as well as cy­ber in­sur­ance poli­cies. In 2015, 4% of cy­ber­crime vic­tims in Thailand re­ported losses of be­tween USD 1 mil­lion and USD 100 mil­lion. In­tel­lec­tual prop­erty theft and mis­ap­pro­pri­a­tion are among the risks that busi­nesses face in the con­stantly evolv­ing cy­ber sphere. While big data tech­nol­ogy al­lows for a more com­plex anal­y­sis of the risks that modern com­pa­nies face, IT chal­lenges re­main for busi­nesses to im­ple­ment truly ef­fec­tive se­cu­rity mea­sures. The an­nounced in­ten­tion of at least one of the eight draft bills com­pris­ing Thailand’s Dig­i­tal Econ­omy Plan is to es­tab­lish a Na­tional Cy­ber­se­cu­rity Com­mit­tee, which may be a step in the right di­rec­tion in pro­vid­ing clear lead­er­ship on this is­sue.

CON­CLU­SION

While Thailand has made strides re­cently in pro­mot­ing and de­vel­op­ing a plan for its dig­i­tal econ­omy as a stim­u­lus for both do­mes­tic and for­eign in­vest­ment, and has re­it­er­ated its plans for im­ple­ment­ing a reg­u­la­tory dig­i­tal frame­work con­ducive to eco­nomic growth, in re­gards to IPR pro­tec­tion, ef­fec­tive pro­tec­tion and en­force­ment is an am­bi­tious ob­jec­tive that will re­quire in­creased in­ter­a­gency co­or­di­na­tion to achieve. Civil lit­i­ga­tion is rarely a vi­able or worth­while op­tion, and an over re­liance on crim­i­nal en­force­ment has not proven ef­fec­tive in creat­ing a de­ter­rent en­vi­ron­ment. Hope­fully, re­cent amend­ments to Thai IP and dig­i­tal econ­omy leg­is­la­tion will in­crease the trans­parency, ef­fi­ciency, and ul­ti­mately the pro­tec­tion of cre­ative con­tent and tech­no­log­i­cal in­no­va­tion that U. S. in­vestors seek. The new Min­istry of Dig­i­tal Econ­omy and So­ci­ety will be an in­trigu­ing case study to see how the na­tion con­tin­ues to im­prove, ad­vance, and pre­pare for the wide­spread eco­nomic over­haul that the glob­al­iza­tion of the dig­i­tal era will both pro­pel and re­quire if Thailand wishes to suc­ceed in creat­ing a truly ef­fec­tive dig­i­tal econ­omy.

Peter N. Fowler is the United States Patent and Trade­mark Of­fice Re­gional In­tel­lec­tual Prop­erty At­taché for South­east Asia, and Julius Bodie is a third year law stu­dent at Loy­ola Univer­sity of Los An­ge­les School of Law. Peter can be con­tacted at Peter. Fowler@ trade. gov.

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