October 24, 2012

Thai Company Faces Penalties Under U.S. Unfair Competition Law

Bangkok Post

A Thai exporter has been fined due to its use of illegal software in the production of goods for the U.S. market, according to reports in both the Bangkok Post and The Nation. Narong Seafood, a family-owned Thai seafood producer, reached a USD 10,000 settlement last week with the Attorney-General of Massachusetts to resolve allegations that the company used unlicensed software in connection with producing and processing its goods entering Massachusetts.

Massachusetts took action against Narong Seafood under the state’s Unfair Competition Act, which bans imports of goods produced with illegal information technology (IT). Massachusetts is just one of several states that have recently introduced these tough provisions, which apply to any goods marketed or sold in these jurisdictions, even if they are manufactured abroad.

According to Wiramrudee Mokkhavesa, attorney-at-law in the Tilleke & Gibbins intellectual property group, “the fact that the Massachusetts AG has taken direct enforcement action against a company across the globe in Thailand highlights the need for Thai companies to license their IT.” She also noted that the settlement was a smart business decision that other manufacturers and suppliers in Thailand need to make to avoid disruption to their business in the U.S. market.

Essentially, these unfair competition laws are intended to penalize foreign companies that enjoy an unfair cost advantage over American businesses by using unlicensed software. The penalties include fines and a ban from exporting to the U.S. market.

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