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May 23, 2016

Thailand: Record Damages Awarded in Trademark Case

Managing Intellectual Property

“Born in Canada, Living in London, Made in Italy” is the brand motto of Dsquared2, the famous international fashion brand originally created by Dean and Dan Caten, twin brothers from Canada who have used the series of trademarks D2, DSQUARED, D2 DSQUARED2, and DSQUARED2 since 1994.

The trademarks were filed in many countries under the name Belmont Brands Ltd., and they were subsequently assigned to DSquared2 TM S.A. In Thailand, however, DSquared2 discovered that its trademarks had already been registered by a Thai company that is also in the fashion industry.

Not only were the trademarks already registered under the name of the local Thai company and its directors, but the Thai company had also opened shops in several major shopping malls in Bangkok under the infringing name, DSQUARED2.

In order to reclaim their rights to their brand, Belmont Brands Ltd., the plaintiff, and DSquared2 TM S.A., the coplaintiff and assignee of the trademarks from the plaintiff, brought a civil litigation case against the Thai company and its two directors. The case was filed at the Intellectual Property and International Trade Court (IP&IT Court) in April 2010.

The plaintiff requested the court to order the cancellation of all trademark applications and registrations of the first defendant that are similar to the plaintiff’s series of trademarks, namely D2, D2 DSQUARED, DSQUARED2, and DSQUARED. The plaintiff also requested the court to order the defendants to cease all use of the trade name DSQUARED2 as the name of their stores and jointly pay the compensation to the plaintiff.

In February 2011, the IP&IT Court pronounced its judgment naming the plaintiff as the original owner of the trademark DSQUARED2, reasoning that the plaintiff had a better right than the defendants to the disputed trademarks for the goods in Classes 3, 9, 14, 16, 18, 20, 24, 25, 26, and 35. The defendants were found to have passed off their products as the plaintiff’s for the purpose of confusing or misleading the public into believing that their products belonged to the plaintiff.

The IP&IT Court ordered that the defendants be prohibited from: (1) imitating the plaintiff’s trademarks and products; and (2) using DSQUARED2 as their trade name and the name of their stores. The Court subsequently cancelled the first defendant’s 17 registered trademarks as well as its one pending trademark application. The Court also ordered the defendants to compensate the plaintiff in the amount of THB 100,000 per month, calculated from the date the plaintiff filed the complaint until the defendants withdrew their registered trademarks, or the date the defendants ceased infringing on the plaintiff’s trademarks.

The defendants appealed the IP&IT Court’s decision to the Supreme Court in April 2011. In February 2016, the Supreme Court announced its judgment affirming the IP&IT Court’s judgment and amending only one issue—the defendants must pay compensation to the plaintiff in the amount of THB 100,000 per month from the date the plaintiff filed the complaint until the defendants cease infringing the plaintiff’s trademarks and products and cease using DSQUARED2 as their trade name and the name of their shops. The total compensation accumulated to approximately THB 6-7 million, which is believed to be the highest amount of compensation that defendants have ever been ordered to pay the plaintiff in a trademark litigation case based on “passing off.”

This will serve as a landmark case for international companies looking to operate a business in Thailand that fall victim to their trademarks and trade names being stolen by a local company. This case demonstrates that Thai trademark law provides effective means for original trademark owners to prove their better right over their marks. The amount of compensation granted by the Court is also improving as the Court increasingly recognizes the value of intellectual property and the damage that arises from infringement.

It is significant, however, that it took the legitimate owners of the mark nearly a decade to reach a resolution affirming their better right to the mark. This is an area where the Thai system could benefit from further improvement. In any event, trademark owners are encouraged to seek protection for their trademarks as soon as possible, as it will save them unnecessary stress, time, and costly legal disputes revolving around the legitimate owner of a mark.

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