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12月 7, 2020

Canceling a Thai Trademark Registered in Bad Faith

Informed Counsel

It is not unusual for brand owners to take a closer look at the Thai market for their products only to find that a third party has already applied for registration of their trademark. Brand owners who face this situation usually become aware of it when they consider entering the Thai market after their brand has already become famous and successful elsewhere. Well-known marks are often usurped when a bad-faith applicant intentionally registers a trademark to benefit from the goodwill and reputation associated with that trademark. As Thailand is a first-to-file system for trademark registration, supplying proof of intention to use is not a requirement for registration. Thus, if a legitimate brand owner has never registered their trademark in Thailand, a bad-faith applicant might take advantage of this opening to file another person’s trademark in his or her own name.

Overlooking the early securing of trademark rights in Thailand can lead to complex problems, even when brand owners have a relationship with a distributor in Thailand. The problem usually comes to light when a brand owner seeks to end their relationship with one distributor and start a business relationship with a new partner. In some cases, brand owners are blindsided when they learn that the previous distributor had surreptitiously filed for registration of the trademark in the distributor’s own name without alerting them—meaning that the former distributor now holds exclusive rights over the use of the trademark in Thailand.

After finding out about a bad-faith trademark registration, many brand owners seek to cancel the Thai registration of the trademark to which they have better rights than the registrant. The Trademark Act provides several mechanisms that brand owners can rely on to pursue cancellation of trademark’s registration; however, none of the law’s provisions clearly state the possibility of canceling a trademark registered in bad faith. Below, we explore two possible  methods for cancellation of a bad-faith registration, depending on which authority considers the matter.

Cancellation with Board of Trademarks

A cancellation petition may be filed with the Board of Trademarks through one of two routes—one for “interested parties” (that is, affected parties, such as a legitimate brand owner) and one for anyone. While neither route is based on legal provisions clearly stating how to cancel a registration based on a bad-faith argument, they are viable possibilities for those seeking cancellation, with different criteria and requirements pertaining to each route.

If an interested party files a cancellation petition with the Board of Trademarks to challenge the mark’s general registrability, the board will re-examine the distinctiveness, similarity, and legality grounds under section 61 of the Trademark Act. As a legitimate brand owner usually qualifies as an interested party, that owner can file a petition to cancel the mark on grounds that it is identical or confusingly similar to the legitimate owner’s trademark, which was already registered outside of Thailand, and should therefore not have been filed.

A person not claiming interested-party status who wishes to file a cancellation petition must be of the opinion that the registered trademark is contrary to public order, morality, or public policy (Trademark Act, Section 62). As a bad-faith filing may be interpreted as contrary to these things, it should qualify for cancellation.

However, proving the bad faith of the registrant to the Board of Trademarks can be difficult, since there are no witness hearings. The Board of Trademarks considers only documentary evidence, which usually does not clearly reveal the registrant’s intention, whether the registrant possessed knowledge of the original brand, or whether they intentionally copied the original brand to be registered as their own.

Cancellation with the IP&IT Court

Better right grounds—that is, assertions that the genuine brand owner has a more legitimate right to use their own trademark than the registrant in Thailand does—are typically the most relevant legal grounds for cancellation of a trademark registered in bad faith. Section 67 of the Trademark Act provides that a legitimate owner may file a lawsuit for cancellation of a bad-faith trademark registration on better right grounds in the Central Intellectual Property and International Trade Court (IP&IT Court), provided that it has been registered for less than five years.

If a trademark has been registered for more than five years, it cannot be cancelled. This has already been challenged in court, with at least one brand owner arguing that the five-year limitation should only apply if the trademark in question was filed in good faith, and that brand owners should be able to cancel trademarks registered in bad faith even after the five-year period has expired. However, the Supreme Court rejected the argument and ruled that, as the five-year time period had expired, the trademark registration in that case could not be cancelled despite the brand owner having a better right to it.

Proving the bad faith of the registrant can be easier and have higher chances of success in the IP&IT Court, so most legitimate brand owners opt to do this rather than file a cancellation against a bad-faith registration through the Board of Trademarks. Again, however, if the trademark registration has been active for longer than five years, the IP&IT Court will reject the request.

Canceling Long-Standing Bad-Faith Registrations

Despite this conservative approach, it can still be possible for a legitimate trademark owner to cancel a bad-faith registration that has been active longer than five years, especially when there is a precedent judgment ruling  that the trademark was filed in bad faith. In this case, the cancellation petition—along with evidence of the prior ruling—should be filed with the Board of Trademarks, which would consider the evidence and may cancel the trademark.

Tilleke & Gibbins has had a great deal of success with this approach, including in a recent case on behalf of a leading fertilizer company, which had filed a cancellation petition with the Board of Trademarks. Since there was a precedent judgment ruling that the disputed trademark was filed in bad faith, the Board of Trademarks ordered the cancellation of the trademark. The owner of the cancelled trademark then appealed the decision to the IP&IT Court, which agreed that the trademark was filed in bad faith, dismissed the case, and confirmed that the Board of Trademarks had correctly ordered the cancellation. The case was further appealed to the Specialized Appeal Court, which affirmed the IP&IT Court’s judgment, reasoning that the Board of Trademarks remains empowered to cancel a registered trademark under Sections 61 and 62 of the Thai Trademark Act, even if the bad-faith trademark has been in force for more than five years.

Selecting a Strategy

In summary, the legitimate owner of a trademark has a number of options for seeking cancellation of a trademark registered in bad faith. For marks that have been registered for less than five years, brand owners can file a petition with either the Board of Trademarks or the IP&IT Court. If a bad-faith trademark registration has been active for longer than five years, brand owners may still be able to file a cancellation petition with the Board of Trademarks. Withthese options, brand owners should be in a favorable position if they find that their intellectual property has been infringed upon by a bad-faith trademark registration in Thailand. At that point, it will be important to assess the circumstances of the case and develop a comprehensive legal strategy accordingly to regain full exclusive rights over the trademark.

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