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3月 31, 2022

Online Sales of Counterfeit Life Sciences Products in Thailand: Rise and Suppression

Since the onset of the COVID-19 pandemic and the ensuing safety measures, many Thai retailers have shifted their sales toward online platforms. Unsurprisingly, counterfeiters have followed suit. The online sale of counterfeit healthcare and other life sciences products (e.g., food, cosmetics, and medical devices) is an area of significant concern, as it is particularly prevalent, damaging, and complex in relation to Thailand’s laws. This article outlines this type of counterfeiting activity in Thailand and explains some important tools brand owners have for fighting it.

Counterfeiting Operations

Although illicit operations seek to avoid being identified by authorities and brand owners, investigations by law enforcement and Tilleke & Gibbins on behalf of clients have yielded some insights into how these illegitimate sellers typically operate.

Often, consumers are first exposed to these counterfeit life sciences products by paid social media advertisements that link to social media accounts set up by sellers impersonating brand owners. This brand impersonation may include unauthorized use of a trademark or trade name as part of the account name, and unauthorized reproduction of official advertisement artwork or product descriptions, taken directly from the official social media account. From the fake social media account, consumers are usually directed to a merchant website that contains consumer reviews, which are entirely fabricated.

While not every counterfeiting operation follows this exact blueprint, employing some variation of these methods lends counterfeiting platforms the ability to proliferate through multiple iterations, as well as believability in the eyes of consumers.

How Brand Owners Can Take Action

Life sciences brand owners often discover that their products have been targeted by counterfeiters when a counterfeit item injures or negatively impacts a consumer. Thinking that the product is genuine, the consumer may then complain to the brand owner, or worse, file a complaint with the authorities. Many times this has resulted in brand owners being surprised by an inquiry from Thailand’s Food and Drug Administration (FDA) or police looking to investigate a case by interrogating the brand owner and other relevant parties.

Once they are aware of the counterfeiting situation, brand owners can fight the counterfeiting operation via a number of legal pathways.

The typical methods that counterfeiting operations employ (as described above) likely violate provisions of many different laws. Furthermore, in most cases, the counterfeit items are produced in or imported into Thailand without marketing approval from the Thai FDA, which is an offense under the FDA laws for different product classes, such as the Food Act, Cosmetics Act, or Medical Device Act. Aside from producing or importing, the marketing of unsafe products amounts to an even more serious offense under these laws, punishable by fines and imprisonment.

Additionally, unauthorized use of a registered trademark is trademark infringement under the Trademark Act, while unauthorized use of an unregistered trademark may violate the Penal Code. Unauthorized reproduction of an advertisement image or a product description may be enforced under the Copyright Act. Thailand’s intellectual property laws are enforced through the Department of Intellectual Property (DIP) and the Economic Crime Suppression Division of the Royal Thai Police.

Furthermore, infringement online may trigger the Computer Crime Act, which can lead to website blocking by court order. Petitions under the Computer Crime Act must be filed with the Ministry of Digital Economy and Society through the review of the IPR Enforcement Affairs Office of the DIP.

Brand owners tend to view the variety of relevant laws and enforcement authorities differently. Some may appreciate the freedom to strategize using the enforcement options the laws provide; others may find those options simply overwhelming. However, experienced advisors in Thailand will be able to help in either scenario—either by executing the selected strategy efficiently and effectively, or by helping brand owners sort through their options and recommending the method with the highest likelihood of success.

Key Takeaways for Brand Owners

First, brand owners can be confident that the Thai authorities take their anticounterfeiting duties seriously. This is shown most clearly by the frequent Thai FDA and police press conferences declaring successful raids and apprehension of suspects. The press conferences are reported almost weekly, with one of the most recent (March 18, 2022) involving THB 70 million worth of allegedly infringing cosmetic products.

Second, cooperation with the authorities is always wise. The authorities expect to be provided with any helpful information that the brand owner can give, including identification of the counterfeit products and further witness statements. Besides helping authorities in their enforcement activities, cooperation is also the best way to establish the brand owner’s non-involvement with the allegedly defective or counterfeit products.

Finally, participating in enforcement, either through cooperation with authorities or through private actions, is encouraged. Although online infringers are elusive, making instant success unlikely, continuous enforcement sends a strong message to the market, contributes to a good reputation among consumers, and raises infringers’ risks and costs (e.g., the risk that the paid ads may be taken down).

With vigilance and persistent action, the fight against counterfeiters of healthcare and life sciences products is a battle of attrition that will prove beneficial in the long run.

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