VZCZCXRO4490
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHBK #1050/01 0530642
ZNR UUUUU ZZH
P 220642Z FEB 06
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 6549
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1590
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 04 BANGKOK 001050 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS TO USTR JCHOE-GROVES 
COMMERCE PASS USPTO FOR JURBAN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR TH
SUBJECT: SPECIAL 301 REVIEW -- THAILAND 
 
REF: SECSTATE 14937 
 
¶1.  (SBU) Summary and Recommendation:  Piracy rates of 
intellectual property in Thailand remain high and few 
dramatic steps were taken during 2005 that would predict 
significant reductions in those rates in the near future. 
Nevertheless, legislative developments and enforcement 
actions for the year have been predominantly positive.  The 
RTG continues to tighten its IP legal framework, including 
enactment of the Optical Disc Law and progress on amending 
the Copyright Law.  Rights holders have seen better 
cooperation with enforcement officials, particularly with 
Thai Customs, and have seen the emergence of a more powerful 
partner in the Department of Special Investigations that 
holds promise for more and larger seizures of infringed goods 
in 2006.  Thailand has settled in to what portends to be a 
long-term struggle against infringement.  Though decisive 
victory over piracy seems unlikely anytime soon, we are 
generally satisfied with the steps being taken on the road to 
pursue that victory.  The Embassy recommends that Thailand 
remain on the Watch List.  End Summary and Recommendation. 
 
¶2.  (SBU) IPR enforcement in Thailand proceeded apace in 
2005, without dramatic campaigns to clean up the streets of 
bootleg merchandise once and for all, but rather with a 
steady stream of raids and arrests.  The Department of 
Intellectual Property (DIP) released statistics for 2005 
showing seizures of 2,261,567 infringing products and 7,689 
arrests.  Rights holders agreed that the number of overall 
raids on infringers was up for the year and seizures of 
contraband merchandise were higher than in 2004, but the 
total amount of merchandise for sale on the streets of 
Thailand does not appear to have diminished. 
 
¶3.  (SBU) Individual rights holders have seen progress on 
reduction of piracy rates on specific products in concert 
with active enforcement programs.  One apparel manufacturer 
has seen counterfeiting of its product drop 95 percent over 
the last ten years thanks to ongoing investigations into 
counterfeit manufacturers and frequent raids of 
establishments selling contraband copies of its product. 
Counterfeit sellers have learned it does not pay to 
counterfeit that particular brand, but that has meant simply 
that they have moved on to counterfeit other brands where the 
rights holders are less active. 
 
Police and Customs 
------------------ 
 
¶4.  (SBU) Rights holders cite improved cooperation from local 
police in taking down establishments retailing counterfeit 
product.  Although the rights holders are generally expected 
to do their own investigations and provide the evidence 
necessary to obtain a warrant, police are enthusiastic about 
participating in raids, not least because the rights holders 
provide bonuses for successful raids.  However, a common 
complaint is that police fail to follow up on evidence 
gathered during a raid to pursue the bigger fish, the 
manufacturers and larger distributors of the counterfeit 
product.  Most often, police on a raid will seize product at 
the site and bring the 17-year-old girl minding the shop down 
to the station for booking.  Content with a successful raid, 
and unable (or unwilling) to directly finger the store owner, 
the police store the seizure for later destruction and file 
the case away.  There have been cases of police units taking 
ex officio action and seizing counterfeits on their own 
volition, but rights holders say the actions are not 
necessarily cost-effective as police expect rewards for 
making the seizure. 
 
¶5.  (SBU) The Department of Special Investigations (DSI), a 
disappointment in its formative years as far as IPR 
enforcement, played a more important role in 2005.  DSI, 
formed as an equivalent to the FBI with enforcement and 
investigative power to crack down on large-scale crime, 
including intellectual property crime, initiated three 
substantial trademark cases and two copyright cases, seizing 
a total of 189,674 infringing goods for the year.  More 
importantly, minimum thresholds for cases that had hamstrung 
DSI in the past were lifted as of the beginning of 2006. 
Previously DSI was restricted to investigating only cases 
where the value of merchandise was over five million Baht 
(USD 125,000), based on the value of counterfeit merchandise. 
 The threshold has now been lowered to 500,000 Baht (USD 
12,500) and is now based on the value of the legitimate 
product, enabling DSI to pursue larger numbers of cases. 
DSI,s resources and reputation for being less corrupt than 
 
BANGKOK 00001050  002 OF 004 
 
 
the regular police force give some hope for more effective 
enforcement in 2006. 
 
¶6.  (SBU) The Customs Department was a particularly bright 
light, showing dramatic improvement and sustained activity in 
IPR enforcement.  Customs was responsible for numerous large 
seizures and were credited with seizure of 765,438 infringing 
goods for the year.  Rights holders lauded Customs, 
willingness to undertake ex officio investigations, not only 
stopping almost 200 pirate shipments in 2005, but also saving 
rights holders the time and expense of doing investigations 
expected by other enforcement arms.  Customs officials have 
also shown enthusiasm for participating in enforcement 
seminars and liaising with customs officials in other 
countries to crack down on shipments of bootleg merchandise. 
However, it is notable that nearly all seized shipments are 
incoming; Customs officials have placed substantially less 
importance on inspecting outgoing shipments for infringing 
goods. 
 
IP Court talent being wasted 
--------------------------- 
 
¶7.  (SBU) Thailand,s Intellectual Property Court gets high 
marks for its professionalism and interest in trying IP 
cases.  The court processes a large number of cases annually 
in a reasonable time frame and with judgments on cases that 
the legal community considers to be fair.  The thirty judges 
on the court have shown great willingness to participate in 
IP seminars and are genuinely interested in intellectual 
property issues and the range of disputes involved.  However, 
resident IP lawyers in Thailand have noticed that the steady 
stream of routine low-level cases brought to court through 
police raids on small shops selling bootleg DVDs or blue 
jeans is taking its toll on judges who are becoming 
increasingly bored and disillusioned.  The IP Court handled 
approximately 13,000 cases in 2005, nearly all of which were 
small-time offenders who plead guilty and accepted a 
relatively small fine as punishment.  The low level of 
penalties exasperates rights holders who see infringers 
accepting the fines as simply a cost of doing business, but 
judges are unwilling to impose harsh punishments on 
defendants who most everyone agrees are the small fry in the 
world of counterfeiting.  Some judges have begun handing down 
sentences requiring only community service (sweeping local 
temples, etc.), and others are advocating decriminalizing 
low-level IP crime in order to clear their dockets of 
small-time cases. 
 
¶8.  (SBU) The IP Court has been stricter of late on issuance 
of search warrants out of dissatisfaction with some rights 
holders who they feel have been abusing the court,s 
authority.  Numerous rights holders (mostly local) have been 
accused of brandishing warrants to sellers of pirated goods, 
threatening them with arrest if they do not make &royalty8 
payments.  Although the rights holders see this as just 
another revenue stream that would be otherwise lost to them, 
the Court views it as a form of extortion.  As a result, 
rights holders in general are finding it more difficult to 
acquire warrants, some of which are valid for only a few 
hours. 
 
Legislation 
----------- 
 
¶9.  (SBU) Thailand,s long-awaited Optical Disc Law went into 
effect on August 29, 2005.  Though too early to have any real 
effect on enforcement, the Department of Intellectual 
Property (DIP) said the law has helped them to develop more 
information on the operations of the 38 optical disc 
manufacturing plants they monitor.  DIP is preparing to 
collect exemplar discs from each manufacturing line to better 
track the source of bootleg OD,s using new OD forensics 
technology being acquired with Embassy assistance and 
financing.  One criticism of the Optical Disc law was that 
while it required copyright codes, there was no specific 
requirement to use industry standard SID codes, and DIP 
developed their own code system.  However, DIP says that 
plants are eligible to use SID codes if they choose and 
fifteen OD plants, which account for the majority of OD 
production in Thailand, have opted to do so. 
 
¶10.  (SBU) DIP is reviewing intellectual property laws as 
part of a general overview of all laws by the Thai 
government.  Amendments to the Copyright Law that have been 
circulating for some time are now with the Cabinet for 
approval and DIP expects parliamentary approval sometime in 
 
BANGKOK 00001050  003 OF 004 
 
 
¶2006.  Next on DIP,s agenda for review are amendments to the 
Patent and Trademark Law.  DIP has sought comments for 
suggested improvements to the law, particularly on measures 
that may need to be brought into compliance with WTO rules. 
The Trade Secrets Act is on tap for review for 2007, though 
implementing regulations for the original Act still have yet 
to be implemented.  The regulations now sit with the Minister 
of Public Health, but it is expected that action on the draft 
regulations will not take place until after Thailand 
completes FTA negotiations with the U.S.  DIP has also taken 
steps toward eventual membership for Thailand in the Patent 
Cooperation Treaty, the Paris Convention, and organized a 
committee to examine possible membership in the Madrid 
Protocol on trademark protection. 
 
Internet 
-------- 
 
¶11.  (SBU) The increasing availability of the Internet in 
Thailand is fueling a nascent but looming demand for illegal 
downloading of music and movies.  Although the penetration 
rate of the Internet is still low compared to developed 
countries, analysts predict ten percent annual growth in 
Internet users, and 60-90 percent annual growth in data rates 
and bandwidth.  Rights holders estimate 80 to 100 sites offer 
free downloads of infringed music in Thailand.  Although 
Internet service providers have been cooperative in taking 
down sites upon request, many of the same sites pop up 
quickly thereafter on other servers.  Enforcement for 
Internet crime falls to the cybercrime unit of the Economic 
Crimes Investigation Division of the police, but the unit has 
limited manpower and broad responsibility for numerous other 
types of Internet fraud.  Although bandwidth is not broad 
enough to permit rapid downloading of large movie files, the 
increasing availability of broadband in Thailand makes it 
more likely that illegal movie downloads will be a greater 
problem in the future. 
 
Training and Public Awareness 
----------------------------- 
 
¶12.  (SBU) Embassy Bangkok is currently administering a 
$265,000 grant to improve IPR enforcement measures for the 
Thai Customs Department.  The two initial phases are complete 
and U.S. Customs and Border Protection is in the process of 
developing materials for the next phase, a conference on 
&training the trainers8 to improve enforcement at all ports 
of entry in Thailand.  The Embassy is also finalizing 
preparations for purchase of an optical disc forensics 
machine for the Thai police forensics lab which will enable 
the police to accurately trace the origin of a counterfeit CD 
or DVD to the manufacturing line and plant.  IFPI developed 
the technology and has already financed training for several 
Thai police officials in London in the use of the machine. 
Once the machine is acquired, DIP is prepared to procure 
exemplar discs from each optical disc plant in the country to 
serve as a resource for police to track infringing discs to 
their source. 
 
¶13.  (SBU) DIP has been working with rights holders on public 
awareness campaigns on infringement, aimed particularly at 
teenagers.  DIP developed a &No Buying, No Selling, No 
Using8 campaign against IPR infringement and have organized 
public relations campaigns at a number of local shopping 
areas and in the provinces.  Anti-piracy trailers are 
regularly shown in cinemas.  DIP worked with the Business 
Software Alliance and Microsoft on software asset management 
and held seminars on end user piracy of software. 
 
Comment 
------- 
 
¶14.  (SBU) Members of the intellectual property community in 
Thailand generally agree that, with some notable exceptions, 
the legislative framework for effective IP enforcement is in 
place.  There exist few if any quick fixes that would 
dramatically improve enforcement in a short span of time and 
significantly improve piracy rates.  We are now engaged in a 
long, twilight struggle against infringement which holds no 
promise for quick or easy victory, nor any guarantee that 
victory, however it may be defined, will ever be reached. 
Progress, if it is to be made, will come through steady and 
determined action, slugging it out daily with the 
manufacturers, distributors, retailers and importers of 
counterfeit goods. 
 
¶15.  (SBU) Incremental improvements in legislation and 
 
BANGKOK 00001050  004 OF 004 
 
 
enforcement measures were made in 2005 and we expect similar 
incremental improvements in 2006.  Although piracy levels 
remain unacceptably high and commitment to effective 
enforcement still lower than what anyone would prefer, we 
continue to see progress across the board in improved 
legislation, better enforcement cooperation and higher 
awareness among the public and the RTG of the importance of 
IPR.  There has been little deterioration in any of these 
areas and for these reasons we see no reason to downgrade 
Thailand,s position on the Watch List. 
BOYCE