VZCZCXRO7846
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #3272/01 3641022
ZNR UUUUU ZZH
O 301022Z DEC 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9432
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUEAWJL/DEPT OF JUSTICE WASHINGTON DC IMMEDIATE
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHCHI/AMCONSUL CHIANG MAI IMMEDIATE 7436

UNCLAS SECTION 01 OF 04 BANGKOK 003272 
 
STATE FOR EAP/MLS, EEB/IPE FOR JURBAN 
STATE PASS TO USTR FOR BWEISEL, BKLEIN, RBAE 
COMMERCE FOR EAP/MAC/OKSA FOR JKELLY, MTORSEN 
COMMERCE PASS TO USPTO 
SINGAPORE FOR FINATT BLEIWEIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:N/A 
TAGS: ECON ETRD KIPR PREL TH
SUBJECT: AMERICAN IPR OWNERS DISCUSS CONCERNS WITH AMBASSADOR 
 
REF: A. BANGKOK 2984 (FOCUSED ON SPECIAL 301) 
¶B. BANGKOK 2848 (PREPARING FOR LOCKE-ALONGKORN MEETING) 
¶C. BANGKOK 2768 (PRIME MINISTER MEETS APCAC) 
¶D. BANGKOK 1338 (NEW INTELLECTUAL PROPERTY STRATEGY) 
¶E. BANGKOK 1203 (PATPONG RAID) 
¶F. BANGKOK 379 (RIGHT MOVES ON IPR) 
 
BANGKOK 00003272  001.2 OF 004 
 
 
¶1. (SBU) SUMMARY: Earlier this month, the Ambassador met with a 
group of key American intellectual property rights owners to discuss 
their take on the current intellectual property milieu in Thailand. 
The Ambassador emphasized that, with high-level Thai government 
interest in intellectual property rights issues, now is the time for 
the USG and US industry to help direct the Government's efforts 
towards meaningful intellectual property reforms. Although 
participants were pleased with Prime Minister Abhisit's strong 
messages on intellectual property, these rights holders reported 
limited progress on specific issues of most interest to them. 
Company representatives applauded the government's "Creative 
Thailand" initiative to expand the Thai economy into more 
innovation-based sectors, but fear that the government's support to 
this point is still too narrow to generate broad public support for 
IPR.  Nonetheless, representatives have been heartened by the recent 
effort of Thailand's Department of Intellectual Property to reach 
out to industry and hold regular interministerial meetings to 
improve Thailand's intellectual property regime. The Ambassador also 
plans to meet with rights holders more frequently to further 
strategize how we can help improve the promotion and protection of 
IPR in Thailand in support of the Thai authorities. Industry 
representatives expressed appreciation for the high level embassy 
engagement and the Ambassador's expressed interest on complex IPR 
issues. END SUMMARY. 
 
Strong Messages from the Thai Government 
---------------------------------------- 
 
¶2. (SBU) The Ambassador met with a diverse group of intellectual 
property rights owners doing business in Thailand on December 1. 
Participants included representatives from the motion picture, 
software, music, publishing, and pharmaceutical industries, as well 
as law firms and investigators who represent American patent and 
brand owners. Ambassador John asked the group to help the embassy 
address their intellectual property concerns by providing 
practicable suggestions the USG could propose to the Thai 
government. Participants praised the accessibility of Deputy 
Minister of Commerce Alongkorn Pornlaboot and Prime Minister Abhisit 
on IP issues. They are pleased that intellectual property has been 
placed on the national agenda. 
 
¶3. (SBU) Participants praised the Abhisit Government for an 
intellectual property reform effort in a series of legal amendments 
currently under review by the government. Copyright industry 
representatives explained that there are currently three sets of 
copyright amendments in the pipeline, each being considered 
separately. The first set of provisions would provide for landlord 
liability for sales of infringing goods on their premises and 
institute buyer liability for purchases of infringing products. 
Industry praised these amendments, saying they could go a long way 
towards ending piracy at certain "notorious markets" mentioned in 
USTR's Special 301 Report. The second set of provisions would 
implement certain obligations under the World Intellectual Property 
Organization Copyright and Performances and Phonograms Treaties. An 
industry representative serving on the Thai working group looking at 
these amendments reported that the provisions have not changed 
significantly since the 2004 meetings between USTR and the Thai 
Government on the then-draft provisions. A third set of amendments 
is intended to create a government-regulated collecting society to 
administer rights in musical works and sound recordings. These 
amendments have been very controversial, because they would require 
a change of business practices for Thailand's two largest music 
enterprises, RS and GMM Grammy. 
 
¶4. (SBU) Although industry representatives are encouraged by these 
developments, the Cabinet has not yet submitted any of the proposed 
legislation to the Parliament for review. The rights holders 
encouraged the Ambassador to keep pressure on the Abhisit 
Administration to ensure that these amendments do not languish in 
the legislative process. 
 
Positive Moves on Enforcement 
----------------------------- 
 
BANGKOK 00003272  002.2 OF 004 
 
 
 
¶5. (SBU) A representative of the publishing industry noted that 
Deputy Minister Alongkorn and Department of Intellectual Property 
(DIP) Director General Pajchima Tanasanti were pushing the Royal 
Thai Police and Department of Special Investigations to work with 
industry closely in investigating the source of counterfeit 
textbooks that had been found in the US market. (COMMENT: Pajchima's 
recent appointment as DIP Director General was pushed by Deputy 
Commerce Minister Alongkorn, during what we have been told was a 
contentious reshuffle at the Ministry. Pajchima brings a 
pro-enforcement reputation to the job. END COMMENT.) Software 
industry representatives highlighted that the high-level attention 
from the Thai government has led to greater cooperation by the 
Economic Crimes Division (ECD) of the Royal Thai Police in 
particular. These representatives praised the initiative of the ECD 
Chief Commander Kowit, who signed and sent out thousands of letters 
to corporate end-users, warning them to legitimize their software 
use or face criminal action. The Business Software Alliance (BSA) 
plans to follow through on the ECD letter campaign and start raiding 
targets that have not legitimized software since receiving the 
letters. 
 
¶6. (SBU) One impediment to the software enforcement campaign has 
been the difficulty of obtaining search warrants from the Central 
Intellectual Property and International Trade Court. In early 2009, 
the software industry met with the court and demonstrated that only 
three percent of its requests for search warrants had been 
successful in 2008. Based on that information, a particular group of 
judges began to more regularly issue search warrants for 
intellectual property cases, while others still refused to do so. 
Software industry representatives told the Ambassador that they now 
have a 30 to 40 percent success rate in obtaining warrants -- a 
marked improvement -- but still face difficulties from some judges. 
The difficulty of obtaining search warrants was a problem cited by 
meeting participants as a significant impediment to intellectual 
property enforcement. (NOTE: One software company filed a civil suit 
against an infringer this year and was pleased that the court issued 
Anton Piller orders (the right to search and seize evidence without 
prior warning) permitting the plaintiffs to gather evidence against 
the defendant. The court also awarded significant damages in the 
case. This was the first significant successful civil infringement 
case reported by US industry. END NOTE.) 
 
Is IPR Enforcement Rising or Falling? 
------------------------------------- 
 
¶7. (SBU) Thai Government figures that show a rise in both quantity 
and quality of enforcement actions (ref A). However, rights holders 
in the music, motion picture, and pharmaceutical industries, as well 
as several lawyers representing a broad array of foreign IP owners, 
reported that from their perspective the number of IP enforcement 
actions in 2009 has significantly declined from 2008. They explained 
that because of the financial crisis and consequent limited 
corporate resources, that rights owners have initiated fewer cases, 
while in their experience Thai law enforcement authorities rarely 
take the initiative to begin cases without prior rights owner 
investigation. Therefore, the number of enforcement actions should 
be lower in 2009. Moreover, rights owners say they carry the burden 
of investigating a suspected infringer, obtaining sufficient 
evidence for a search warrant, paying for a raid action, and 
following up to be certain that the police hand the case over to a 
prosecutor, making it less likely that Thai authorities are acting 
on their own. 
 
¶8. (SBU) For copyright owners, the legal environment is problematic. 
Under Thai law, the "compoundable offense" provision in Section 66 
of the Copyright Act allows copyright owners to settle criminal 
cases out of court and requires the copyright owner to file a 
complaint in order to initiate a law enforcement raid, and this is 
the route that rights holders are encouraged to take. The copyright 
industries believe that there are numerous other laws, including 
trademark, labeling, and censorship laws that would permit law 
enforcement to take action that would be more effective. The decline 
in numbers of enforcement actions has not led to countervailing rise 
in the quality of investigations, they believe. Other than one raid 
against an optical media factory, there have been no significant 
cases brought against major infringers. From industry's perspective, 
the thousands of raids each year against small retail targets do not 
have sufficient deterrent effect. 
 
 
BANGKOK 00003272  003.2 OF 004 
 
 
¶9. (SBU) Industry reps cited data to make their point. According to 
data provided by the Court, nine people were jailed for IP-related 
offenses in 2007, two in 2008, and five so far in 2009. Fines, 
rather than jail sentences, are preferred by the courts as being 
more appropriate for low-level street vendors. Local IP law firm 
Tilleke and Gibbins provided statistics demonstrating that 94 
percent of fines meted out by the Court are below 50,000 Baht 
(approximately $1,500). The largest fine over the past year was 
issued in a case involving the state-owned enterprise Thailand 
Tobacco Monopoly. Industry reps also noted that the court will 
rarely, if ever, grant preliminary injunctions against infringing 
activities. 
 
Prescriptions Still Pending for Pharmaceutical IP 
--------------------------------------------- ---- 
 
¶10. (SBU) The fight against counterfeit drugs pits industry 
interests against the concerns of others distrustful of industry. 
While industry would like to bring public attention to the 
prevalence of counterfeit medicines in the market, Thai law 
prohibits advertising to consumers on drug-related matters. When the 
pharmaceutical industry attempted to train officials on 
anti-counterfeiting, health activist NGOs protested, claiming that 
industry exaggerates the scope of counterfeiting in Thailand and is 
trying to block generics rather than actual counterfeit medicines. 
 
¶11.  (SBU) During the meeting with the Ambassador, pharmaceutical 
industry reps noted that their counterfeiting problems were 
worsening in Thailand. Counterfeit drugs are readily available from 
street vendors. The representatives would like the Thai authorities 
to adopt a zero tolerance policy for counterfeit drugs and start 
proactive enforcement, but the government is also dealing with other 
forces who believe that any cooperation with pharmaceutical 
companies will result in fewer, more expensive drugs available in 
Thailand. The pharmaceutical industry and several Thai law 
enforcement agencies signed an MOU to cooperate in tackling 
counterfeit medicines in 2008, but the representatives present said 
that the Food and Drug Administration of the Ministry of Public 
Health still is not cooperating on the MOU, largely, they believe, 
because of its position on generic drugs. Company representatives 
reported that even though Thai IP laws do not require a 
pharmaceutical rights holder to make a complaint in order to 
investigate counterfeit drugs, enforcement authorities are reluctant 
to take action unless industry brings a completed investigation to 
them. When enforcement authorities do conduct a raid, they seize 
only the counterfeit products, making it impossible to use records, 
computers, or other evidence to investigate the source of the 
product. 
 
 
¶12. (SBU) On the legislative and administrative front, industry 
representatives reported that Thailand does not provide 
pharmaceutical test data exclusivity and that patenting drugs in 
Thailand has been next to impossible. Although Thailand's Trade 
Secrets Law created a trade secrets regime, the law only protects 
the pharmaceutical companies' test dossiers from disclosure. To 
facilitate wider availability of pharmaceuticals, the Thai FDA 
regularly provides marketing approval to generic products based on 
bioequivalence testing alone, thereby giving a significant cost 
advantage to generic companies that did not invest in testing a 
drug. 
 
¶13. (SBU) Industry representatives explained that the need for data 
exclusivity is in part due to the significant problems they face in 
patenting their drugs in Thailand. (COMMENT: Over the past three 
years, members of the Thai patent bar have been unable to provide 
examples of any drug patent application that had been registered in 
Thailand during that period. Law firms in Thailand generally advise 
their clients that patent protection is unlikely. END COMMENT.) One 
law firm provided data to show that although several drugs were 
issued Thai patents in 2009, these patent applications had all been 
pending for between ten and twenty years. In some cases, lawyers 
reported that the patent applications had been fully examined and 
approved but stagnated for several years because high-level DIP 
officials would not sign the patent grant certificates.  Industry 
hopes that implementation of the Patent Cooperation Treaty, to which 
Thailand recently acceded (ref A), will help overcome this 
reluctance and speed patent processing. 
 
¶14. (SBU) While appreciating the fact that there have been no new 
 
BANGKOK 00003272  004.2 OF 004 
 
 
compulsory licenses issued by the Abhisit government, the 
pharmaceutical sector bemoaned their lack of dialogue with public 
health authorities. The industry is especially concerned that NGO 
and Ministry of Public Health activists continue to advocate for 
greater public access to medicines, despite existing patent 
protection. Thailand's National Health Assembly and its 
subcommittees do not generally seek industry input on key issues 
like patent reform, compulsory licensing, or pharmaceutical 
marketing and sales practices. Industry is concerned with the 
National Health Assembly's activist tendencies because the Prime 
Minister serves as its chair, and there is little review of its 
policy recommendations. Industry representatives also mentioned 
growing concerns over nontransparent procurement processes for 
medicines and the preferential treatment given to the Government 
Pharmaceutical Organization, a state-owned enterprise manufacturing 
generic products. 
 
Moving Forward 
-------------- 
 
¶15. (SBU) Ambassador John told participants that the current 
relative political stability in Thailand makes this a key time for 
the USG to help direct the Thai Government towards meaningful 
intellectual property reform. Participants mentioned several times 
that the Abhisit administration is very focused on improving their 
placement on the Special 301 Priority Watch List. When one industry 
enforcement representative compared the difficulty of working in 
Thailand to his company's experience working in Vietnam, China, 
Taiwan, and Korea, Ambassador John asked participants to describe 
the key differences between the approaches taken by these 
governments. Participants opined that only very strong political 
will can change the environment for intellectual property owners in 
developing countries. From their perspective, Thailand still lacks 
the political will to create tangible results. 
 
¶16. (SBU) Although industry representatives had hoped that the 
Creative Thailand initiative might provide them with an opportunity 
to partner with the Royal Thai Government in moving towards an 
intellectual property-based economy, they now question how effective 
the effort will be in broadening support for IPR in general. 
Pharmaceutical industry representatives noted that scientific and 
technological research and development are not considered part of 
the creative economy. Unsurprisingly, DIP and Deputy Minister 
Alongkorn are focused initially on the Thai film industry, as well 
as areas such as traditional food and crafts and tourism, where 
Thailand's economy is already reasonably strong. 
 
¶17. (SBU) Nonetheless, the moment is ripe to engage further with 
Thailand's Department of Intellectual Property which has reached out 
to industry to hold regular interministerial meetings to improve 
Thailand's intellectual property regime. The first meeting is 
expected to be held in January. The Ambassador also plans to meet 
with this group of rights holders more frequently to further 
strategize how we can help improve the promotion and protection of 
IPR in Thailand in support of the Thai authorities. Industry 
representatives expressed appreciation for the high level embassy 
engagement and the Ambassador's interest on complex IPR issues. 
 
JOHN