Supachai Panitchpakdi and Mickey Kantor letters

Thailand/US IPR disputes - correspondence from 1994/3

The following is an 1994/3 exchange of letters between Supachai
Panitchpakdi, Deputy Prime Minister of Thailand, and then USTR
Michael Kantor, concerning agreements between the US and Thailand
on the protection on intellectual property.  Supachai
Panitchpakdi will be the next head of the WTO.  The exchange of
letters is a good illustration of the close supervision by the
USTR of national laws on intellectual property.  Of particular
concern to this list would be the areas involving patents and
pharmaceuticals, where the Thai government is asked by the USTR
to abandon any collection of economic data from the
pharmaceutical companies that is not already publicly available,
to restrict compulsory licensing, and to create a non-patent
system of market exclusivity for pharmaceuticals.  It was the
later system that made fluconazole so expensive, before the
market exclusivity was eliminated last year (leading to a 95
percent drop in price).   

 Jamie Love <>

<-------------------begin correspondence------------------>

The following text is intended for general reference only. It is
currently under review for accuracy and completeness, as well as

 Trade Compliance Center

 TEXT Deputy Prime Minister Supachai to Ambassador Kantor.  The
original was delivered to Ambassador Lambertson in Bangkok

    1024 Wisconsin Avenue, N.W.
    Washington, D.C. 20007-3620

    February 9, 1994

    W. Robert Cassidy
    Assistant United States Trade Representative 
    Office of the United States Trade Representative 
    Washington, D.C.

    Dear Bob,

    I have been instructed to deliver the attached copy of a
letter from Deputy Prime Minister Supachai to Ambassador Kantor. 
The original was delivered to Ambassador Lambertson in Bangkok
for forwarding.

    I would appreciate your bringing it to Ambassador Kantor's

    Yours Sincerely,

    Nabthong Thongyal
    Minister (Commercial)

    Office of the Prime Minister
    Government House
    Thanon Nakhon Pathom
    Bangkok 10300

    9 February 1994

    Ambassador Michael Kantor
    United States Trade Representative
    Office of the United States Trade Representative 
    600 17th Street, N.W.
    Washington, D.C. 20506

    Dear Ambassador Kantor,

    I wish to refer to your letter dated September 7, 1993
informing me that Thailand would be removed from the Priority
Foreign Country List and placed on the Special 301 Priority Watch
List, and that this would be reviewed again in January this year.

    I am taking this opportunity to inform you of the progress
that has been made in the area of intellectual property
protection since last September:

    1. As you know, the draft new Copyright Law had passed the
first reading in Parliament and is now under the scrutiny of a
Parliamentary Commission. The new law which will include
protection for computer programs will be consistent with TRIPs
and Berne standards. I believe that the Commission is well along
in its work and the Commission's report will be submitted to
Parliament when it opens in May.

    2. The Committee which has been set up to expedite the
establishment of a specialized intellectual Property court has
finished drafting a bill for that purpose. Courts for
intellectual property and international trade will be set up in
Bangkok and some other provinces with special Jurisdiction for
intellectual property and international trade cases. They
will adopt streamlined and simplified procedures to expedite
their deliberations. Pending the establishment of such courts,
the Ministry of Justice has set up a special division dealing
with intellectual property cases.

    3. The Thai Government has continued vigorously to suppress
copyright piracy. I believe that the results of these sustained
efforts are satisfactory to all interested Parties including
representatives of the private sector. Recently, there have
been efforts to circumvent the Copyright Law through such
innovative practices such as direct mail order, but the Thai
Government has taken measures to counter these practices

    As regards the five copyright infringement cases the court
has made decision on two cases, namely, the Macalpine and the
Robot cases in which the infringers have been punished in
accordance with the law.

    4. The Thai Government is already initiating steps to
introduce new intellectual property laws or to amend existing
ones to bring them into conformity with the recently concluded
Uruguay Round negotiations on TRIPs in the areas of, inter alia,
plants and plant varieties, geographical indications, and trade
secrets. The Thai Government is fully committed to honoring
its obligation under the Uruguay Round.

In view of the above, I would argue that we should seize this
opportunity to improve our bilateral relations to take advantage
of the favorable developments in the global and regional arenas.
In this connection, I recall that when Prime Minister Chuan
Leekpai met President Bill Clinton in November in Seattle for the
APEC Economic Leaders Meeting, the subject of removing Thailand
from all lists was discussed as a way to enhance our bilateral

    I therefore hope that you will consider removing Thailand
from all Watch Lists as soon as possible. Incidentally, I think
that this will help the process of passing the new Copyright Law
in the May session because the Government would be able to
argue strongly and effectively that the Law is being amended to
comply with international standards, and not under pressure
from a foreign country.

    I will be ready to discuss the matter further with you either
in Washington, D.C. or in Bangkok, at a time which is
mutually convenient.


    Supachai Panitchpakdi
    Deputy Prime Minister

Executive Office of the President
Washington, D.C. 20506

    May 5, 1993

    His Excellency Uthai Pimchaichon
    Minister of Commerce
    Ministry of Commerce
    Bangkok, Thailand

    Dear Mr. Minister:

    I very much appreciated the opportunity to meet with you on
May 1 to discuss intellectual property protection and
enforcement in Thailand. I believe the discussions were useful
and helped substantively to move our governments toward a
resolution of this difficult problem.

    Elimination of piracy in Thailand has been a longstanding
objective of the U.S. Government and I have been impressed with
the recent steps taken by Royal Thai Government (RTG) to combat
copyright piracy and your personal actions and commitment to
address this problem on a continuing basis. However, experience
has taught us that the elimination of piracy will require
sustained efforts over a long period of time along with effective
laws to protect intellectual property rights -- laws equivalent
to international standards. In the absence of strong laws and a
proven record of effective enforcement, I had no alternative but
to identify Thailand as a priority foreign country on April 30,

    Our delegations have discussed in detail the elements of a
comprehensive program of protection and enforcement of
intellectual property rights. In this regard, I have enclosed a
paper that sets forth the general standards that I will use to
determine whether the RTG provides adequate and effective
protection and enforcement in the areas of copyright,  
trademarks and patents. Based on our discussions, I understand
the RTG will introduce appropriate legislation to protect and
enforce intellectual property rights and, during the interim
period of the Parliamentary approval process, will use, to    
the fullest extent possible under existing laws, regulations and
guidelines, equivalent in effect, to protect and enforce   
intellectual property rights. On or before July 31, 1993, based
on the results achieved, I will review Thailand's   
identification as a priority foreign country and what action to
take under U.S. trade law.

    His Excellency Uthai Pimchaichcn
    Page 2

    If the RTG efforts produce the necessary results, I will
seriously consider revoking Thailand's status as a priority
foreign country and making a recommendation for positive changes
in Thailand's treatment under the Generalized System of
Preferences. However, if adequate and effective protection and
enforcement of intellectual property rights is not achieved,
I will have no other alternative but to take appropriate action.

    Again, I appreciated the opportunity to meet and work with
you to resolve this longstanding issue and to set in motion a
more productive trade relationship to the mutual benefit of all
our citizens.


    Michael Kantor



    Copyright and Trademark Enforcement

    The Royal Thai Government (RTG) will continue its efforts
forts to eradicate piracy and counterfeiting as part of its
objective of achieving technological and economic development and
will ensure adequate and effective enforcement of
copyrights and trademarks over the long-term. In this regard, the
RTG recently adopted a program using other laws, in
addition to the copyright and trademark laws, to broaden and
strengthen the protection of intellectual property rights.
These laws include:

    1. The Consumer Protection Act, 1979;
    2. The Control of Audio/Video Tapes Act, 1987;
    3. The Price Fixing and Anti-Monopoly Act, 1979;
    4. The Export and Import of Merchandise Act, 1979;
    5. The Announcement of the National Executive Council No 285:
Accounting Standard;
    6. Section 137 of the Criminal Code: False Complaint;
    7. The Factory Act; and,
    8. The Revenue Code.

    As part of its longer-term, sustained enforcement program,
the RTG will continue to use these laws to eliminate piracy and
counterfeiting of trademarks. However, these laws will not be
used in ways that would create barriers to legitimate trade
or impede transactions by licensees of intellectual property

    The Ministry of Commerce, in discharging its duties under the
Export and Import Act, will work with the competent
authorities to promulgate regulations and guidelines which permit
competent authorities to detain suspected infringing
merchandise and infringing merchandise, enable intellectual
property right owners or their authorized representatives to
notify competent authorities concerning suspected infringing
shipments, and provide for the creation of a database to store
information regarding trademarks and copyrights to be protected.
The Ministry of Commerce will also insure that information
provided by IPR owners is disseminated to the competent
government authorities including information provided by IPR
owners on methods used by infringers, and will also transmit
information regarding known or suspected importers or exporters
of infringing goods to the competent government authorities. The
regulations or guidelines will also be consistent with the
provisions of Section 4 of the December 20, 1991 draft text of
the TRIPs agreement in defining the powers of Customs
authorities, the rights of the copyright and trademark owner and
the rights of owners, importers, or consignees of goods
that are subject to interdiction for infringement of copyright or

    Legislative Initiatives to Improve IPR Protection and

    The RTG will provide adequate and effective protection for
intellectual property rights, will submit bills and develop
regulatory and judicial procedures that adequately and
effectively protect intellectual property rights. In this regard,
the RTG will:

    1. Introduce a bill in the next session of parliament to make
Thailand's copyright law and regulations consistent with
TRIPs standards:

     Thailand, however, will continue to provide protection for
sound recordings equivalent to that for other copyrighted
works under existing Thai law and under the new law, will provide
such protection on the basis of national treatment
including exclusive rights to authorize or prohibit reproduction,
adaptation, rental and distribution (including importation); and,

     Increase penalties for copyright infringement.

    2. Adhere to the substantive provisions of the Berne
Convention for the Protection of Literary and Artistic Works
(Paris 1971) text.

    To expedite prosecution of intellectual property infringement
actions, the RTG is taking steps to establish an intellectual
property court that will achieve the following:

     Clarify the evidentiary requirements for prosecuting IPR
cases and accept affidavit and other documentary evidence in
judicial proceedings;

     Streamline procedures to reduce the time for court cases to
be resolved; and,

     Simplify evidentiary requirements to permit prompt hearings
for the parties, e.g., clarify translation requirements; and will
complete the establishment of this court as soon as possible. In
the interim, the RTG has established a special section of the
Civil Court that will implement these objectives to the maximum
extent possible under current law.


    The RTG will develop guidelines to implement the patent law
to, inter alia, narrowly define the scope of the authority of
the Pharmaceutical Patent Board (e.g., the Board may only request
publicly available information), define terms and
conditions for which compulsory licenses may be issued, such as
clarifying that legitimate reasons for non-working include
economic, technical and legal reasons, limiting dependent patent
compulsory licenses consistent with TRIPs standards, and
providing for effective compensation. The first draft of those
guidelines will be completed by June 15, 1993, and the RTG
will consult with other interested parties including the U.S.
Government prior to completion of the guidelines. These
guidelines will apply until the Patent law is amended.

    The RTG will submit a bill to amend the patent law as soon as
possible after the conclusion of the Uruguay Round which
submission should occur no later than the end of 1994 to narrow
the circumstances when a compulsory license may be granted,
codify the points treated under the guidelines being developed,
repeal Article 83 bis and make other changes necessary to
meet TRIPs standards.

    The U.S. Government has achieved market exclusivity for
pharmaceuticals from several other trading partners in the
region, including the Republic of Korea, the People's Republic of
China and Taiwan, that is not provide product patent protection
for these products prior to 1986. The term of such market
exclusivity ranges from 7 to 10 years. The U.S. Government
expects the RTG to provide a commensurate term of market
exclusivity using means appropriate to the Thai circumstances.

 This document has met TCC criteria to be categorized by the
following Issue(s):  Intellectual Property, Patents, Trademarks,
Copyrights  Country/Signatory:  Thailand