Trade mark licensing is a common way for businesses to expand into new markets, operate through local affiliates, or allow distributors and business partners to use their brands. However, the rules governing trade mark licenses vary from country to country, and Thailand has some requirements that often surprise foreign brand owners.
Below are five practical questions we are frequently asked about trade mark licensing in Thailand.
Generally, yes.
Thailand is one of the jurisdictions where recording a trade mark license is particularly important. Under the Thai Trade Mark Act, a trade mark license agreement must be made in writing and recorded with the Department of Intellectual Property (DIP) in order to be fully effective and enforceable under Thai law.
However, there is an important point that many foreign brand owners are unaware of: only registered trade marks can be recorded in Thailand. Pending trade mark applications cannot be recorded with the DIP.
This does not mean that pending applications cannot be licensed. Parties are free to include both registered trade marks and pending applications in a license agreement. However, only the registered trade marks can be recorded with the DIP. Once a pending application proceeds to registration, the parties may then apply to record the license against that registration.
Failure to record a trade mark license may create several practical issues, including:
Practice tip: If a license agreement covers a large trade mark portfolio, consider including both registered trade marks and pending applications in the annex to the agreement. When a pending application proceeds to registration, it may be possible to record the newly registered trade mark by submitting an updated annex to the DIP, without the need to prepare and execute a new license agreement. This approach reflects the current practice of the Thai Trade Mark Office and may be subject to change.
In most cases, yes.
Many businesses assume that a subsidiary can automatically use its parent company's trade marks because both companies belong to the same corporate group. From a legal perspective, however, the parent company and subsidiary are separate entities.
If the trade mark is owned by the parent company but used by a Thai subsidiary, a written license agreement is generally advisable. A properly documented license helps demonstrate that the subsidiary's use is authorised and clarifies the relationship between the parties.
Where the license is recorded with the DIP, the subsidiary's use may also be recognised as use by the trade mark owner under Thai law.
The absence of a license agreement may not create problems in day-to-day operations. However, issues often arise later during non-use cancellation proceedings, infringement disputes, due diligence reviews, or corporate transactions. Putting a license agreement in place at the outset is usually simpler and less costly than addressing these issues after a dispute arises.
Yes, provided the license has been properly recorded with the DIP.
A recorded trade mark license allows use of the trade mark by the licensee to be recognised as use by the trade mark owner. This can be particularly important where a trade mark owner relies on a local affiliate, distributor, franchisee, or other business partner to use the mark in Thailand.
This recognition may help preserve the registration and defend it against a non-use cancellation action.
Without a recorded license, the trade mark owner may face difficulties relying on the licensee's use as evidence of use in Thailand.
Yes.
There is no requirement to prepare a Thailand-specific trade mark license agreement. Global or regional license agreements can generally be recorded in Thailand provided that:
One practical concern is confidentiality. Since a copy of the license agreement must be submitted to the DIP, parties are often reluctant to disclose commercially sensitive provisions such as royalty rates, sales targets, or other financial arrangements.
In practice, this concern can often be addressed by preparing a short-form version of the agreement for recordal purposes. Thai law does not require royalty provisions or other commercially sensitive terms to be disclosed in order for a trade mark license to be recorded.
In many cases, the license will continue to remain in effect.
Under the Thai Trade Mark Act, unless the license agreement provides otherwise, a trade mark license does not automatically terminate merely because ownership of the licensed trade mark changes. The new trade mark owner generally succeeds to the rights and obligations of the original licensor under the existing license agreement.
However, the parties remain free to agree otherwise. For example, the agreement may provide that the license terminates upon assignment of the trade mark or that the licensee's consent is required before the trade mark is transferred.
Accordingly, businesses acquiring or selling trade mark portfolios should review any existing license agreements as part of their due diligence process.
Although the existing license may continue to be effective, it is generally advisable for the parties to enter into an amended or replacement license agreement reflecting the new trade mark owner as licensor and to record the updated arrangement with the DIP. This helps ensure that the register accurately reflects the current ownership and licensing structure.
Many businesses view trade mark licensing as a purely commercial arrangement. In Thailand, however, recordal can play an important role in preserving and enforcing trade mark rights.
Two points are particularly worth remembering:
Addressing these issues early can help avoid complications later, particularly in non-use cancellation actions, enforcement matters, corporate transactions, and due diligence exercises.
If you have any questions regarding trade mark licensing or recordal requirements in Thailand, please contact TMGTHAILAND@ROUSE.COM
Author: Nattaya Mahakunakorn