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Proposed Changes to Personal Income Tax Exemption on Severance Pay

The Ministry of Finance has put forward a draft ministerial regulation to revise the personal income tax exemption on severance pay. This proposal aims to update the existing threshold established in clause 2(51) of Ministerial Regulation No. 126 (B.E. 2509), as amended by Ministerial Regulation No. 217 (B.E. 2542).

Current Exemption

Under the current ministerial regulation, employees receiving severance pay in accordance with the Labor Protection Act B.E. 2541 and State Enterprise Relations Act B.E. 2543 are eligible for tax exemption. This exemption applies to the portion of severance pay not exceeding the salary for the last 300 working days, with a maximum limit of 300,000 baht. Notably, this exemption excludes severance pay received due to retirement or the expiration of fixed-term employment contracts.

The existing regulation aligns with Section 118 of the Labor Protection Act B.E. 2541 (No. 1), which mandates severance pay for employees with over 10 years of continuous service.

Legislative Changes

The Labor Protection Act B.E. 2562 (No. 7) amended Section 118, introducing a new severance pay rate for employees with over 20 years of continuous service. This amendment increased the severance pay to not less than the salary for the last 400 working days.

Proposed New Exemption

In response to these legislative changes, the Ministry of Finance has drafted a revised ministerial regulation. The key changes in the draft revised ministerial regulation are:

  1. Increasing the tax-exempt portion of severance pay to the amount not exceeding wages or salary for the last 400 working days.
  2. Raising the maximum exemption limit from 300,000 baht to 600,000 baht.
  3. Applying the new exemption to severance pay received from 1 January 2023 onwards.
group of persons wearing yellow safety helmet during daytime

Objectives

The proposed changes serve two main purposes:

  1. Aligning the tax exemption regulations with the amended Labor Protection Act B.E. 2541.
  2. Providing tax relief to employees facing termination, especially in light of economic challenges.

Implementation Status

The Cabinet has approved the draft revised ministerial regulation. It will come into effect upon publication in the Royal Gazette.

This revision aims to update the tax exemption on severance pay to reflect recent changes in labor law and to provide increased financial support to employees during employment transitions.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Introduces New Regulation to Protect Online Shoppers

The Office of the Consumer Protection Board (OCPB) in Thailand has approved a draft announcement aimed at addressing the growing concerns of e-commerce fraud and consumer protection in online shopping. The new regulations, set to be published in the Royal Gazette in July, will introduce significant changes to cash-on-delivery services and provide more rights to consumers.

The Minister to the Prime Minister’s Office stated that numerous complaints have been received from consumers regarding issues with online purchases. These include receiving unordered packages with cash-on-delivery demands, difficulties in contacting sellers after problematic purchases, and inability to obtain refunds due to logistics companies claiming they have already paid the sellers.

In the first quarter of 2024 alone, the Office of the Consumer Protection Board (OCPB) received a staggering 5,786 complaints related to consumer goods and services. Of these, 2,162 were specifically about online shopping – a testament to the growing pains of Thailand’s digital economy.

To tackle these issues, the OCPB has introduced the “Dee-Delivery” measure, which imposes new requirements on logistics providers offering cash-on-delivery services. This comprehensive set of regulations, soon to be enshrined in law, promises to revolutionize the cash-on-delivery system that has long been a staple of Thai e-commerce.

gray steel shopping cart

Picture this, a courier arrives at your door with a package. Under the new rules, you are no longer at the mercy of what is inside. You can open it, inspect it, and if it is not what you ordered or if it is damaged, you can refuse it on the spot. No more battles for refunds or chasing ghost sellers.

Key aspects of the new regulations include:

  1. Mandatory detailed information: Logistics companies must provide comprehensive details about the sender, including name, address, and contact information.
  2. Five-day holding period: Payment collected from consumers must be held by the logistics company for five days before transferring to the seller, allowing consumers time to report issues and request refunds.
  3. Right to inspect: Consumers are granted the right to open and inspect goods before making payment.
  4. Refusal rights: If problems are found during an inspection, consumers can refuse payment and reject the goods.
  5. Clear documentation: All transaction details must be clearly stated on the receipt in Thai language with specific font size requirements.

The new measures also outline conditions under which consumers are entitled to refunds, such as receiving incorrect or damaged items, or goods that were not ordered.

These regulations aim to enhance transparency in online transactions and provide consumers with more protection against fraudulent practices. The OCPB hopes that by implementing these measures, the number of complaints related to e-commerce will decrease, improving overall consumer confidence in online shopping.

person marking check on opened book

The new regulations are expected to take effect 120 days after their publication in the Royal Gazette, giving businesses time to adapt to the new requirements. Failure to comply with these regulations could result in significant penalties, including fines of up to 200,000 baht, imprisonment for up to one year, or both.

This proactive approach by the Thai government demonstrates a commitment to addressing the evolving challenges in the e-commerce landscape and ensuring a safer online shopping environment for consumers.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s ETDA Unveils Comprehensive Guidelines to Combat Online Advertising Fraud

In a significant move to address the growing concerns of digital fraud and misleading advertisements, Thailand’s Electronic Transactions Development Agency (ETDA) has introduced a comprehensive set of guidelines aimed at regulating advertising on digital platforms. This initiative, detailed in the “Manual for Advertising Oversight on Digital Platform Services,” comes as a response to the increasing incidents of online scams, impersonation of public figures, and fraudulent activities that have resulted in substantial financial losses for unsuspecting users.

The digital landscape in Thailand has witnessed a surge in sophisticated scams, often involving the impersonation of celebrities, influencers, and reputable businesses. These fraudulent activities have not only led to financial damages but have also eroded public trust in online platforms. Recognizing the urgent need for intervention, the ETDA has developed these guidelines to establish a more secure and trustworthy online advertising environment.

User Authentication: At the heart of the new regulations is a robust system for advertiser verification. Digital platform operators are now required to implement stringent user authentication processes for all advertisers. The guidelines mandate a minimum Identity Assurance Level (IAL), which may involve using government-issued identification or other reliable methods to confirm the true identity of advertisers. This measure aims to create a significant barrier for potential scammers and impersonators, making it more challenging for them to operate anonymously on these platforms.

Advertiser Data Management: The guidelines also place a strong emphasis on data management and transparency. Platform operators must maintain comprehensive records of advertisers in a machine-readable format. This includes the creation of watchlists for potentially problematic advertisers, blacklists for those who have violated policies or laws, and whitelists for trusted advertisers. By implementing these lists, platforms can more effectively manage the quality and reliability of advertisements appearing on their services.

codes on tilt shift lens

Pre-Publication Screening: Pre-publication screening is another critical component of the new guidelines. Digital platforms are expected to establish clear criteria for prohibited or restricted advertisements and implement thorough screening processes before any ad is published. This proactive approach aims to prevent harmful or misleading content from reaching users in the first place.

Ongoing Monitoring: Recognizing that no system is perfect, the ETDA also mandates ongoing monitoring of published advertisements. Platforms are required to use a combination of automated systems and human review to continuously assess the content on their sites. The guidelines suggest prioritizing high-risk content for more intensive scrutiny, ensuring that potentially harmful ads are quickly identified and addressed.

User Reporting Mechanisms: User empowerment is a key feature of the new regulations. Digital platforms must provide easy channels for users to report inappropriate or illegal advertisements. These reporting mechanisms should be prominently displayed alongside advertisements, allowing users to flag suspicious content quickly. Furthermore, platforms are required to have clear processes for handling these reports, including timely reviews and responses to user concerns.

green and white line illustration

Transparency: Transparency is emphasized throughout the guidelines. Platform operators are now required to disclose their policies, processes, and tools used in ad management and content moderation to users. This openness is intended to build trust between platforms and their users, providing clarity on how advertising is managed and moderated.

The ETDA’s approach balances the need for stringent oversight with the practicalities of operating a digital platform. While the guidelines are comprehensive, they allow for flexibility in implementation, recognizing that different platforms may have varying business models and technical capabilities. The agency encourages platform operators to adapt these guidelines to their specific circumstances while maintaining the core principles of user protection and fraud prevention.

By implementing these measures, the ETDA aims to create a more trustworthy online advertising environment in Thailand. The guidelines are expected to significantly reduce the incidence of fraud and scams on digital platforms, protecting consumers from financial losses and restoring confidence in online transactions and advertisements.

As digital platforms begin to implement these new guidelines, Thai consumers can look forward to a safer online environment. The success of this initiative could potentially serve as a model for other countries grappling with similar issues in the digital advertising space. As the digital economy continues to grow, such proactive measures by regulatory bodies like the ETDA will be crucial in ensuring that the benefits of online platforms are not overshadowed by the risks of fraud and deception.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Modernizes Foreign Business Licensing: New E-Foreign System and Legislative Updates

Thailand’s Department of Business Development (DBD) is taking significant steps to modernize the process for foreign businesses operating in the country. In line with the government’s policy to leverage technology for improved public services, the DBD has introduced the e-foreign system for issuing Foreign Business Licenses (FBL) and Foreign Business Certificates (FBC). This digital transformation necessitates updates to the existing regulatory framework, prompting the proposal of four draft subordinate laws under the Foreign Business Act of 1999 (Act).

The primary objective of these legislative updates is to streamline the application and issuance procedures for FBLs and FBCs, aligning them with the new electronic system. To ensure transparency and gather stakeholder input, these draft regulations have been opened for public hearings until June 25, 2024. The proposed changes encompass:

  1. Revised application forms and formats for FBLs and FBCs
  2. Updated procedures for issuing license and certificate substitutes
  3. Enhanced online filing options for certain categories of foreign businesses
group of people photo

Key aspects of the proposed changes include:

  1. Simplification of Forms: The new forms (Tor. 2, Tor. 3, Tor. 6, and Tor. 7) remove redundant information, such as taxpayer identification numbers, to facilitate easier online data entry.
  2. Standardization of Substitute Documents: The formats for substitute licenses and certificates will now mirror their original counterparts, with the addition of a “substitute” designation.
  3. Expanded Online Procedures: Particularly for FBCs under Section 12 of the Act, the draft regulations aim to elevate online applications to the same status as in-person submissions.

While these changes may seem subtle, they represent a significant step towards a more efficient and digitally oriented business environment for foreign entities in Thailand. The DBD’s initiative not only modernizes the licensing process but also aligns with broader government efforts to enhance Thailand’s appeal as a destination for foreign investment.

As these amendments will have far-reaching implications for the foreign business community in Thailand, stakeholders are encouraged to participate in the public hearing process. The final implementation of these measures, pending approval, promises to create a more streamlined and user-friendly system for foreign businesses seeking to establish or maintain their presence in the Thai market.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Unveils Comprehensive Changes to Visa and Travel System

In a bid to boost its tourism and business sectors, Thailand has recently introduced a series of policies and measures that have been approved by the Cabinet following proposals from the Ministry of Foreign Affairs. The successful implementation of these changes will require collaboration from various government bodies, including the Ministry of Labour and the Ministry of Higher Education, Science, Research and Innovation.

Short-term measures (effective from June 2024):

1. Visa exemption for visitors will be extended from 57 to 93 countries, with the maximum allowable stay increased to 60 days.

2. A new Destination Thailand Visa (DTV) will be introduced to attract high-skilled foreigners, digital nomads, and tourists looking to combine work and travel (workcation) for extended periods. The DTV will be valid for up to 5 years, allowing multiple entries and stays of up to 180 days per entry, with the option to convert to other visa types.

3. The Non-Immigrant Visa type “ED” (Non-ED) for educational purposes will be enhanced to support international students. Graduates holding this improved Non-ED Visa can remain in Thailand for up to 1 year after graduation and convert their visa to a Non-B (working) visa without leaving the country.

Medium-term measures: (effective from September – December 2024):

1. Non-Immigrant visa categories will be streamlined from 17 to 7, including Non-B, Non-ED, Non-F, Non-M, Non-O (others), Non-O (L-A), and Non-L-A types.

2. The long-stay retirement visa (Non-Immigrant visa type “O-A”) will be revised, with the required health insurance deposit for medical expenses in Thailand reduced from 3,000,000 THB to 40,000 THB for outpatient care and 400,000 THB for inpatient care.

3. The E-Visa service will be expanded to cover all Thai embassies and consulates worldwide by December 2024, making it easier for foreigners to apply for visas online.

photo of woman sitting on boat spreading her arms

Long-term measures: (effective from June 2025):

Thailand will launch an Electronic Travel Authorization (ETA) system aimed at foreign nationals exempt from visa requirements. The ETA system will enhance the efficiency of foreigner screening using QR codes to facilitate airport entry. Beta testing of the ETA system is planned for December 2024, with a full rollout expected by June 2025.

These proposed measures demonstrate Thailand’s commitment to attracting foreign visitors and talent, which will be crucial in driving economic growth and boosting the country’s competitiveness. The strategic visa policies and systems are designed to encourage foreigners to travel and work in Thailand during the high season while also promoting the country as a global education hub.​​​​​​​​​​​​​​​​

Author: Panisa Suwanmatajarn, Managing Partner.

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Filing of a Lawsuit for Damages According to the Thailand Trade Competition Act

The Thailand Trade Competition Act B.E. 2560 (2017) (Trade Competition Act) established the Trade Competition Commission of Thailand (TCCT) as an independent governmental body to regulate market behaviours and impose guidelines in order to promote a competitive market environment in Thailand. The key objective of the Competition Act is to prevent monopolies and allow the market to grow freely and fairly without unfair domination by large business operating groups, such as merging of business between the two major retail businesses. The law allows business operators suffering from breaching of the law by other business operators to file a lawsuit claiming for damages.

Criteria

The Trade Competition Act has established the following criteria for filing a lawsuit claiming for damages:

  1. The right to claim damages by filing a lawsuit to the court will be under the following criteria.
    • Abusing of a dominant position;
    • Conducting a merger that may cause a monopoly in a dominant position in a market with no permission from the TCCT;
    • Conducting cartel or bid-riggings;
    • Unfairly obstructing or hindering the business operations of other business operators through abusive exploitation of dominant positions or bargaining leverage against others; or
    • Conducting an agreement with foreign firms that harms competition and consumption in an unjustified manner.

However, the Trade Competition Act does not stipulate whether the damages be claimed will be actual damages or punitive damages. Moreover, there is no existing court precedent concerning this issue has been rendered. Therefore, the method to determine scope of liability in terms of damages according to the Trade Competition Act must be referenced by the method used for wrongful acts under the Civil and Commercial Code which shall depend on the circumstances and gravity of the wrongful act and the damages as claimed must be the actual one.

  1. In term of the period of legal prescription, it is limited to one year as from the date that the injured person becomes aware of the violation or should have become aware of the violation, otherwise the right to file a lawsuit to the court will be lapsed.
judge signing on the papers

Eligible Parties

Civil lawsuits claiming for damages can be brought to the  Central Intellectual Property and International Trade Court (IP Court).

The eligible party that can file a lawsuit to the IP court is a person or business operator who suffers damages under the criteria as above mentioned. The Trade Competition Act also adds another approach granting the power to the TCCT and associations or foundations recognized by the TCCT (e.g. the Office of the Consumer Protection Board in various districts in Bangkok (Phaya Thai, Lak Song, etc.). These entities have the power to file lawsuits claiming damages on behalf of consumers or members of the associations or foundations.

brown and white concrete building

Jurisdiction over the Case

The competent court having jurisdiction over lawsuits related to the Trade Competition Act is IP Court. Even though IP Court has jurisdiction over lawsuits concerning the Trade Competition Act, there is no case regarding this issue brought to the attention of the IP Court. The cases were settled during consideration of TCCT which administrative fines were imposed.

In conclusion, the Trade Competition Act provides a mechanism for injured person to seek damages from a person or business operator that commits violation of the Trade Competition Act. While the act itself does not clearly specify the method of determining the scope of liability, the general principle of law for civil liability will be applied.

Author: Panisa Suwanmatajarn, Managing Partner.

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Streamlining Thailand’s Industrial Operations: Amending the IEAT Act

Thailand’s industrial sector, a key driver of economic growth and investment, is poised for a significant overhaul with the proposed amendments to the Industrial Estate Authority of Thailand Act, B.E. 2522 (1979) (“Act”). On May 7, 2024, the Industrial Estate Authority of Thailand (IEAT) initiated a public hearing process on the draft of the new Industrial Estate Authority of Thailand Act, B.E. …. (“Draft Act”). This legislative effort aims to address longstanding challenges and obstacles encountered during the enforcement of the original Act, aligning its provisions with contemporary conditions and future developments in industry and commerce.

At the heart of the Draft Act lies a redefinition of IEAT’s mission and objectives. The current Act lacks an explicit delineation of IEAT’s role, leaving its focus somewhat ambiguous. The amendments seek to clarify and expand IEAT’s powers and objectives. This clarity is crucial in determining whether IEAT’s primary emphasis should be on promoting investment in industrial estates with a focus on profitability, fostering a conducive investment environment, or striking a balance between these aims while considering environmental impacts and ensuring harmonious coexistence between the industrial sector and society.

A significant aspect of the Draft Act revolves around the amendment of the permit system. Recognizing the potential impact of various activities conducted within industrial estates, such as pollution or resource utilization, on surrounding communities and environmental quality, the Draft Act proposes the establishment of pollution control standards and waste emission regulations. To effectively control and oversee activities that significantly affect life, rights, freedoms, society, or public interests, the Draft Act introduces measures prohibiting such activities or businesses until the necessary permissions are granted.

aerial view of white buildings

Furthermore, the Draft Act seeks to enhance the committee system by granting broader authority to issue regulations, rules, criteria, and policies to support the operations and activities of IEAT, industrial operators, and commercial operators. This expanded power encompasses the committee’s ability to issue regulations or rules concerning engineering specifications, environmental standards, and safety standards for activities and operations within industrial estates, as well as sale prices, rental rates, hire-purchase rates, and the duration of leases and hire-purchase agreements for real and personal property, as well as maintenance fees for facilities and service rates within industrial estates.

Recognizing the potential risks of accidents or damages affecting public order, the Draft Act grants enhanced authority to officials to prevent and maintain public order, address urgent situations requiring immediate resolution, and manage obstacles that may hinder their efforts to prevent and maintain order. Officials will be empowered to apply the principles of the Disaster Prevention and Mitigation Act, B.E. 2550 (2007) in such circumstances.

Additionally, the Draft Act proposes adjustments to various penalty provisions. While some criminal penalties will be replaced with disciplinary fines to provide appropriate punishment for offenders and avoid criminal records, certain criminal penalties will remain in place for specific offenses to prevent misconduct and effectively regulate industrial and commercial activities.

The public hearing process for the Draft Act is currently underway and will continue until June 15, 2024. The proposed revisions to the IEAT Act reflect a proactive response to the evolving challenges of the industrial sector, tailored to modern demands and focused on promoting sustainable development while reinforcing Thailand’s industrial prowess for future competitiveness and growth.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s Comprehensive Roadmap for Personal Data Protection: The Master Plan 2023-2026

Thailand has taken a significant step towards strengthening personal data protection within its borders by introducing the Master Plan of Personal Data Promotion and Protection from 2023 to 2026 (Master Plan). This comprehensive roadmap, approved by the Personal Data Protection Committee and the Committee of the National Digital Economy and Society Commission (ONDE), aims to establish a robust framework for safeguarding individuals’ privacy rights and fostering a secure digital environment.

Mandated by Section 44 (1) of the Personal Data Protection Act B.E.2562 (2019) (PDPA), the Office of the Personal Data Protection Commission (PDPC) has meticulously crafted this Master Plan to align with national policies, strategies, and relevant plans. The plan was officially published in the Royal Gazette and came into force on April 29, 2023.

A Phased Approach to Effective Implementation

The Master Plan is divided into three distinct phases spanning four years, each with specific objectives and focus areas:

Phase 1 (within 1 year): This initial phase concentrates on creating strict and sustainable enforcement measures for the PDPA. The emphasis is on establishing standards, tools, and guidelines for data protection, covering both individual and regional authorities.

Phase 2 (within 2 years): The second phase aims to implement innovative methods to deepen the understanding of the PDPA. Key goals include assisting individuals in comprehending their rights under the PDPA, enabling them to protect themselves against personal data privacy invasions, and ensuring competence among public and private sector personnel in personal data protection processes. Additionally, this phase aims to raise awareness among data controllers and processors regarding the penalties associated with non-compliance.

Phase 3 (within 4 years): The final phase focuses on aligning Thailand’s personal data protection standards with international benchmarks. This includes fostering international operational cooperation, positioning Thailand as a mentor for personal data protection to other countries, and enhancing the country’s competitive ability in areas such as data privacy, personal data protection, and trusted data in the World Digital Competitiveness Ranking (WDCR).

Prioritized Industries for Compliance

While the Master Plan aims to uplift personal data protection standards across all sectors, Phases 1 and 2 prioritize compliance in seven critical industries: (1) Security and crucial government services, (2) Information technology and telecommunication, (3) Retail, wholesale, and online trade, (4) Finance, investment, and insurance, (5) Public health, (6) Tourism, and (7) Education.

Four Strategic Pillars

To achieve the goals outlined in the four-year plan, the Master Plan presents four strategic pillars:

  1. PDPA Effective and Balanced Enforcement: This strategy focuses on developing standards, criteria, rules, tools, indicators, and data privacy governance, as well as improving personal data protection laws to strengthen personal data protection and promote actions that enhance the country’s competitiveness under the PDPA.
  2. PDPA Knowledge and Trust Enhancement: This strategy emphasizes strengthening human resources by increasing knowledge, understanding, awareness, and confidence in keeping up with changes in personal data governance and threats. It includes enhancing personal data protection skills certification, public relations, prevention, and problem-solving models to accelerate awareness and readiness for PDPA enforcement.
  3. PDPA Digital Economy and Society Promotion: This strategy aims to strengthen cooperation within Thailand and internationally to motivate stakeholder participation in creating and promoting the digital economy and society, increase the country’s personal data protection capabilities, and build a sustainable network.
  4. PDPA R&D and Technology: This strategy focuses on developing a research ecosystem to incentivize and support research and invention creation related to privacy-enhancing technologies (PET), data privacy, and data security. It encourages researchers and entrepreneurs to develop innovations that utilize personal data securely and fairly without being hindered by legal restrictions, thereby boosting Thailand’s global competitiveness.

Thailand’s commitment to personal data protection, as outlined in the Master Plan, demonstrates the nation’s determination to establish a robust framework that safeguards individuals’ privacy rights while fostering a secure and thriving digital landscape. By implementing this comprehensive roadmap, Thailand is poised to become a leader in personal data protection, not only within its borders but also on the global stage.

Author: Panisa Suwanmatajarn, Managing Partner.

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BOI Launches New Measures to Boost Affordable Housing Investment

BOI Launches New Measures to Boost Affordable Housing Investment

The Board of Investment (BOI) has unveiled special new measures aimed at stimulating investment in residential housing projects priced at 1.5 million baht or less. This initiative is part of a collaborative effort with the Government Housing Bank to expand homeownership opportunities for low-income Thai families.

Under the new promotion, property developers can apply for BOI investment incentives to construct housing projects capped at 1.5 million baht per unit. The Government Housing Bank will evaluate and certify qualifying developers, who can then submit applications for BOI promotion by the end of 2025.

“Affordable housing is a national priority to ensure all Thai citizens can realize the dream of home ownership,” said BOI Secretary General. “These new measures provide tax incentives to developers to increase the supply of moderately priced housing stock.”

low angle photography of white and purple concrete building

To be eligible, residential projects must meet specific criteria set by the Government Housing Bank:

  • For condominiums, a usable area must be at least 24 sq.m. per unit
  • For townhouses/detached homes, the usable area must be at least 70 sq.m.
  • Projects must include amenities like parking, security, cleaning services, and common areas

Developers must first obtain construction permits and Government Housing Bank certification before applying to the BOI for promotion privileges.

Once approved, developers will receive corporate income tax exemption for 3 years capped at their total investment amount. Only construction costs for utilities, roads, and public amenities within the project qualify for the tax break.

aerial view of buildigns

“The high costs of land and construction make it very difficult for developers to profitably build housing below 1.5 million baht,” noted BOI Secretary General. “This incentive helps make those moderately-priced projects financially viable.”

The Government Housing Bank has already opened an online application portal at www.ghbank.co.th for developers seeking certification to apply for BOI promotion.

Both the BOI and Government Housing Bank see this joint investment promotion as critically enhancing residential options for lower-income Thai families striving for home ownership.

Author: Panisa Suwanmatajarn, Managing Partner.

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Supreme Court Ruling on Geographical Name for PHOENIX

Fact Summary

The plaintiff filed an application to register the word “PHOENIX” as a trademark. The defendant issued an order refusing registration, stating that the mark lacked distinctiveness and was ineligible for registration under Section 6 of the Trademark Act B.E. 2534 (1991), as “PHOENIX” is the name of the capital city of the state of Arizona, USA, and thus considered a geographical name under Section 7(2).

The plaintiff appealed to the Trademark Board, but the Board upheld the Registrar’s decision, ruling that “PHOENIX” is a geographical name lacking distinctiveness under Section 7(2) and the Ministry of Commerce Notification No. 5 (1992).

The plaintiff then filed a lawsuit against the defendants at the Central Intellectual Property and International Trade Court (Central IP&IT Court), seeking to revoke the Registrar’s order and the Board’s decision, and requesting the Registrar to proceed with registering the “PHOENIX” mark.

judge signing on the papers

Court Decision

The Central IP&IT Court ruled in favor of the plaintiff, revoking the Registrar’s order and the Trademark Board’s decision, and instructing the Registrar to proceed with registering the “PHOENIX” mark.

The defendants appealed to the Supreme Court.

Supreme Court Analysis

The Supreme Court examined the meaning of “PHOENIX” and noted that while it primarily refers to a mythical bird, it is also the name of the capital city of the state of Arizona, USA.

Concerning the Ministry of Commerce Notification No. 5 (1992), which defines geographical names ineligible for registration under Section 7(2), the Supreme Court observed that “PHOENIX” does not fall under item 4 (capital city of a country) but could potentially fall under item 5 (other geographical names known to the general public).

However, the Supreme Court found that the Registrar and the Trademark Board failed to consider whether “PHOENIX” is a geographical name known to the general Thai public, as required by item 5. This omission was a legal error.

The Supreme Court dismissed the defendants’ claims that “PHOENIX” is a well-known city name due to American football and NBA coverage, as these claims were unsubstantiated in the Registrar’s order and the Board’s decision.

court of united states in washington

Key Takeaways

  1. The Supreme Court upheld the lower court’s decision, ruling that the Registrar and the Trademark Board erred by not considering whether “PHOENIX” is a geographical name known to the general Thai public.
  2. Geographical names may be registrable as trademarks if they are not known to the general public, as per the Ministry of Commerce Notification.
  3. Trademark authorities must thoroughly examine and provide reasoning for their decisions, particularly when invoking exceptions or specific criteria.
  4. The ruling emphasizes the importance of a comprehensive and well-reasoned examination of trademark registrability, taking into account all relevant factors and criteria.

This landmark decision provides valuable guidance on the registration of geographical names as trademarks in Thailand, clarifying the applicable legal standards and underscoring the need for thorough examination by trademark authorities.

Author: Panisa Suwanmatajarn, Managing Partner.

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