Thai Law Insights

Madrid Protocol and Thailand - Economic Blessing or Dollars Down the Drain?

Supanut Saenewong Na Ayudtaya

The Madrid Protocol is a treaty aimed at improving the international registration of trademarks. The Madrid Protocol and Madrid Agreement is known collectively as the Madrid System (Madrid system for the international registration of marks). Under the Madrid Protocol, parties may register trademarks and receive protection in up to 97 other member countries (22 July 2016). The Madrid System is administrated by the International Bureau under the World Intellectual Property Organization. Once a country joins the Madrid Union the International Bureau will open an office attached to the respective country's trademark department to act as a representative.

The benefits that the Madrid Protocol affords parties registering trademarks and trademark right holders are further expanded upon as follows:

1. The Madrid Protocol makes it more convenient for parties to register trademarks as only one filing is required; costs are also lowered as the registration can be done in the original country of the filing party.
2. The party registering the trademark will know whether the trademark application is approved or denied within 18 months of the filing date.
3. Trademark holders may renew their registration in various member countries. Trademark holders can also perform other acts such as the transfer or extinguishing of trademark rights in either selected member countries or the original filing country.
4. Trademark holders and applicants are able to file additional information related to their trademark in various member countries.
5. The Madrid System allows for the reduction of costs associated with filing for trademarks in multiple countries. There is no need to send a representative abroad to file for registration, and consequently no extra document, translation, or administrative fees.

If Thailand becomes party to the Madrid System all of the benefits listed above will come into effect and the process of applying for international trademarks becomes much less complicated. Furthermore, all forms and registrations are either in English, French, or Spanish; this consistency and convenience lends benefits for both foreigners and Thai nationals registering trademarks.

The adoption of the Madrid System is also beneficial to the economy of Thailand as a whole. Once Thailand becomes party to the Madrid System, small business operators will have less hoops to jump through and expend fewer resources in order to register trademarks. These freed up resources can be used to invest and expand the economy. Furthermore, increased convenience means foreign business operators have more incentive to invest in Thailand; this may potentially raise foreign investment and increase confidence in the Thai economy.

However, there may be certain drawbacks associated with Thailand becoming party to the Madrid System. The first drawback is the relative lack of benefits Thai nationals may receive. There are already a substantial number of foreign business operators in Thailand; if running a business becomes even more convenient due to the Madrid System then the possible influx of foreigners may create competition for Thai owned businesses. If this occurs then foreigners may reap more benefits from the Madrid System than Thai nationals would. The second drawback is that initial expenditures required to becoming party to the Madrid Systems are quite high. Employees knowledgeable in international trademark law and possess the necessary English, French, and Spanish expertise are in short supply; costs associated with recruiting, training, and retaining these skilled individuals will be high.

After analysing the possible effects Thailand may face by becoming party to the Madrid System, it is not yet clear whether Thailand and business operators will benefit. Both Thai and foreign business operators alike will have to expend less resources in registering and protecting their trademarks internationally potentially leading to an increase in foreign investment. On the other hand, in order to meet international standards, Thailand's Department of Intellectual Property and Ministry of Commerce will have to rapidly develop and hire the necessary people qualified to manage and staff this new department. These costly improvements may not be achievable in the time frame set (Thailand plans to join by the end of 2016) and will be funded by taxpayer money.