Improved product liability and intellectual property legislations enhance the competitiveness of medical tourism in Thailand

A brand name is to medical tourism what a geographical indication is to agro-tourism.

A brand name is to medical tourism what a geographical indication is to agro-tourism. The Medical Tourism Association defines medical tourism as when people who live in one country travel to another country to receive medical, dental or surgical care while at the same time receiving care equal to or better than the care they would have in their own country, and are traveling for medical care because of affordability, better access to care or a higher level of quality of care.

Thailand is one of the countries which is heavily counting on medical tourism to help drive economic growth. This provides additional incentive to respect intellectual property, consumer and patient protection norms in order to bolster the image of the country in the eyes of the pharmaceutical industry and prospective medical tourists.

1. Selection and registration of trade marks

Pharmaceutical trade marks are not treated differently from trade marks of other industries. A medicinal product brand can be registered as a trade mark according to the Trade Mark Act 1991, as amended by the Trade Mark Act 2000 (Trade Mark Act). In addition to conventional or trademarks, the scope of protection extends to combinations of colours and shape of goods. To be registrable, a trademark must distinctive; not be forbidden by the Trademark Act; and not be identical or confusingly similar to other prior registered trademarks.

There are limitations to trade marks which can be registered in Thailand in particular:-

  • The Registrar's practice of treating all products in Class 5, which includes pharmaceuticals, as similar. Thus, the industry will continue to face the problem of veterinary and a wide range of other substances being treated as similar to human preparations; - the importance of public safety in relation to assessing similarity of pharmaceutical trade marks.
  • The Thai Trade Mark Office has a strict approach to itemization of the classification of trade mark. For example, it is not sufficient to apply for “vaccines” in class 5, one must specify the use of those vaccines e.g. “vaccines for human use in the treatment of influenza”.
  • The Registrar is inconsistent when considering the similarity between conflicting marks and the registability of slogans:

               - Confusingly similar marks

  • DUPHACYCLINE v DUMOCYCLINE (Decision No. 48/2542)
  • RABIKA v ROBICA (Decision No. 4/2546)
  • FLUCOZOLE v FUCOZONE (Decision No. 775/2545)

               - Not confusingly similar marks

  • CITROLE v SECTROL (Decision No. 24/42)
  • REGINOX v UGINOX (Decision No. 679/2542)
  • ANTAROX v INTEROX (Decision No. 58/2542)

               - The marks listed below were found to be common general descriptions which were therefore considered non-distinctive.

                        ·      BREAK THE BREAKOUT CYCLE, I.C. 5. Decision No. 670/2545

                       ·      BETTER FOOD, BETTER WORLD, I.C. 1, 5, 31 and 42. Decision Nos. 336-902545: this mark was found both descriptive and non-distinctive

               - The marks listed below have been accepted for registration

                       ·      WE KEEP OUR PROMISES (App. No. 448803, I.C. 5)

  • The Registrar extensively require trade mark applicants to disclaim exclusive rights to use any non–distinctive parts in not always a consistent manner:

       - Names of colours which have been accepted without disclaimer/objection

  • App. No. 449650 – Trade mark GOLDER CORN
  • App. No. 412913 – Trade mark GOLD LINE
  • App. No. 488342 – Trade mark GREEN CAST

       - Names of colours which have been accepted with disclaimer

  • App. No. 364461 – Trade mark GREENJOY
  • App. No. 506237 – Trade mark GOLDEN BEAR
  • App. No. 496869 – Trade mark GOLDEN ELEPHANT
  • App. No. 498480 – Trade mark BLACK TURTLE
  • The assignment of registered associated marks as a whole. Some associated marks to be selected for separate transfer is not possible. In the latest draft amendments to the Trade Mark Act there is a possibility for separate transfer with a restriction on the method or scope of use of such marks or other conditions that the registrar deems appropriate.
  •   When applying for a trade mark registration in Thailand, as long as there is no likelihood of confusion with the International Non-Propriety Name (INN), the trade mark should be acceptable to registration and would still be subject to other prior third party rights and requirement of distinctiveness.
  • Single colour marks are not allowed, but combinations are allowed. Shape of goods or marks depicting containers remain extremely difficult to obtain, but not impossible, as long as there is strong evidence of acquired distinctiveness and the mark is not descriptive of the goods (e.g. if the three dimensional mark is packaging in the shape of the tablet):-

       - Rejected trade mark due to lack of characters which will enable the public to         distinguish the products from those of other traders:-

  • A product container for goods in I.C. 3 (cosmetics, lotions, bathing preparations, etc.) Decision No. 149/2545 App. No. 430996 TM:
  • A product container for chemical preparations I.C. 5. Decision No. 151/2545 App. No. 428539 TM:

       - Rejected trade mark because it is descriptive to the goods applied for:

  • A toothbrush device for toothbrushes in I.C. 21. Decision No. 157/2545 App. No. 430592 TM:
  • It should be noted that The Thai Food and Drug Administration (FDA) requires that companies obtain approval of their proposed new trade mark and product before allowing the drug to be imported, marketed and sold in Thailand. They do this by obtaining a license from the Drug Control Division of the Food & Drug Administration (FDA).  The pharmaceutical industry must guard with particular care against revocation for non-use, given the delay between registration of a pharmaceutical trade mark and its use.

2. Parallel imports

2.1 Patent products

The principle of parallel import of patented products such as drugs was first introduced by Patent Act (No. 3) B.E. 2542 (A.D. 1999). The use, sale, having in possession for sale, offering for sale or importation of a patented product shall not constitute a patent infringement when the product has been produced or sold with the authorization or consent of the patent holder. (Section 36, paragraph two, (7)).

2.2 unpatented products

There is no provision in the Trademark Act on parallel imports. Under Section 44 of this Act, the owner of a trade mark has the “exclusive right to use its mark for the goods for which it is registered”. In 2000, the Supreme Court of Thailand (Dika Court decision no. 2817/2543) interpreted the above Section by applying the principle of international exhaustion of right and allowing the importation and resale in Thailand, without the consent of the trade mark holder, of a branded product that has been legally marketed by the trade mark holder in the exporting country.

3. Advertising and liabilities

3.1 advertising

The advertisement of medicinal products is regulated by several legislations including the Drug Act B.E. 2510 (1987), The Medical Device Act A.D. 1988 and The Consumer Protection Act. The Food and Drug Administration (FDA) and the Consumer Protection Board are responsible for enforcing these legislations.

Advertisements through any means, including audio-visual transmission, must be approved by the FDA before actually being disseminated. The advertisements of prescription or pharmacy dispensed medicines are permitted only to professionals but prohibited to the general public. Drugs in the household remedy category may be advertised directly to the general public but they are subject to FDA review and approval before dissemination.

The Drug Act requires that drug advertisements shall:

  • Not boast that a medicine can miraculously or absolutely treat, cure, or prevent disease or illness.
  • Not exaggerate or falsely declare properties of the medicine.
  • Not cause to be understood that it has a substance as its chief or component ingredient which it does not have, or has in less than the quantity caused to be understood.
  • Not cause to be understood that it is an abortifacient or a strong emmenagogue.
  • Not cause to be understood that it is an aphrodisiac or a birth control drug.
  • Not advertise specially controlled drugs or dangerous drugs.
  • Contain no certification or endorsement of its therapeutic properties by any other person.
  • Should not show its therapeutic properties as being capable of curing, mitigating, treating, or preventing diseases or symptoms of them as notified by the Minister of Public Health under Section 77 of the Drug Act.

 Furthermore, according to the FDA Internal Rules of 2002 adverts shall:

  • Not be contrary to traditions.
  • Not persuade patients to consume the product more than necessary or create a misunderstanding that the product should be used regularly.
  • Not make a comparison to defame other products
  • Not cause a misunderstanding to consumers that the drug is equivalent to other products such as food or cosmetics.
  • Not encourage acts or activities contrary to law.
  • Meet FDA information requirements (for example, drug name, ingredients, and manufacturing source).

Drug manufacturers whose advertisements violate the Drug Act are liable for imprisonment for a term not exceeding 6 months and a fine not exceeding Thai Baht 10,000 (about USD 285).

The label and the size of the packaging are mandatory documents to obtain FDA marketing approval.

3.2 Product liability laws

The Thai legal system, which, unlike in the West, has weaker tort statutes, making malpractice

suits by foreigners against doctors or/and hospitals in Thailand more difficult and

defendants less likely to prevail. In February 2009, Thailand's "Liability for Damages Arising from Unsafe Products Act" came into effect. Drug and device manufacturers selling products in Thailand need to be aware of the changes in the legal system.

The Unsafe Products Act states that a consumer has only to demonstrate that they were harmed by the normal use or storage of a product to be able to collect damages. Also, anyone involved in the sale or import of the product is jointly liable for damages, including the manufacturer and distributor. If they are found guilty of gross negligence or marketing unsafe products while aware of their danger, responsible parties may be ordered to pay punitive damages in addition to compensation for physical and mental damage. A contract or waiver signed before damages occur does not limit the liability of the manufacturer or distributor.

In order to be found not guilty, the manufacturer and/or distributor must prove that: a) the product was not unsafe; b) the damaged party was aware that the product was unsafe, yet used it regardless; or c) the damage was a result of inappropriate product use or storage, clearly counter to the labelling or packaging instructions.

Contract manufacturers are not liable for damages if they can prove that the flaw was in the design and they were unaware of its danger. Similarly, the manufacturer of the product components is not liable if they can prove that the flaw was in the design or assembly, not in the manufacture of the components themselves. In the pharmaceutical context, the following persons can be liable if the product is found defective and has resulted in damage to a consumer: Drug manufacturers, including contract manufacturers and ingredient producers. Local importers and distributors. Hospitals, clinics, and drug stores which sell the drugs.

Consumers have 3 years to sue after they learn of the damages and of the parties responsible, not exceeding 10 years after the product manufacture date.

In conjunction with the Consumer Case Procedure (CCP) enacted in August 2008, in Thailand's new legal system, consumers have only to demonstrate that they suffered damages from the unsafe product. Consumers do not need to establish that the manufacturer or importer was at fault, so the burden of proof lies on the manufacturer to demonstrate that their product was not unsafe.

Under the Medical Device Act B.E. 2551 medical device manufacturers and importers must describe their facility and equipment used for manufacturing, including details on quality control measures and storage facilities. These include medical device registration requirements for contact lenses and HIV test kits. Thailand's Ministry of Public Health is drafting additional laws. These include regulations on dental equipment, physical therapy equipment, in-vitro diagnostic kits, labels and inserts, and advertising.

4) Anti-counterfeiting and enforcement

According to Thailand’s FDA, almost $30 million worth of counterfeit drugs are sold in the country each year. The most common fake drugs are those indicated for treating AIDS, bird flu, malaria, tuberculosis, anti-obesity, and erectile dysfunction. It is difficult to confirm the accuracy of the FDA’s figures, WHO estimates that counterfeit drugs make up more than 25 percent of the medical market in developing countries. Surveys conducted by private investigators in Thailand against pharmacies located Bangkok, Pattaya and Phuket reveal a very high rate of fake drugs especially erectile dysfunction related drugs. Furthermore, Thai based online traders of fake drugs have dramatically increased in number over the last three years.

The relevant legislations include:

  • Trade Mark Act 1991 as amended in 2000
  • The Patent Act
  • The Drug act B.E 2530, A.D. 1987
  • The Medical Device Act A.D. 1988
  • The Cosmetic Act B.E. 2535, A.D. 1992

In addition to legislations, Thailand has introduced on February 14, 2009 initiatives to strengthen the cooperation between various enforcement authorities to prevent and suppress counterfeit drugs. Unfortunately, the Food & Drug Administration (FDA) which has the authority to investigate and take measures against counterfeiters of drugs did not sign the MOU.

The FDA is planning to increase fines on importers, sellers, and manufacturers of fake drugs:

 

 

Current law

Proposed amendment

Manufacturer of fake drug

50,000 THB (approx. USD 1,500) and/or life imprisonment

5 million THB (approx. USD 150, 500) and/or life imprisonment

Importer / seller of fake drug

 10,000 THB (approx. USD 300) and/or 20 years imprisonment

2 million THB (approx. USD 60,000) and/or 20 years imprisonment

5) Generic substitution

When a physician prescribes a brand name drug product, but authorizes the pharmacist to substitute a generically equivalent product the potential exists for confusion in labeling.

Whereas the name of the drug product in the medical record and on the physician's prescription will be that of the brand name prescribed, the name of the drug product on the label affixed to the patient's container will be that of the generic name.

Generic substitution is not in itself regarded as a trade mark infringement in Thailand because there isn’t any unlawful reproduction or use of a registered mark. It could however be argued that the substitution of a generically equivalent drug could amount to passing-off if it is committed in a deceitful manner so as to deceive a patient as to the source of origin, nature, quality of such drug.

Legal issues will also arise under the Drug Act if the pharmacist sells a substandard drug, under the Drugs Act or, in the future, under the Unsafe Product Liability Act.

6) Online issues

Further to investigations carried out against an online trader advertising counterfeit Viagra on a popular Thai web site http://plaza.212cafe.com/ a quantity of 38,850 counterfeit Viagra pills were seized on September 30, 2008. The counterfeiters, an incorporated Thai company and his director confessed that all counterfeit drugs had been imported from China. The estimated lost for the counterfeiter was estimated by the Royal Thai Police to 17 millions Thai Baht or approximately 485,000 USD.

This case is a clear example that online traders are not always small scale counterfeiters. The growth of online drug sales, counterfeiters' increasing technologic skill, and a false sense of security in countries with stringent regulatory measures are among the factors that are enabling the spread of this criminal activity.

7) Conclusion

Stronger consumer protection legislation, proposed amendments to the Drug Act conveying stronger penalties against counterfeiters of drugs and better controlled advertising, sell and storage of drugs and medical devices is a game plan proposed by the Thai authorities to improve its image towards the pharmaceutical industry and to build up a solid medical tourism.  The recent of the US Government decision to remain Thailand on the Priority Watch List is a strong indication that more efforts are required from the Thai authorities to address intellectual property concerns of various industries including the pharmaceutical industry.