First to use prevails over first to file in trademark battle

In Thai Roller Chain Industrial Partnership v Wichian (Case 2644/2548, published September 16 2005), the Supreme Court of Thailand has dismissed an opposition filed by the original registrant of the mark DAI against the attempt by the first user of the mark to register it in its name.

Thai Roller Chain Industrial Partnership (TRC) is a well established and reputable Thai manufacturer of motorcycle roller chains. TRC has been the owner of the registered trademark DAIICHI since 1971. It uses that mark on the chains' packaging but stamps the unregistered mark DAI on each joint of the chains. The chains are distributed throughout Thailand to Japanese motorcycle manufacturers.

In 1985 one of TRC's local distributors, Wichian Wattanakulchai, registered the mark DAI for automotive chains without informing TRC. However, the mark was removed from the register in 1995 when Wichian neglected to renew the registration. Wichian subsequently filed another application for the same mark.

At the same time, another distributor applied to register the mark DAi (in which the 'I' was in lower case). Upon hearing of this application, TRC contacted the applicant, who agreed to assign the rights in the pending application to TRC.

However, Wichian then filed an opposition to TRC's application, claiming he had earlier rights in the mark DAI or DAi since he was first to file an application in 1985. TRC's attempt to find an amicable solution with Wichian failed.

The registrar upheld Wichian's opposition. He considered that TRC did not have a better right (ie, priority right) to the DAI mark because, under Thai law, the first to file rather than the first to use generally enjoys a better right to a mark. TRC appealed to the Board of Trademarks, which affirmed the registrar's decision. Neither decision was surprising as both the registrar and the board tend to apply the first to file rule strictly, without looking at any claim of bad-faith application.

TRC further appealed to the Intellectual Property and International Trade (IP & IT) Court, which is generally more liberal than the Board of Trademarks. The court allows a de novo trial and takes into account all the circumstances surrounding the parties' claims of right to the application in dispute.

Here, the IP & IT Court accepted evidence that TRC had indeed used the DAI mark before Wichian first registered it. However, the court noted that TRC had neglected to file an application for DAI. The court reasoned that since TRC registered DAIICHI but not DAI or DAi, there was an implied waiver of any claim of right to the DAI mark. Accordingly, the court dismissed TRC's appeal.

On appeal to the Supreme Court, TRC argued that it had used DAI as a trademark in good faith since 1970. TRC also highlighted the investment made in the mark and the goodwill that the mark had accrued through use. TRC urged the court to recognize that Wichian had acted in bad faith when he filed an application to register the mark DAI in 1985, in full knowledge that TRC started using the mark on its chain joints years before Wichian had any involvement with TRC.

The Supreme Court reversed the Board of Trademarks' decision. It ruled that TRC's good-faith extensive prior use of the mark trumped the generally applicable first to file rule. Therefore, TRC's better right to the DAI mark was sufficiently established to (i) allow the application to register the mark DAi to proceed to registration, and (ii) remove Wichian's application for the mark DAI from the register.

This case shows that it is best to be the first to file in Thailand. Delay in applying for trademarks in Thailand carries risks. Since it is inexpensive to file, brand owners are encouraged to include Thailand as a territory in which to file whenever a brand with potentially global or regional appeal is rolled out. In a typical trademark hijacking case, the mark owner has two options: negotiate with the opposite party to assign voluntarily its mark or take legal action through the Trademark Office procedures or the IP & IT Court. Either option may be expensive and time consuming.

Edward J Kelly, Srila Thongklang and Suebsiri Taweepon, Tilleke & Gibbins International Ltd, Bangkok