Online counterfeiters halted in Thailand

Thailand, like many other countries, has experienced an increase in the number of online vendors of unauthorized goods within its territory. However, a series of successful raids against a sophisticated counterfeiting operation has demonstrated that the machinery and willingness to trace and prosecute online IP infringers exists in Thailand.

The raids were conducted against a syndicate of non-Thai nationals who were operating a coordinated counterfeiting operation vending sports and leisure products via a number of websites, including 'designershirts.net', 'hotf1.com', 'kitshirts.com', 'team-shirt.com' and 'tshirtbymail.com'. The get-up of the websites was such that many purchasers would have been unaware that they were buying counterfeit goods. It is thought that the counterfeiters may have registered the domain names and hosted the websites outside Thailand so as to avoid detection.

Approximately 15 of some of the world's leading sports and leisure brands (including Adidas, Ferrari, Levi Strauss, Puma, Reebok and Timberland) coordinated their efforts in order to bring about a successful sting operation. After initial trap purchases and subsequent examinations of the goods confirmed that the products were counterfeit, an intensive investigation lasting around eight months was launched. The investigation was conducted in conjunction with the Royal Thai Police and private investigators. It entailed such activities as the interception and surveillance of telephone calls, and identification, tracing and monitoring of suspect bank accounts.

As a result of the evidence gathered during the investigation, a number of search warrants were obtained and executed over a period of three days by police at five separate private homes in Pattaya in the south of Thailand. Each home represented a location from where the online counterfeiting operation was being managed by four UK nationals and their Thai spouses together with an Ukranian national. The raid was the first search and seizure operation to be conducted in Thailand against an organization selling counterfeit clothing online and yielded numerous counterfeit goods, in addition to various computer records, orders and bank details. It also revealed the counterfeiters' high level of technical sophistication.

The success of the raids has led to the arrest of the individuals involved for trademark infringement. As well as these charges, the brand owners involved have also sought to initiate criminal actions based on tax and illegal business offences under Thai law. Importantly, due to the perceived seriousness of online counterfeiting activities and the potential damage to brand owners that such activities can cause, charges under the Thai Anti-Money Laundering Act are also likely. This legislation was recently amended to bring various IP offences within its remit; a development that could result in asset seizure and confiscation for the infringers in the present case.

A great deal of work lies ahead, however. Despite the success of detecting and enforcing against the online offenders in the case at hand, it is anticipated that counterfeiters in Thailand will increasingly look to the Internet as a means of avoiding detection.

Isabella Ho and Edward A Madden, Tilleke & Gibbins International Ltd, Bangkok