Foreign investors aren't deterred by Burma's haphazard trademark system

Foreign investors aren't deterred by Burma's haphazard trademark system

On Tuesday, the newly formed Licensing Association of Thailand (LAT) wrapped up its inaugural meeting in Bangkok, where intellectual property (IP) professionals discussed some of the challenges faced by companies seeking to license their patents, trademarks, and copyrights in Southeast Asia.

A key sponsor of the event was Tilleke & Gibbins, a law firm that opened its first office in Bangkok in 1890 and recently opened an office in Rangoon. After the LAT meeting, DVB spoke with Michael Ramirez, a senior consultant at Tilleke & Gibbins, who now spends most of his time at the firm’s office in Rangoon. Mr. Ramirez indicated that while Burma’s lack of a robust IP legal regime is a major issue for foreign companies seeking to invest in the country, it’s not necessarily the most important factor driving investment decisions.

“Serious investors; that is, those investors who are viewing Myanmar [Burma] as a long-term investment, are not dissuaded by the lack of a fully developed IP regime. It’s certainly an issue—it’s an issue that needs to be addressed – but it is not the determining factor for most of our clients in making that decision to enter the marketplace. Those broader decisions tend to be made based on a number of different inputs,” said Ramirez.

Currently, Burma does not have laws that recognise foreign patents or trademarks, and it’s not party to international treaties which obligate signatories to protect patents or trademarks registered in other signatory countries. Burma also lacks a single, comprehensive trademark law, so trademarks in the country are protected by a hodgepodge of laws, some of which date back to the colonial era.

This mix of various laws has created a unique trademark system whereby anyone can obtain a degree of protection over any trademark by either using the mark in trade or filing a “declaration of ownership”. Filing such a declaration is the equivalent of registering a trademark in other countries, and filing a “declaration of ownership” is considered as Burma’s way of “registering” a trademark. In Burma, however, trademark “registration” does not provide the same protection as trademark registration does in other counties.

One distinct feature of Burma’s trademark “registration” system is that multiple people can actually file a “declaration of ownership” for the same trademark. As a consequence, anyone can obtain a degree of ownership over famous brands such as “KFC,” simply by filing a “declaration of ownership”.

Moreover, prior use of a trademark trumps any rights obtained by filing a “declaration of ownership”. Thus, foreign trademark owners who think they can protect their trademark simply by filing a “declaration of ownership” without actually doing business—perhaps because they want to do market research first or wait until investment conditions are more suitable—can still lose out to local players who are using the brand in their business.

This might explain why Burma had its own version of Walmart and a fast-food company called “ICFC”. Burma’s “ICFC” sold the same products and had a logo similar to the original KFC, which recently decided to enter Burma—a decision which, in part, might have been made to protect its trademark in the country.

As Ramirez puts it: “A first user can complicate or muddy the waters” for a foreign trademark owner, whose only remedy is to file a lawsuit. This is because Burma’s lack of a specific trademark law means that there aren’t any special trademark infringement procedures available to fast-track an original trademark owner’s claim against alleged infringers. Instead, original trademark owners must use Burma’s uncertain and slow-moving judicial system.

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Upon signing the World Trade Organization’s TRIPs agreement, Burma became obligated to modify its haphazard trademark regime by enacting a single, comprehensive trademark law that comports with a body of international standards that has developed over the years and now constitutes a uniform legal framework, often referred to as international trademark law.

Until Burma adopts a new trademark law, however, more than one person can declare ownership over the same trademark—so even if a foreign company tries to beat erstwhile trademark bandits by quickly filing a “declaration of ownership”, another person can use that foreign company’s trademark.

Two Tilleke & Gibbins trademark experts who helped organize the LAT meeting, Alan Adcock and Darani Vachanavuttivong, told DVB that until a new trademark law is passed, they typically advise companies to file a “declaration of ownership” in Burma as soon as possible if they’re interested in entering the market at some point. Otherwise, they run the risk of being sued by a person who has already used or registered the trademark.

Yet despite Burma’s efforts to obtain help drafting a new trademark law from international IP associations (e.g. WIPO and INTA) and a series of pronouncements that a new trademark law would soon be passed, the law still hasn’t made it through parliament.

Currently, the draft version of Burma’s new trademark law provides a mechanism by which a “declaration of ownership” can be converted into a trademark certificate similar to those issued in other countries with “regular” trademark registration systems—but only if the trademark owner asks the trademark office to examine and issue a proper trademark certificate within three years of the date upon which the law becomes effective.

During their interview with DVB, Adcock and Vachanavuttivong said that foreign companies can potentially strengthen their claim to a certain trademark if a dispute arises by publishing a “cautionary notice” in a daily newspaper to notify the public of the company’s trademark rights. Publishing such a notice is advised in order to further inform the public that a trademark has been declared as owned, and that any unauthorized use of that trademark could amount to infringement.

Adcock and Vachanavuttivong also made sure to emphasise that if a dispute arises over the ownership of a trademark, foreign companies can file lawsuits in Burmese courts and actually have a good chance of winning.

The problem with resorting to litigation, however, is that court cases in Burma can be very lengthy and the outcome can be uncertain—not to mention the fact that even if a judgment is obtained it might be difficult to enforce. Ramirez explains that foreign investors usually aren’t willing to bear these risks, so they often wind up settling with alleged infringers instead of going to court.

“The reality is [that Burma’s] judicial system is uncertain and it’s very lengthy—not unlike Thailand, where it can take a great length of time before you get a final judgement after exhausting all levels of appeal—so you end up having someone who wants to enter the market, wants to clean up the issues with regard to possible infringement, and get moving. That usually means you have to engage the other entity and maybe even work out a settlement,” said Ramirez.

“Just because you don’t happen to be first in Myanmar doesn’t mean you are devoid of the opportunity to try to prove that you are indeed the brand owner. Of course, it can be complicated [to obtain a judgement from a Burmese court], and often times this results in legitimate brand owners having to deal with illegitimate users by purchasing rights or otherwise settling disputes— sometimes by licensing.”

On a positive note, Ramirez underscored that given the government’s desire to attract foreign investment, trademark infringement will become “less and less common, because it isn’t good for international investment [for the government or judicial system] to support this kind of illicit use of brands”.

At the moment, however, it seems that foreign investors are still willing to enter Burma’s potentially lucrative market despite the lack of a comprehensive trademark regime—particularly Asian investors from countries such as Thailand, which still hasn’t given up its dream of accessing the Bay of Bengal by developing the long-delayed Dawei special economic zone and deep sea port.

Although critics have said that Dawei only stands to benefit Thailand, one Thai banker who spoke with DVB on the condition of anonymity insisted the project will benefit all three countries involved—Burma, Japan and Thailand—and that it’s only a matter of time before a syndicated loan is arranged to finance the ambitious project.

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