Intellectual property or technology transfer? (Part 2)
By Jon Fernquest[Introduction]
[Thai pool manufacturer fights back + Reading Questions]
[Answers ]
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Today's article continues looking at the patent dispute between a French swimming pool manufacturer and their Thai partner. For the first part see:
Intellectual property or technology transfer? (Part 1)
Developing countries like Thailand allow foreign direct investment (FDI) for several reasons:
1. To create jobs and the income from jobs.
2. To generate income for Thai shareholders in the joint venture, both dividends and capital gains.
3. To help Thai companies gain experience in what could become future export industries.
4. To help employees develop work skills that will be valuable in Thailand's future development.
The competition is intense among developing countries to attract FDI to their country, so a country might have focus on only some of these objectives. Which ones are most important? How would you rank them?
Some argue that developing countries shouldn't have any barriers to FDI. Others argue that there should be a 100% barrier to all FDI and foreign involvement in a developing economy (compare Burma). Others suggest that a balance or middle path is the right way to go. What do you think?
Foreign companies with manufacturing operations in developing countries demand some intellectual property protection for their technologies.
On the other hand, local business partners expect to learn something about new technologies that they can put to practical use in future businesses.
What is the right balance between technology borrowing and technology protection?
Following a story over a long period of time
Often it is difficult to get the big picture of what's happening in a developing story over a long period of time.
Even if you read the newspaper everyday, it's often difficult to recall the history behind the story, what happened several months or years ago.
This series of articles will continue on into the future as new developments arise in this patent dispute story. It will help you follow the story, ask questions about it, and form a "big picture" of what implications the story has for Thailand's overall economic development.
Here are the questions from part I. Continue thinking about them as you read the articles:
1. Does it sound like the pools that JD Pools produces are substantially different from Desjoyaux pools? Why or why not?
2. Where should the line be drawn between intellectual property theft (patent violations) and legitimate use of what the company has learned during its partnership with a foreign company? (technology transfer)
3. What will the effect of this case on foreign direct investment be? Positive or negative? Is this important?
Would foreign companies thinking of making foreign direct investment in Thailand think twice about doing so if their intellectual property might be used without their permission by their local partner after their joint venture ends?
4. How long will it take for this legal case to be resolved? Which side will profit from any delays?
If the legal case will take many years, should JD Pools be allowed to continue in operation or should a temporary injunction stop them?
Article: Thai pool manufacturer fights back
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Questions (See answers at end):
1. What legal action is JD Pools taking? Who is it taking against? Why? 2. How much is JD Pools seeking in damages? 3. What was the motive for the police raid, according to JD Pools? 4. How does JD Pools claim that the DSI violated proper legal procedures in patent cases? 5. Is JD Pools statement about Thai law correct? Cite your sources for or against their interpretation. (Note: Some outside research is required here.) 6. Do you think that patent and copyright violations should be handed in a different fashion? Why? (Note: Given personal opinion backed with good reasons.) 7. What did the DSI seize? What was its value? 8. When was JD Pools established? 9. When did the joint venture manufacturing operation between JD Pools and Desjoyaux begin? 10. When did JD Pools stop importing pool components and start manufacturing them? 11. When did the joint venture end? 12. How did Desjoyaux run its business in Thailand after the joint venture ended? 13. How does JD Pool claim that its pool is different from the Desjoyaux model? How strong do you think this claim is? 14. When were JD Pools products seized? 15. Since JD Pools product was seized, what has the company done to remain in business? 16. How quickly did JD Pools design the new model? (Note: Use inference) 17. How many years has JD Pools been in the swimming pool business? 18. How many pools has JD Pools sold in THailand? 19. What new business is JD Pools planning to raise money for in the near future? 20. Where is JD Pools planning to raise the capital for future business expansion? 21. Is JD Pools listed on the Stock Exchange of Thailand? |
Pool producer fights for damages amid patent rights violation case
KANANA KATHARANGSIPORNThe Thai swimming-pool manufacturer JD Pools Group is preparing to sue the French pool company Desjoyaux Pools for around 100 million baht in damages in a patent rights dispute.
JD Pools said it would also sue Desjoyaux and the Department of Special Investigation (DSI) in connection with a raid on its warehouse in Phuket on Aug 18.
Tanusak Puengdej, JD's managing director, said the company and its lawyer were collecting information to pursue a legal case after the DSI and Desjoyaux seized 200 swimming-pool wall components and trucks from the warehouse.
"We deny all accusations of patent violation,'' he said yesterday. "The attempt initiated by Desjoyaux was a setup to damage our reputation and good image. We will continue to seek justice through legal procedures.''
He said the DSI had not properly looked into the matter before taking the action against JD Pools. In a case of copyright violation, seizing the suspected materials can be legally done but the practice is different in patent cases as the DSI must prove that the violation occurred before seizing the products.
"Moreover, for an examination of patent rights, only a few items should be seized, not all of them. What they did put a stop to our business'' he said.
The seized products worth three million baht could be assembled into as many as 30 pools worth a total of 15 million baht.
Mr Tanusak said JD Pools was set up in 1997 as a swimming pool manufacturer and an importer of pool components from Desjoyaux. In 2004 the pair ended their agreement and JD Pools started manufacturing its own pool components while Desjoyaux also started a manufacturing business in Thailand.
He said JD's pool-wall design had five different features from Desjoyaux's, but the production concept was similar.
"The difference is in the parts design for a pool wall. We do not copy or imitate Desjoyaux, we develop products ourselves and do not use Desjoyaux's brand name on the products.''
After its products were seized, the company spent 10 million baht to develop a new model in order to continue business.
"Since August 18, we have not received a call from the DSI asking us to provide a statement about the case,'' said Mr Tanusak, 43, who is also a residential developer in Phuket. "The court will identify whether our product is copied or not.''
Currently, JD Pools has five branches in Phuket, Samui, Pattaya and Bangkok. It plans to expand to 10 branches nationwide within this year.
During the first half of the year, JD Pools recorded sales of 200 million baht and aims to achieve 400 million baht by the end of the year, up from 350 million baht in 2005.
During its almost 10 years in the pool-manufacturing business, JD has sold 2,500 pools in Thailand. As pools have a 10-year guarantee, the company plans to raise funds on the Stock Exchange of Thailand to have sufficient capital to provide after-sale services to customers.
Answer Key:
1. What legal action is JD Pools taking? Who is it taking against? Why?
JD Pools is going to sue its former French partner Desjoyaux Pools and the Thai police (DSI), because they seized swimming pool wall components and trucks from their warehouse. JD Pools claims the DSI didn't follow correct procedure for patent cases.
2. How much is JD Pools seeking in damages?
100 million baht.
3. What was the motive for the police raid, according to JD Pools?
The raid was an attempt by Desjoyaux to damage their "reputation and good image."
4. How does JD Pools claim that the DSI violated proper legal procedures in patent cases?
JD Pools claims that:
a. In patent cases "the DSI must prove that the violation occurred before seizing the products."
b. In patent cases "only a few items should be seized, not all of them"
5. Is the JD Pools statement about Thai law correct? Cite your sources for or against their interpretation.
(Note: Some outside legal research is required here.)
6. Do you think that patent and copyright violations should be handed in a different fashion? Why?
What is different about them?
(Note: Give your personal opinion backed with good reasons.)
7. What did the DSI seize? What was its value?
The DSI seized the parts of 30 pools. They were worth three million baht.
8. When was JD Pools established?
In 1997.
9. When did the joint venture manufacturing operation between JD Pools and Desjoyaux begin?
The article does not say, but it could not have been in 1997 because the 1999 article included in Part I here was before Desjoyaux selected a partner for the joint venture.
10. When did JD Pools stop importing pool components and start manufacturing them?
The article does not say, but using inference it must have been after 1999, because the joint venture manufacturing operation must have started after 1999.
11. When did the joint venture end?
It ended in 2004.
12. How did Desjoyaux run its business in Thailand after the joint venture ended?
Desjoyaux started its own swimming pool manufacturing operations in Thailand.
13. How does JD Pool claim that its pool is different from the Desjoyaux model?
How strong does this claim seem to be?
The design of the pool wall has "five different features from Desjoyaux's."
Does having five different, mean it's not an imitation?
Would this depend on what the features are?
14. When were JD Pools products seized?
(Hint: Look for the date on the previous article)
15. Since JD Pools product was seized, what has the company done to remain in business?
JD Pools has designed a new model of swimming pool, investing 10 million baht in the new design.
16. How quickly did JD Pools design the new model? (Note: Use inference)
10 days.
That's what's implied by the statement made by JD Pools, but this seems unreasonably fast, so it might be a mistake. The article reporting the raid was published on the 20th of this month. Yesterday's article, reporting the development of a new product in the interval, was written on the 30th.
17. How many years has JD Pools been in the swimming pool business?
Roughly 10 years.
18. How many pools has JD Pools sold in Thailand?
2,500 pools.
19. What new business is JD Pools planning to raise money for in the near future?
After-sales services for customers that have already bought pools.
20. Where is JD Pools planning to raise the capital for future business expansion?
On the Stock Exchange of Thailand (SET).
21. Is JD Pools listed on the Stock Exchange of Thailand?
(Note: Requires some outside research)
