Thailand: New U.S. Law Affects Users of Unlicensed or Pirated IT

Manufacturers whose products are sold, or offered for sale, in Washington State should be aware of a new unfair competition law in that state. The new law, which went into effect on 22 July 2011, imposes civil liability on manufacturers who use IT that is either stolen or misappropriated. Proceedings can be brought by competing manufacturers or the Washington State Attorney General if such IT is used in the manufacture, distribution, marketing or sale of products sold or offered for sale in the state. This may become a growing trend in the U.S., as a similar law has already been passed in Louisiana. Other states are likely to follow.

The new laws seek to level the playing field so that users of illegal or unauthorized IT will no longer enjoy the competitive advantage of being able to use such IT for free, thus competing unfairly against competitors in the marketplace who choose to use only legal and legitimate IT to conduct their business. Moreover, those manufacturers who elect to use stolen IT run the risk of having to pay damages, having their goods seized, and possibly losing access to desirable U.S. markets.

The laws are intended to ensure that there is a respect for property rights, while also providing a compliance procedure that is easy for all stakeholders to implement.

How the Law Works

Under the Washington State law, a competing manufacturer, whether it resides in the U.S. or a foreign country, can bring the action having to prove that it:

  • Manufactures products sold in the state in direct competition with the products claimed to have been created using stolen or misappropriated IT.
  • Did not manufacture its products using stolen or misappropriated IT.
  • Suffered economic harm, established by showing a retail price of stolen IT of at least USD 20,000.

The law goes even further. Not only are manufacturers liable for suit, but so are third parties, such as retailers or distributors, who offer goods produced with stolen IT. After a successful action against the manufacturer, a plaintiff may bring an action against third parties that, among other criteria, have a direct contractual relationship with the manufacturer that uses unauthorized IT. Such an action may be brought if the third party was not subject to the original proceedings, if the manufacturer has no attachable assets to satisfy the judgment, or if certain other criteria are fulfilled. Plaintiffs are not required to have any minimum contacts in the state in order to commence actions under the Washington State law.

Before an action can commence, IT owners are first required to have written to the potential defendant setting out details of the allegation particular enough to allow the potential defendant to respond. The potential defendant will have 90 days to respond to the IT owner's letter. A further 90-day period may be granted if the manufacturer demonstrates that it needs more time for the legalization process. Defendants who fail to stop using stolen IT after the commencement of the court action may be subject to court injunctions preventing the sale of their goods in the state, or the plaintiff could be awarded either the actual damages suffered or statutory damages not exceeding the retail price of the IT, whichever is greater. Willful infringers run the risk of having damages tripled.

There are several limitations, however. Actions may not be brought against manufacturers who produce food, beverages, and medical products regulated by the U.S. FDA. Companies cannot be sued if their end products are protected by copyright law, such as books, movies, and music. Promotional products related to copyrightable works and theme parks are also excluded from the law.

What the Law Calls For

Because these new U.S. state laws apply to any manufacturers of goods sold in those states and any customers (such as retailers or distributors) they have within those jurisdictions, even manufacturers with no legal presence in the U.S. should examine these new laws closely and should monitor those state legislatures which are considering similar laws. Most businesses have IT management systems in place already, but with the promulgation and likely additional laws intended to disadvantage users of stolen IT, now may be a good time to conduct internal audits on their business units and supply chains globally to ensure internal policies and procedures are being followed and to determine whether additional safeguards need to be implemented. Manufacturers around the world are now going to have increase their IT management vigilance.

The benefits of using legal and legitimate IT are clear—compliance with legal IT can be a competitive differentiator in the global marketplace. Successful global companies are increasingly focused on implementing high standards of legal and ethical compliance throughout their supply chains and in their relationships with other businesses. Organizations that are able to certify their use of legal IT will enhance their global reputation, safeguard their business and have a distinct competitive advantage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions