Thailand has recently adopted new legislation on product liability. The Unsafe Goods Liability Act, which will come into effect in February 2009, was designed to protect consumers who incur damage from defective products by imposing strict liability on those involved in the production and sale of the products.
From the perspective of an IP owner who may be manufacturing, selling, importing, or licensing technologies or trade marks to others to produce, import, or sell a product which may cause harm to consumers, the risk of liability is considerable and cannot be ignored. Any local licensees, distributors, retailers, or even component or ingredient producers involved in the chain of production and distribution could also potentially face liability. Under the strict liability rule, a business operator will be held liable if the product is "defective" or "unsafe" within the meaning of the Act, regardless of whether the operator was negligent in making or selling the product. Hence, a business operator could be held liable even if reasonable care was exercised.
The new law refers to three types of product defects: manufacturing defects; design defects; and warning defects (failure to warn). It is sufficient for an injured consumer to prove that he or she was injured by the business operator's defective product while using the product in the way it was intended to be used. Moreover, product liability cannot be waived or limited by way of contract, or by any limitation of liability statement given by a business operator.
Considering the broad scope of application and the enhanced damages provided by the Act, IP owners, manufacturers, and sellers should take necessary precautions to protect themselves against potential claims of liability. Understanding what the Act entails is of utmost importance. Measures should be taken to review and reevaluate the product designs, quality control processes, warning labels, and standard form contracts used among the business operators involved.
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| Siraprapha K Rungpry |
Tilleke & Gibbins International Ltd
Supalai Grand Tower, 26th Floor
1011 Rama 3 Road, Chongnonsi, Yannawa
Bangkok 10120
Thailand
Tel: +66 2653 5555
Fax: +66 2653 5678
bangkok@tillekeandgibbins.com
www.tillekeandgibbins.com
