Narong Seafood stung by suit

Thai exporters are being warned of possible penalties from using illegal software after Massachusetts fined a family-owned Thai seafood company over unfair trade practices.

Published: 23/10/2012 at 12:00 AM
Writer: Charoen Kittikanya

"It is a must for Thai exporters to observe the new US Unfair Competition Act [UCA] banning imports of commodities produced with the use of illegally secured information technology [IT]," said Wiramrudee Mokkhavesa, an attorney at Tilleke & Gibbins International. "Some 39 US states have passed or are preparing to pass UCAs with beefed-up provisions specifically to combat IT piracy."

The laws seek to punish foreign companies that enjoy an unfair cost advantage over American businesses because they use unlicensed software, with the harshest penalties including fines and a ban from exporting to the US market.

Massachusetts, Louisiana and Washington already have UCAs specifically directed at piracy. Some European countries are considering similar laws.

Thai lawyers are urging Thai exporters to ensure their software is legal. Even if the software the companies use has nothing to do with the products or services they sell, they could still be investigated and charged.

The 30-year-old Narong Seafood Company Ltd is one of the first "victims" of the new regulation. "There are several other cases pending against Thai firms for violating the UCA," said Ms Wiramrudee.

Earlier this year the US state of Massachusetts alleged Narong was unfairly selling and delivering products into the state by illegally using pirated software without paying the appropriate licensing fees. Microsoft reported Narong's illegal use of its copyrighted software to the Massachusetts Attorney General's office after wrapping up its own suit against the Thai firm.

Arthon Piboonthanapatana, assistant managing director of Narong Seafood, said the company last week agreed to pay $10,000 to resolve the allegations. Under the terms of the agreement with the state of Massachusetts, Narong Seafood also agreed to no longer use unlicensed software programmes in connection with the manufacturing or production of goods entering Massachusetts.

"We agreed that the company might have overlooked some software licensing, but we completed a thorough software auditing process to ensure compliance with both Thai and international intellectual property laws," he said. "Since Massachusetts first contacted us, we immediately took steps to ensure licensing compliance and prevent the possibility of interruption to our business."

Mr Arthon feels the settlement gives the company a competitive edge over competitors from other countries where piracy is rampant.

The US market accounts for up to 70 per cent of the company's two billion baht in exports, which Mr Arthon said he still believes will remain stable despite the legal dispute.

Narong Seafood has two modern factories in Samut Sakhon and Hat Yai, processing shrimp, fish, squid and cuttlefish. Major markets include the US, Japan, Europe, Australia and New Zealand.

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Discussion 1 : 31/10/2012 at 04:28 PM: The real point here is the trend of the US and the EU to enact new laws that allow either US or EU authorities or - and this is what makes a difference - private parties to effectively penalize foreign companies that use illegal software. The fine is small, but the law can also be used to block the importation of goods where the company is using illegal software. That would probably put this Thai company out of business. And that sofware doesn't have to be used in the production of a good; it could be used by the company's accounting or marketing department. And its not just illegal software. Expect similiar laws addressing corruption, etc.
Discussion 2 : 23/10/2012 at 12:42 PM: Nothing will change the whole country would fall apart if you took away the Graft, Piracy,and Sex industry all that would be left is Rice.
Discussion 3 : 23/10/2012 at 12:07 PM: I wonder what the yanks would say if other countries had their own version of "UCA" to use against american companies that can buy software at a much cheaper price than local companies. For instance, microsoft, Apple and Adobe charge up to twice as much for their software when sold in Australia compared to in USA ...even when it is downloaded from the internet. Does n't this give American companies an Unfair Competition advantage ?
Discussion 4 : 23/10/2012 at 11:53 AM: "The laws seek to punish foreign companies that enjoy an unfair cost advantage over American businesses because they use unlicensed software." That means virtually every company in the PRC will be hit.
Discussion 5 : 23/10/2012 at 11:32 AM: - The solution is quite simple - USE OPEN-SOURCE SOFTWARE. It's often more secure and better than proprietary software.
Discussion 6 : 23/10/2012 at 10:45 AM: Piracy will stay here in Thailand.The fight against it is a joke.I try to buy origional software but sometimes that is just about impossible.Antivrusprograms usually only have websited that are in THai so registering the software must first be done by phone and then the company must send me an email English.It usually takes me 2-3 days each time.Evene after I tell them each time they never change their webpages.ZEER Rangsit must have close to a thousand small shops or stalls selling pirategoods and both Police,monks and govermentofficals go there every day and buy copies.No one cares.
Discussion 7 : 23/10/2012 at 09:34 AM: So Thaipolice shall check it, with their pirate copies ! Thai banks transfer the money for the deals, on their pirated software. I not think you can find an office in Thailand that not have some sort of pirated software ! So far i had only seen pirated Windows Explore at police stations, i had also seen it in 2 banks.
Discussion 8 : 23/10/2012 at 09:25 AM: 'Narong Seafood also agreed to no longer use unlicensed software programmes in connection with the manufacturing or production of goods entering Massachusetts' - I'm reading only Massachusetts from that statement. Now they'll need 2 pc's each. One for Mass and another for the rest of the world.
Discussion 9 : 23/10/2012 at 09:00 AM: @whatajoke: The cost advantage is a lot more than 1,000 USD for 10 PCs. If you have a small network with 10 PCs and you use original Microsoft Server, Firewall, Windows and Office you pay nearly 10,000 USD just for the basic software. If you want to use something like AutoCAD you can easily spend 5,000 USD for the software of a single PC. And I guess the Seafood company has a lot more than 10 PCs.
Discussion 10 : 23/10/2012 at 08:56 AM: Since Windows Internet Explorers are like Swiss cheese and a security risk, in some cases re-installation of the operating is the last resort to get a system running again. We develop software and here again sometimes what we develop is not compatible with the hidden source code Microsoft sells. So re-installation of the software is required from time to time to get a clean system. Try several times to re-install for the above reasons and Microsoft will ignore your plea for a validation code even if your software is genuine. Try to take Microsoft to court for lousy software that invites viruses and male software – no chance since when buyin
Discussion 11 : 23/10/2012 at 08:25 AM: Windows OS can be a pain for businesses, I bought a legal copy of Windows, installed it, but then I had to format the hard disk a couple of months later, however Windows wouldn't allow me to re install on the same PC because it had already been installed! Calls to MS regional office in Singapore didn't solve the problem, I then bought a copy version. A total waste of time. Since then I've been using Ubuntu Linux - it has everything that the majority of users needs, without the headache.
Discussion 12 : 23/10/2012 at 07:35 AM: @ricardofel #1: When I read the article I get the impression that the company really only overlooked a small part of illegal software. Otherwise it is unlikely that a company of that size (two billion baht in exports) would only pay 10,000 USD. Some software licensing is easy like you need a Windows license for each PC which runs it. But other licenses are sometimes complicate where software is only free for private use; some can be used in virtual machines without an extra license, some not, some only x times. Then there is OEM software with special conditions, and and and. it’s complicated!
Discussion 13 : 23/10/2012 at 07:27 AM: Software piracy is so typical for Thailand. I visited Pantip Plaza the first time in 1994 and I saw some pirated software. Since then I visited it often and there is more and more pirated software – since 20 years in the same place. What does this tell us about Thai law enforcement? If anybody in Thailand would be serious about this then it should be possible to shut down one place within 20 years, don’t you think?
Discussion 14 : 23/10/2012 at 07:25 AM: Petty. The cost advantage from not spending $1,000 on software for a dozen office computers is negligible. That's abuse of courts in international trade, this should be resolved through pressure on local police to make inspections and fines.
Discussion 15 : 23/10/2012 at 06:50 AM: "the company might have overlooked some software licensing", yeah right. They got caught with their pants down & slip in a little lie to make it seem they didn't really know...when in fact they knew exactly what they were doing!

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