What should a Merchandising Licence Agreement include under Thai law?

1. Definitions and Interpretation
2. Grant of Licence
3. Registration of the Trademark Licence
4. Approvals
5. Quality, Safety and Manufacturing
6. Launch and Marketing
7. Royalties, Advance and Minimum Guarantee
8. Reports, Records and Audit
9. Taxes
10. Ownership and New Artwork
11. AI and Digital Use
12. Infringement and Counterfeits
13. Warranties
14. Indemnities and Liability
15. Insurance
16. Termination
17. Consequences of Termination or Expiry
18. Confidentiality and Personal Data
19. Notices
20. Governing Law and Disputes
21. General

• No stamp duty is payable. A merchandising licence is not listed in the Stamp Duty Schedule of the Thai Revenue Code. A power of attorney used to sign or to file with the Registrar carries 10 THB or 30 THB.
• Royalties, the advance and Minimum Guarantee payments are royalties for Thai tax purposes. A Thai company or juristic person that pays them to a company carrying on business in Thailand normally withholds 3% and issues a withholding tax certificate (Clause 9.2).
• If the Licensor is an individual or is abroad, different withholding rules apply and a double tax treaty may reduce the rate, and a Thai Licensee paying abroad may have to self-assess Thai VAT (Form P.P.36). Ask an accountant before the first payment, especially because you ticked gross-up, so the Licensee bears the withholding tax on top of the royalties.

• A licence to use a trademark registered in Thailand must be made in writing and registered with the Registrar of Trademarks (Trademark Act B.E. 2534 (1991) section 68). Without registration, the licence of the trademark does not take effect.
• The Licensee must file within 30 days after signing (Clause 3.2), and must not use the registered names or logos until the Registrar accepts the licence. The artwork itself, protected by copyright, may be used from the Start Date.
• Only goods within the trademark's registered classes can be covered. If a product category in Schedule 2 falls outside them, the Licensor should apply to register the mark for that class.
• When the Agreement ends, both Parties ask the Registrar to cancel the registration (Clause 3.3).

• Submit concept, pre-production sample, production sample and all marketing for approval (Clause 4.1). The Licensor must answer within … Business Days with specific reasons; silence after a reminder counts as approval (Clause 4.2).
• Keep every approval email or system record with the product code. It is your defence if the Licensor later objects, and the Licensor's evidence if an unapproved product appears.
• Approval covers only the use of the characters and artwork. Product safety remains the Licensee's responsibility (Clause 13.3).

• Toys, children's products, electrical goods and food contact items often need mandatory Thai standards certification or other approvals before sale, and Thai-language labels (Clause 5.1).
• Under the Unsafe Products Liability Act B.E. 2551 (2008), a person whose name or mark appears on a product in a way that suggests it is the manufacturer is treated as an operator and is liable to injured consumers together with the manufacturer. The Licensee's indemnity (Clause 14.2) and product liability insurance (Clause 15) decide who finally pays between the Parties.

• Designs that the Licensee creates from the characters belong to the Licensor (Clause 10.2). A transfer of copyright must be in writing and signed by both sides (Copyright Act B.E. 2537 (1994) section 17), so this signed Agreement is the transfer. The Licensee must also get written transfers from its own designers — an employee owns copyright in work made for the employer unless agreed in writing (section 9).
• Do not use generative AI to create new character images without written approval (Clause 11.1).

• Quarterly statements and royalties are due within 30 days after each quarter (Clause 8.1), and any shortfall against the Minimum Guarantee within 30 days after each Contract Year (Clause 7.3).
• Launch every category within … months, or the Licensor may remove it (Clause 6.2).

• Thai competition law prohibits unfair practices that harm other businesses (Trade Competition Act B.E. 2560 (2017) section 57), with fines of up to 10% of turnover (section 82). This form lets the Licensee set its own prices and sell online to customers in the Territory (Clause 2.3). Avoid adding fixed resale prices or bans on all online sales.

• Send a stock statement within 15 days; the Licensor may buy stock at cost (Clause 17.1). Otherwise, if the Agreement expired or the Licensee terminated for the Licensor's breach, the stock may be sold for … days (Clause 17.2). Then stop all use and hand over or destroy moulds and files (Clause 17.3).

• A company should sign through the director or directors authorised in its latest company affidavit or, for a foreign company, the equivalent document from its home country. Clause 21.7 allows electronic signatures, but the Registrar may require originals for the trademark licence registration.
• Copyright and trademark disputes, and counterfeiting cases, are heard by the Central Intellectual Property and International Trade Court. A Party relying on this English Agreement must file a Thai translation certified as accurate.

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-E62546. If you reuse this content, please credit the author and link to the original.