How local brands beat foreign namesakes in Indonesia’s courts

Local players take advantage of loopholes in trademark law and different requirements in every region to use global brand names.

Yohana Belinda

Yohana Belinda

The Jakarta Post


This undated illustration picture shows a gavel in a courtroom.(Pexels/Sora Shimazaki)

July 14, 2023

JAKARTA – In Indonesia, there is IKEA, and then there is IKEA. The popular Swedish furniture retailer lost its trademark to an East Java-based rattan furniture maker, PT Ratania Khatulistiwa.

The latter registered its IKEA trademark in December 2013. According to The Guardian, the Supreme Court stated that the Swedish company, which had registered its trademark in Indonesia in 2010, had not actively utilized it for commercial purposes in three consecutive years, which allowed for its protection to expire under Indonesian trademark law.

Ratania Khatulistiwa uses the name IKEA as an acronym for Intan Khatulistiwa Esa Abadi, one of its product lines.

In another case, confectionery maker Delfi, which sells chocolate products in several Asian markets, lost a lawsuit over its Cha-Cha line to a local snack maker owned by Mayora, which sells a product of the same name, Detik reported.

How do local players use global brand names and expand their operations to several countries?

Quick answer: by taking advantage of loopholes in trademark law and different requirements in every region.

Too general

Jakarta-based legal practitioner Jekrinius Hasiholan Sirait, who specializes in intellectual property, said there was a variety of reasons why foreign businesses “lost” complaint cases they had filed in Indonesia, one being that brands could not trademark names that were “too general”.

Jekrinius made a name for himself when he assisted PT Manggala Putra Perkasa (MPP) in a dispute against Italian fashion house Prada in 2017, as Kontan reported, and when assisting local mosquito repellant maker PUMA & Kucing Melompat against German sportswear maker PUMA in April 2023, as Detik reported.

“Take the example of Cha-Cha, it’s a kind of dance from Cuba. And the word “Cha-Cha” has also been registered as the personal name of an Indonesian for decades,” Jekrinius said.

“Much the same goes for Prada, as the word “prada” is also found in Indonesia as part of batik prada.” MPP was not immediately available for comment.

The timing of a brand’s registration is also crucial. If a brand has held the registered rights to its name for a considerable period, suing it for infringing on another brand’s copyright becomes challenging.

Jekrinius added that, if the trademark has been registered for more than five years, the grounds for a lawsuit would likewise expire, unless it can be demonstrated that the Indonesian brand owner has “poor ethics” The notion of poor ethics also includes failure to pay taxes. He explained that, in the case of PUMA & Kucing Melompat, the trademark had been registered since 1990, never violating any Indonesian regulations, which would improve its position during the proceedings.

“Brand examiners themselves are subjective, and views could differ between one examiner and another. The first judge and the second judge in my case were also different [in their assessments],” he explained.

Michael Wijaya, a Surabaya-based legal practitioner, explained that local brand holders stood a better chance of winning cases when they operate in a different market to the plaintiff, as was the case in Puma & Kucing Melompat versus PUMA.

“Their line of business is also different. It could be possible that in Germany, they don’t know about trademark protection in Indonesia,” Michael said.

“Brand registration in Indonesia can be multi-class, as in this case of PUMA, where the insect repellent is clearly not shoes, so if […] there is no [other] PUMA brand in the shoe category, they should still be acceptable; no need to sue the mosquito repellent [company].”

PUMA & Kucing Melompat declined to comment.

First to register

Agung Indriyanto, a brand examination coordinator, explained that Law No. 20/2016 regulates branding and geographic indications and affords traditional and nontraditional brand protection. In trademark law, images, logos, names, words and letters are considered traditional branding elements, while color arrangements, three-dimensional shapes, sounds and holograms are nontraditional elements.

The law amends Law No. 15 of 2001 on trademarks to expedite the trademark registration procedure. The announcement stage, previously conducted after the substantive examination, is now carried out beforehand, with the aim that the substantive examination be carried out simultaneously with the examination of objections.

In some cases, Agung said, Indonesians could use existing brands due to being the first to register, and because of territorial trademark protection in Indonesia.

“The two principles can be ruled out if the actual owner of the brand can actively prove that the applicants of the emulator or imitator brand has acted in bad faith. Moreover, the limitation of [access to] information, especially before the digital era, can allow [for Indonesians to use names resembling foreign brands],” Agung explained.

According to the World Intellectual Property Organization (WIPO), trademark protection can be obtained at the national level by submitting the registration application and payment to either the national or regional trademark office. At the international level, business owners have two options: filing a trademark application in each country where they desire protection or using the WIPO’s Madrid System.

The Madrid System is considered a simple and cost-effective method of registering and administering trademarks internationally. Filing a single international trademark application and paying a single set of fees is obligatory when seeking protection in up to 130 countries, including Indonesia. Modifying, renewing or increasing a company’s global trademark portfolio can be done by using a single, centralized system.

While it is relatively uncommon for identical brands and services to coexist, businesses should be aware of the risks posed.

In coexistence agreements, business players must protect their respective trademarks and agree on the criteria under which they can coexist in the market.

Furthermore, WIPO urges business stakeholders to be conscious of competition and antitrust regulations, and that courts may conclude that their confusingly identical trademarks for similar items harm market competition.

In the meantime, however, given that trademark loopholes are still around, there is only so much brands can do once they register their name.

“When a brand attempts to use its name in Indonesia, law enforcement serves as the key to establishing a brand. A business owner can object to a trademark issue if their brand is being used without their consent. If the business is already registered, the trademark owner may initiate a cancellation case,” Agung said.

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