Indonesia's New Trademark Law is Challenging to Brand Owners

By Nethani Palmani | Feb 21, 2017 09:49 AM EST

Given the increasing awareness of the importance of intellectual property (IP) in today's digital economy, the government of Indonesia has passed new pieces of legislation for copyright, patent, and most recently trademark protection over the last two years. However, much of these changes in the law unfortunately retains some of the flaws from the previous law, which may perpetuate or even worsen the recurring issues of bad-faith registrations and trademark squatting for brand owners.

First and foremost, the previous Indonesian trademark laws contain no clear guidelines on the protection of well-known brands for dissimilar goods and services. This was passed on to a separate government regulation that was never issued and ended up with a gap that has led to some inconsistent court decisions involving trademark disputes in the past, according to World Trademark Review.

The new government regulation will still require certain conditions to be met before it is implemented. It will be the key guideline in governing matters related to bad-faith registration based on similarities to registered trademarks or well-known trademarks, for the protection of these brands.

Another problematic provision is the law concerning mark removal due to non-use. The 2016 trademark law mainly rehashes the provisions of the old law, stating that "removal of mark from the marks registry may be done if a mark has not been used for three consecutive years in commerce since the date of registration or last use." The vague provision may cause further uncertainties and precarious legal threats against brand owners.

Jakarta Post reported that the 2016 law also allows new applications for generic names derived from "genericized" registered marks, provided that the applicant adds a distinguishing element to it. This might attract unprotected new applications over names derived from famous brands perceived as generic, which would require owners to defend their trademarks and oppose any offending application.

With the remaining regulatory gap and new potential challenges for trademark owners who are subjected to the new law, protecting trademarks in Indonesia remains a challenging affair. In this light, brand owners need to work on extra measures to cover their IP asset protection and management system in Indonesia in order to keep their trademark legally healthy.

More Sections