Brand name infringement and investor confidence<\/p>\n
Frans H. Winarta, Member, National Law Commission (KHN),
\nJakarta<\/p>\n
The Jakarta Post and Asian Wall Street Journal have recently
\nhighlighted intellectual property issues in Indonesia in articles
\nby Tom Wright entitled respectively: Supreme Court's Davidoff
\nruling offers hope to foreign brands and Indonesia ruling offers
\nhope to foreign brands.<\/p>\n
The local market here has been flooded by products such as
\nIntel jeans, Sony underwear and Rolex cigarettes. Indonesia has
\nindeed long been known as one of the worst offenders of
\nintellectual property rights in the Asian region by the high-
\njacking of well-known brand names. Many Indonesian companies have
\nused well-known logos and trademarks in order to sell a variety
\nof low-class products in large volumes, without the need to worry
\nabout being taken to court.<\/p>\n
However, a recent Supreme Court judgment has given hope and
\nsome optimism that the Indonesian government will be able to
\novercome the problem of high-jacking well-known brands -- a
\npractice that naturally has negative consequences for investor
\nconfidence.<\/p>\n
The pirating of well-known names reduces investor interest in
\nIndonesia because we are considered not serious in trying to
\nprotect the producers of well-known brand names. Legal
\nuncertainty appears to reign without adequate legal protection.<\/p>\n
Imperial Tobacco Group PLC, for instance, is postponing the
\nconstruction of a US$ 70 million factory pending the result of an
\nappeal by PT Sumatera Tobacco Trading against a judgment in favor
\nof the former. Imperial Tobacco will have to wait for the outcome
\nof this Supreme Court appeal before it can decide whether it is
\nsafe to invest or not.<\/p>\n
Actually, in the lead-up to next year's elections, the parties
\nshould be campaigning on rule of law issues that will naturally
\nattract voters' interest. Unfortunately, some of the biggest and
\nmost influential parties are not doing this and it is not clear
\nwhy.<\/p>\n
A party that is prepared to place rule of law, law enforcement
\nand legal certainty issues at the forefront of their political
\nplatform will surely attract public sympathy and this will
\nrepresent valuable long term political capital.<\/p>\n
What actually happens is that law enforcement gets politicized
\nin election campaigns, but without any political will to truly
\nfight corruption in a consistent manner. In the end, a campaign
\nthat lacks seriousness will be sure to fail as its true colors
\nwill soon become known to voters. Voters will realize that the
\nso-called campaign to eradicate corruption is only designed to
\nlast as long as the day of the election.<\/p>\n
What the pirates of well-known names are actually doing is
\ngetting a free ride out of the fame of brands that have sometimes
\nbeen registered for more than 100 years in other countries and
\npromoted over many years through costly advertising campaigns.
\nThose pirating the brands then register them for a different type
\nor class of product.<\/p>\n
The producers of the well-known brands will, of course, object
\nto the misuse and theft of their product. Consumers can not
\ndifferentiate between products produced by the real company
\nholding the brand name nor by the copyright infringer. Those
\npirating well-known consumer brands are making sales by getting a
\nfree ride atop famous registered trademarks without the long,
\ncostly promotion campaigns needed to achieve brand recognition.<\/p>\n
In other words, they are stealing from the outcomes of hard-
\nwork and creativity and the long-term investments of others.<\/p>\n
Another way of getting a free ride on well-known brands is by
\nregistering the logo or a picture of the brand as copyright and
\nthen, once registration is completed, trading in a particular
\nproduct by misusing the famous and well-recognized brand.<\/p>\n
This is because the law on intellectual property rights
\nrequires a trademark to be registered at the Directorate-General
\nfor Intellectual Property, whereas this is not compulsory for
\ncopyright on artwork, books, photography, music and the like.<\/p>\n
These infringements of intellectual property have already
\ncreated legal uncertainty and a decline in investor interest in
\nIndonesia. It is for this reason that firm action must be taken
\nand court decisions rendered. Only through legal certainty can we
\nencourage and promote investor confidence or the desire to once
\nagain invest in Indonesia.<\/p>",
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