Firms in a flap over fried chicken franchise
Firms in a flap over fried chicken franchise
By Sirikit Syah
SURABAYA (JP): Four companies are fighting for the right to
control the California Fried Chicken and Pizza Hut outlets here
in Indonesia's second largest city.
The battle over the right to sell California Fried Chicken
products is pitting PT Harapan Sejahtera Pioneerindo against its
former business partner PT Putra Sejahtera Pioneerindo. Sari
Melati Kencana, a license holder of Pizza Hut, is suing
Delcotama, its one-time business partner, for the right to sell
pizza.
The cases have provoked a number of questions and
uncertainties about how Indonesia's laws on intellectual property
rights, brand names and patents deal with such disputes.
The local government has suggested that the disputing parties
bring their civil case to court, though settlement, according to
the companies' lawyers, seems to be too far out of reach.
The conflicting parties reportedly have also asked the police
to intervene. PT Harapan filed a complaint with the police last
week against PT Putra, whom it accused of "misusing" the brand.
PT Putra claims that it is the rightful owner of the fried
chicken patent, which it says it registered with the government
last August. The company is demanding that rival Harapan not use
the brand name or the logo.
Pieter Talaway, PT Harapan's lawyer, said the police have
taken some peculiar items like plastic bags and packaging as
samples for their investigation. He denied reports that the
authorities have asked the company to suspend its activities.
PT Harapan has opened outlets in several major supermarkets.
The police have asked the company to take down the disputed
California Fried Chicken logo until a settlement is reached.
PT Harapan and PT Putra were partners in 1986 with a 10-year
partnership contract in the fried chicken business. But in 1992
PT Harapan bought all the shares and now only pays royalties for
using the California Fried Chicken brand name.
PT Putra recently accused PT Harapan of misusing the brand
name by selling other companies' pizza and cendol (doughy rice-
flour droplets used in cold drinks).
"If you franchise, it is not only the menu which must be
standard but also the decoration, furniture and employee
uniforms," says Rumaini Roni of the justice ministry's provincial
office.
PT Putra also claims that their partnership ended in August.
Roni says that PT Putra has the right to claim that it is the
rightful owner of the patent.
"PSP (Putra) would likely win the case in court because it
registered the brand first. PT Harapan could continue selling its
fried chicken under another name," she said.
In the Pizza Hut dispute, Sari Melati Kencana is suing its ex-
business partner Delcotama for unilaterally breaking their
partnership and misusing the brand name.
"Their new restaurants, such as Pizza Pasta, is totally
similar to Pizza Hut, except the name," says Faisal Tadjuddin,
Sari Melati Kencana's lawyer.
"Customers would not be able to tell the difference between
Pizza Hut and Pizza Pasta because the logo, color, interior
design, menu, pricing and dishes are the same."
Quoting Minister of Justice Oetojo Oesman, Faisal said that
the patent debate could set a bad precedent for international
businesses in Indonesia. International franchises might hesitate
to do business with Indonesian businesses, he said.
"Domestically, people are cheated for not knowing the
difference between the real and the fake," he says.
Rumaini predicted that similar cases are bound to happen in
the future.
"In the era of globalization and free trade, you can eat the
same food in 100 countries. What people need is an understanding
of business partnerships and the rules of the game," she said.