Imperial Tobacco unit wins right to Davidoff in court battle
Imperial Tobacco unit wins right to Davidoff in court battle
Tom Wright, Dow Jones, Jakarta
The Supreme Court has ruled in favor of U.K.-based Imperial
Tobacco Group PLC in a battle with a local company over the right
to sell cigarettes under the Davidoff trademark in the country,
lawyers said on Tuesday.
The Supreme Court overruled an earlier decision by the
Commercial Court that PT Sumatra Tobacco Trading, an Indonesian
company, had the right to sell products under the Davidoff brand
locally, according to Gunawan Suryomurcito, Reemtsma's counsel.
The ruling by the Supreme Court, which was made July 8, should
pave the way for Imperial's German unit, Reemtsma
Cigarettenfabriken, to begin marketing Davidoff branded products
in Indonesia, and may assure other foreign investors that the
country is moving toward tighter rules over trademark rights.
While trademark piracy exists throughout Asia, Indonesia ranks
high among countries in which international brands are produced
and sold illegally, deterring fresh foreign investment.
"The ruling sends a positive message to potential investors
that their legal and intellectual property rights will be upheld
in Indonesia," Suryomurcito said.
Reemtsma has been trying to win back its trademark so that it
can begin selling Davidoff cigarettes in Indonesia and other
Southeast Asian nations under a 2001 joint venture with PT Gudang
Garam, the country's largest tobacco company. Reemtsma wants to
invest US$70 million in a new factory in Indonesia, a crucial
investment at a time when other companies are shunning the
country.
But the company's attempts to get the right to Davidoff has
until now faced hurdles in Indonesia's legal system, which often
favors local companies.
The Commercial Court in February upheld Sumatra Tobacco's
right to the brand in two separate verdicts. The court rejected
Reemtsma's claim that the company, which is based in the north of
Sumatra island, bought the Davidoff trademark in Indonesia
fraudulently from a Brazilian businessman.
The court also struck down an effort to strip Sumatra Tobacco
of its rights because it is producing only minute quantities of
Davidoff cigarettes, and isn't actively using the trademark as
required by Indonesian law.
The Supreme Court overturned both those rulings, according to
Reemtsma's lawyers. The court wasn't immediately available to
confirm the ruling.