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.