RI to lose $4b in Davidoff trademark debacle
RI to lose $4b in Davidoff trademark debacle
The Jakarta Post
Jakarta
German cigarette company Reemtsma Cigarettenfabriken GmbH told
the Indonesian government on Tuesday that the country would lose
US$4 billion in tax revenues and more than 60,000 jobs over an
ongoing court dispute invovling the Davidoff trademark.
"Thousands of jobs and millions of dollars in investment are
at stake at a time when President Megawati (Soekarnoputri)
declares 2003 as the "Year of Investment," said Reemtsma lawyer
Gunawan Suryomurcito in a statement made available to The Jakarta
Post
The statement said Reemtsma, which had been willing to commit
a significant investment in Indonesia, was prevented from doing
so because a local company, NV Sumatra Tobacco Trading Company,
previously registered the Davidoff brand name.
The company claimed that the government stands to lose $4
billion in potential excise and sales taxes on Davidoff
cigarettes over the next ten years if this trademark dispute
scuttles their $70 million investment plan in a new cigarette
plant here.
The planned joint venture would also have created 200 factory
jobs, and work for 60,000 tobacco planters, Reemtsma claimed.
"This case has captured the attention of the media, public and
international diplomatic communities and is likely to become a
benchmark of companies facing similar situations," said Jim van
Drunen Littel, director of business development for Reemtsma.
Jim added that the issue had significant implications for
Indonesia's business climate as well as the confidence of
potential foreign investors.
Last week Reemtsma appealed the case to Indonesia's Supreme
Court after losing its right to use the Davidoff name in two of
the country's commercial courts.
Reemtsma signed an agreement in November 2001 with Indonesia's
leading cigarette producer PT Gudang Garam to jointly produce
Davidoff brand cigarettes for the Southeast Asian market, but its
venture has been stalled by a legal dispute over the ownership of
the Davidoff brand.
Indonesian firm NV Sumatra Tobacco Trading Company, has
already registered the name Davidoff as its own with the
Trademark Registry of Indonesia.
Sumatra Tobacco is an Indonesian cigarette trading company
that has allegedly registered hundreds of cigarette trademarks
domestically.
Reemtsma, which purchased the license to manufacture Davidoff
cigarettes worldwide in 1984, did not realize its famous brand
had already been registered in Indonesia until April 2002 and has
refused to pay Sumatra Tobacco for the right to use its own brand
name.