Tips on protecting trademarks

Tips on protecting trademarks

By James B. Lumenta

JAKARTA (JP): The Trademark Law has undergone significant
changes in the last few years in a bid to catch up with
international standards of protection, particularly with the
requirements of the Trade-Related Aspects of Intellectual
Property Rights (TRIPs) Agreement.

Some main features of the new system introduced by the
recently concluded draft legislation toward year 2000 could be
outlined as follows:

* the purely "first-to-file" principle shall remain a
prerequisite for establishing trademark rights;

* more relaxed formalities and relatively shorter time frame
in the process of trademark prosecution, -- it would only take 14
months to have a trademark registered, if there was no opposition
from a third party;

* registration of a trademark license with the Directorate
General of Intellectual Property (DGIP) is mandatory;

* all civil proceedings in relation to trademark cancellation,
invalidation and infringement actions shall be subject to the
jurisdiction of a commercial court, instead of the current
general district court (except in the case of criminal
counterfeit actions), and with a faster process to conclusion
through a specified period of time provided under the
specifically established judicial procedure;

* adoption of unprecedented alternative dispute resolution
system, such as by arbitration for a more professional and
speedier settlement of trademark disputes, will be possible,

* stricter penalties, including a maximum seven-year jail term
and a maximum Rp 300 million fine for trademark counterfeiting.

While on paper it all sounds pretty good, in practice things
could work out to be far beyond our expectations. Since
enforcement has always been the most crucial issue in this
country, special monitoring is an absolute need. And to secure an
optimum protection for your trademarks, this article seeks to
provide some recommendations on measures of crucial importance to
be taken by a trademark proprietor.

In Indonesia, unlike the United States and other common law
countries, registration is a prerequisite to the establishment of
rights of a mark. Therefore, businesses should file an
application for trademark registration as early as possible
before introducing a product or service here.

Registration is critical not only in establishing rights, but
also in protecting and enforcing such rights against any third
parties and other unscrupulous traders who may attempt to
register the mark as theirs and use the mark, or one closely
resembling it, on identical or even related products and
services. Under no circumstances could one initiate any legal
action against someone infringing on the mark, unless there was a
valid registration or at least a pending application of the mark
in question.

Under the prevailing system, there is special treatment and
wider protection for well-known marks, though the criteria
remains unclear and has given rise to much controversy. Neither
is there any distinction between "famous" and "well-known" marks
in Indonesia as recognized in many other countries.

Nevertheless, one could establish a well-known status for a
mark in Indonesia by simply getting the mark recorded with the
trademark office, following an application submitted along with
the supporting documents, as pointed out below:

* an authenticated or legalized copy of the registration
certificate of the corresponding mark one has deposited for a
minimum three years in at least three other countries outside of
Indonesia;

* certifying documentary evidence that the mark is still in
use in Indonesia and overseas;

* a statement issued by one's embassy in Indonesia or the
Indonesian embassy in one's own country certifying that the mark
is well-known.

Such a record is entirely different from "defensive trademark
registration", which is generally recognized in other countries,
such as Japan. Defensive recordal is simply an administrative
record for limited use within the jurisdiction of the trademark
office per se. It is referred to as "defensive" since it serves
as an alternative for the mark to being qualified for broader
protection in the absence of clear criteria to determine whether
a trademark is well-known.

The benefit of having the defensive recordal is that it may be
used by the registry (the trademark office) as reference to
reject unauthorized applications, and thus to prevent any other
parties, without the owner's consent, from at least registering
or renewing identical or a similar mark, even for goods or
services which are not identical or similar to those of the
trademark. As often as not, such references do also have -- to a
certain extent -- some influence upon decisions handed down by
the judiciary, despite the facts that inconsistency among the
judges was sometimes unavoidable.

Another issue of no less importance is the maintenance of the
registered mark through proper use. Failure to use the trademark
in commerce for three consecutive years from the registration
date or the date of last use, or use of the mark in relation to
goods or services which are not consistent with those for which
the trademark is registered, would lead to the registration being
vulnerable to deletion for "nonuse".

While notice of trademark registration in the form of a
registration symbol is not mandatory under Indonesian law, use of
such a symbol does have a deterrent effect on other parties who
might otherwise adopt a confusingly similar mark. Above all,
businesses should make sure that use of the mark on goods or
services must be exactly the same as that shown on the
registration certificate, otherwise they risk losing their right
to the mark!

All trademark licenses must be validly recorded with the DGIP.
What would be the legal consequences if a trademark license
agreement is not recorded?

Under the current legislation, unregistered licenses shall
remain valid and binding upon the parties to the agreement on
contractual basis as provided under the general provisions of
contracts under Article 1338 of the Civil Code.

Things appear to be quiet different and somewhat tougher under
the new system as introduced by the latest draft legislation and
if it is passed into law, the consequences of an unregistered
license would be deemed null and void; it would not have any
legal effect upon the contracting parties, let alone all other
third parties! In this case, therefore, if infringement occurs,
neither the licenser nor the licensee is entitled to take any
legal action against the alleged infringer.

Worse yet, such an unrecorded license mark would be vulnerable
to attack by third parties for nonuse, since use by the licensee
here does not inure to the benefits of the licenser.

As prohibited by the current law, the draft statute rules that
all license agreements "shall not contain clauses which might
either directly or indirectly be prejudicial to the Indonesian
economy or might otherwise hinder the potentialities of the
Indonesian people for acquisition and development of technology
in general".

In other words, clauses deemed to be harmful to the country's
national economic interest or to the process of technology
transfer must be avoided from trademark license arrangements, in
that it is one of the main prerequisites for the government
approval of a license to be recorded.

Unfortunately, both the present and the draft laws do not make
any further reference to what specific acts may be considered as
falling within the category of being "prejudicial" to the
national economy or "hindering" locals from technology
acquisition. It seems to be based on subjective interpretations
by referring to the common standards of fair business practices.

Also worth noting is that a trademark license, under the
legislation, is an exclusive license for the whole territory of
the Republic of Indonesia, and the validity of which shall not
exceed the term of protection of the registered mark in question.
This implies that at no time could an unregistered mark be the
subject of a license under the Indonesian law. Should it happen,
such a license would be considered void ab initio.

The writer is the chief executive partner of Amroos &
Partners, a senior intellectual property law firm in the country.