Sunday, October 13, 2019

New Indonesian rules on foreign language trademarks cause confusion

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An uncertain issue under Law 24/2009 has been the mandatory use of Indonesian language in certain contexts. A new Presidential Regulation 63/2019 provides more specificity setting out 14 situations where it is required. One of them surprisingly, is trademarks.  Surprisingly, because this is not a trademark regulation. But the effects for Indonesian businesses and brands may be huge. 

The Regulation says it is mandatory to use Indonesian language for trademarks owned by Indonesian individuals or entities. There is an exception for foreign licensed trademarks (but then these are not owned by Indonesian entities anyway) and an exception for trademarks with historical, cultural, customary and/or religious values in traditional or foreign languages (whatever that means).

This is a classic example of a probably well meaning idea by one part of government, applied to an area they are not familiar, which could cause chaos. Here are some well known Indonesian foreign language trademarks which are now at risk:

A MILD cigarettes 
SWALLOW motorcycle tires 
SILVER QUEEN chocolate 

What happens to these longstanding brands? Presumably the government will not start cancelling these marks? For Indonesian licensees of foreign marks must the license be recorded or if not, what happens? What about local subsidiaries of foreign companies registering non Indonesian marks? Is this a new ground to oppose and cancel marks?  

There are no penalties for non-compliance; further guidance is probably needed. However it is not clear where this will come from, whether the TM Office, or a further regulation. We have seen in other cases, other Ministries (e.g. Health) issue rules that cover trademarks which the TMO then has to follow. 

One positive is that presumably local companies can no longer copy foreign marks as easily. American Express, Caterpillar, Home Depot and others may benefit.  

The Regulation potentially makes business much harder for their Indonesians. Of course Indonesian language marks for the local market are great, but these may not travel well. Building an export business is going to be harder since most global brands started in their local market. it would mean an an Indonesian company cannot buy a foreign language brand.  

Expect a number of complaints to arrive in the president’s desk from Indonesian companies as a result of this! Either the regulation will need to be amended, or a scramble to limit its effect to the narrowest of circumstances will be needed. 

Thursday, October 10, 2019

Chelsea Football Club forced to defend its brand in Indonesia

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A person called Hardiman has filed a trademark suit against Chelsea Football Club Limited (Chelsea FC) at the Central Jakarta Commercial Court. The case was filed on May 15, 2019. The Plaintiff asserts that he is the legal owner of the Chelsea trade mark and logo; he registered several marks at the IP office. He has asked the court to revoke Chelsea FC's own trademarks. 

Chelsea FC has defended and countered that the Plaintiff's own marks were filed in bad faith. They have various Chelsea Football Club trade marks registered in many classes and claim to be a well known mark. 

Chelsea is a hugely popular team in Indonesia and have even played pre-season friendly games in Bung Karno Stadium.  It is relatively rare that trademark squatters file to cancel the genuine rights owner's marks in Indonesia but there is an increasing level of assertiveness from Indonesian registrants these days. No doubt the case is an attempt to win a payout. The case is continuing. 

Wednesday, October 9, 2019

Towards Hague design system adoption in Indonesia and Vietnam

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Its been a long some coming but adoption of the Hague Agreement for design filing is now coming in SE Asia. The Hague international designs system allows for a single design application to be filed with WIPO for protection in multiple countries. Applicants must be from a contracting state. See here for the background. The ASEAN Economic Community has been hoping a number of members would follow its policy and join Hague. Singapore and Cambodia are already members. 

Indonesia plans to amend its designs law to implement Hague. The draft law is presently before Parliament, but the new parliamentary term will start soon, and a rescheduling will occur. Probably the law will pass in 2020. 

Vietnam has announced it too will adopt the Hague system. It filed its notice of accession last week. The IP law is undergoing amendment now.  Hague filings may begin to be accepted in 2020. 

Monday, September 30, 2019

Pharma boss arrested for allegedly selling 'deadly' counterfeit drugs

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Indonesian National Police arrested the director of pharmaceutical company PT Jasa Karunia Investindo (JKI) over alleged distribution of potentially lethal counterfeit drugs. The suspect, identified only as AFAP, 52, was arrested by the police in Semarang, Central Java in July.

The National Police’s Criminal Investigation Department (Bareskrim) crime division director, Brig. Gen. Mohammad Fadil Imran, announced in the media that AFAP was repackaging generic drugs and selling them as if they were patented drugs. The suspect allegedly obtained the contents by using generic drugs, fake drugs and expired drugs. Apparently he also stamped fake expiration dates on the packaging.

“[The counterfeit drugs] are not only harmful to public health, but they can be deadly when consumed,” Fadil said. AFAP reportedly obtained generics through his own company and through various pharmacy outlets in Semarang and Pancoran, South Jakarta.  

According to the police, the suspect was able to sell what were originally government-subsidized drugs for patients covered by the national health insurance (JKN) and Health Care and Social Security Agency (BPJS Kesehatan) as non-subsidized drugs at much higher prices. AFAP had allegedly been involved in the distribution of illegal drugs for three years and at least 197 pharmacies across Jakarta and Semarang routinely bought medicines from PT JKI, Fadil added.

The suspect faces charges under Article 196 and Article 98 and/or Article 197 of the 2009 Health Law, which carries a maximum 15 years' imprisonment, as well as Article 62 and Article 8 of the 1999 Consumer Protection Law, which carries a maximum 5 years' imprisonment. Interestingly no trademark crimes have been filed, perhaps due to the higher complexities in involving the IP owners. 

Friday, September 6, 2019

Design validity and infringement claims in Indonesia

The bifurcation of validity and infringement is a common problem in many, usually civil law countries. In Indonesia the practice is to hear the disputes separately. In the DC Comics Superman case (see here) the case was rejected for combining claims. This is also a risk when you run validity and infringement in the same case.

A designs case from the Surabaya Commercial Court is a good example of how case involving both validity and infringement should be decided to avoid wasting court time on separate cases. PT Solihin Jaya Industri sued Chung She for invalidity claiming his industrial designs (which dated back to 2009) for wheelbarrows with various features were not novel and should be revoked. Chung She counterclaimed for infringement. The Surabaya Commercial Court rejected the Plaintiff’s revocation arguments. Instead they found the Plaintiff had infringed the Defendant’s designs. They granted a reasonable material damages of IDR 250,000,000 (USD14,000), plus a ridiculous IDR 13 billion immaterial damages (USD 1 million)!

On appeal to the Supreme Court, the Supreme Court upheld the finding of novelty on the basis that the Plaintiff had not provided sufficient evidence otherwise. The Plaintiff’s appeal on novelty was a factual matter for the lower court, and did not concern comprise an error of law, which was the only proper subject for appeal. Meanwhile the infringement was clear. The Supreme Court did however cut immaterial damages down to a more reasonable IDR 1 billion (USD70,000).

This case sets out a clear pattern to argue for both validity and infringement. It would be interesting to see a Supreme Court case deal with the other usually opposite pattern, namely an allegation of infringement leading to an invalidity defence. There is a difference the other way around, since the IPO must be a party to be bound by a cancellation decision. The IPO would not normally be a party in an infringement claim, making a counterclaim for invalidity more complex to enforce.

Wednesday, August 28, 2019

IP and technology developments from IPWeek@SG

At the IPWeek event in Singapore this week there were several patent and technology announcements. Nine of the ten SE Asian IP offices launched a new pilot initiative to speed up patent applications for “key emerging technologies” including fintech, cybersecurity and robotics. The program called ASPEC Acceleration for Industry 4.0 Infrastructure and Manufacturing (ASPEC-AIM) will run for 2 years and allow for faster track patenting in these new tech sectors.

The existing ASPEC patent prosecution highway will also be expanded under a new program called the PCT-ASPEC. This will enable use of PCT reports from another ASEAN International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) to accelerate their patent applications elsewhere in another ASEAN country. The ASPEC system has been moderately successful but update has not been as significant as hoped, despite business demand for faster patenting in the region. This widens the document scope to add other reports which can be submitted to ASEAN patent offices in support of expedited examination.

IPOS also announced that Alibaba Group was granted an artificial patent on only 3 months  three months. IPOS’s runs an Accelerated Initiative for Artificial Intelligence patents.

Wednesday, August 14, 2019

Data privacy update – Indonesia

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Indonesia is still getting to grips with how to manage data. A full data protection/privacy regime does not yet exist. Personal data processing requires proper prior consent of the data subject under 2016 personal data protection regulations. It is widely thought not to be well observed. Spam calls, messages and social media data use are common by businesses.

Parliament is deliberating a new data privacy law. The Bill was drafted 4 years ago but is not yet passed It was initially listed to pass in 2019. however in April a new draft was prepared and send to Parliament.  The new bill follows a structure to define data, give rights to data owners/subjects, and establish data controllers, provide data processing steps, deal with data transfers, data erasure and destruction.  The bill may not pass until next year now.

A new Presidential Regulation 39/2019 provides a framework for managing the government’s own data.  There are rules on the type of data and how it must be collected (e.g. with metadata, that is standardized structures and formats) and held (e.g. in an open format so it can be searched, used and managed with ease). Various government institutions are created to help manage the data correctly. Four separate processes ensure data principles are adhered to – planning, collection, review and dissemination.  For citizens this provides some level of comfort that the government is managing data correctly.

Another new Regulation 40/2019 covers Residents’ Personal Data, covering the proper fixing of Resident's Identification Numbers and related personal identifying information (fingerprints, gender, biometrics etc), as well as rules for acquisition, storage and management by ministries. 

In a separate interesting development at the G20 in July, the issue of data protection arose. The G20 launched the Osaka Declaration on the Digital Economy, which is an affirmation the launch of a WTO program on developing consistent global ecommerce regulations for the digital economy. Indonesia however abstained at the G20, citing a lack of commitment to data privacy in the Osaka Declaration.  The Indonesian government expressed further concern that ecommerce in international trade had cross border and tax implications.  Indonesia is seeking to pursue online platforms that trade in Indonesia from outside the country, to tax their Indonesian revenues.  It is unclear whether it is really this or data concerns that were at the heart of the G20 abstention.

Wednesday, August 7, 2019

An ASEAN regional Trademarks office proposal revives

Image result for asean trademarkThe idea of creating regional ASEAN IP offices has been floated before; principally in the early 2000s. There was talk of a separate regional patent, designs and trademarks offices based perhaps in Singapore, Thailand and the Philippines. But insufficient support in other large countries, like Indonesia and Vietnam, combined with a solution for international filing offered by Madrid adoption scuppered those plans.

The 2016-25 ASEAN IP Action plan has put the idea back on the region’s agenda. The regional IP practitioner’s group, the ASEAN IP Association, has been looking again at regional trademark harmonisation. The EU’s Arise+ IP project is considering a feasibility study for ASEAN (given the success of the EUIPO). They will consider aspects such as legal infrastructure, operational set-up, fee structures, stakeholder interests, and the impact on national trademark systems.  ASEAN Member States held a meeting in Bangkok several months ago at which it was discussed. A concern to be addressed is potentially reduced cost and administration compared to as now, filing trademarks separately in each of 10 ASEAN Member States.