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Tuesday, October 18, 2011

Trade name disputes in Indonesia

For some time trademark holders have struggled to find a way to cancel Indonesian registered company names which conflict with registered trademarks. Of course when used it may amount to trademark infringement, but when used on different goods, or only used as a corporate name, IP holders have had few inexpensive options.

Under the new Indonesian Company Law, a government regulation on the application and use of a company name was issued on 4 October 2011. Under the previous regulation, a company name application was to be rejected by the Ministry of Law and Human Rights if (among other things) it has been used by another company or is similar to another company’s name or is identical or similar to a well-known trademark. The general notes on the old regulation stated that a company name should be consistent with the rules on well-known marks. But the problem was that Indonesian rules on well known marks are weak.  

The new regulation no longer has any reference to similarity to well-known marks. Now an application for a company name must not be in use by another company or not similar to the name of another company (including the same meaning). So this appears to be a step back. the only real option now is to argue it copies another registered company name (thereby excluding non invested companies).

Previously IP holders arguably were able to challenge a registered company name that copied a well-known mark, by way of a complaint to the Administrative Court. But this was rarely done as it was technically difficult to argue. The new regulation also provides no formal challenge system leaving the same court option as the only open one, albeit without the well known mark ground.

The spirit of the previous regulation as regards to well-known marks was to avoid a bad faith third party company registration, and although the implementation was poor and the procedure unclear, at least the article was there and could in theory be used by IP holders. Now the situation seems worse.  

To add to the complexity, the regulation only applies to a company in the form of a PT (limited liability company). Another form of business entity such CV (commonly known as partnership locally) is not covered by any rules at all.  

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