Wednesday, December 12, 2012

The high IP cost of doing business in Indonesia

Toyota must now be the most prolific IP litigant in Indonesia. It filed another cancellation action to cancel a mark LEXUS HPS 102 belonging to a local businessman Stanley Ang at the Central Jakarta Commercial Court recently. Toyota’s claim is famous mark and bad faith.

By IP Komodo's count that is 5 trademark cancellation cases based on fame and bad faith in the last 2 years, involving their marks TOYOTA, LEXUS and INOVIA. The costs of doing business in Indonesia are exacerbated by the endless necessity of having to deal with pirate trademarks. At least after several cases Toyota's evidence gathering to prove fame should be easier.

There are two interlinked causes outside the apparent Indonesian propensity to use other peoples' brands. First the low standard of trademark examination. Examiners allow obviously famous marks through, they also allow descriptive marks and there are instances where obvious funny business seems to occur. Add to that the fact that you need to go to court to litigate to recover these pirate marks. The result is lots of trademark conflicts, which must be taken to court to resolve, then often appealed to the Supreme Court. The argument that the revocation system cannot be left to the TMO because the TMO cannot be trusted to overrule itself (because it granted the mark), underlines how weak the TMO system is and that there is not an appreciation of the need for a system of independent checks and balances.

So the TMO therefore becomes a part of the IP problem and part of the reason for the high IP costs of doing business in Indonesia.


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