Wednesday, May 22, 2013

Trademark similarity and bad faith in Indonesia


A dispute between local companies highlights a common ex-employee scenario. PT Krakatau Steel Tbk (Krakatau) is a huge publicly listed Indonesian steelmaker. One of its brands is KS POLE. A former officer established a company called PT Perwira Adhitama Sejati (Perwira) and registered the trademark IKS.

The Central Jakarta Commercial Court had to decide whether to cancel Perwira's IKS mark in early May. Kratatau's first argument that the marks are similar was dismissed. IKS was found to be different. Krakatau also claimed bad faith because a former Krakatau officer established Perwira and so Krakatau asserted they registered the brand just to piggyback on the fame of the brand owned Krakatau. There were some suspicious rebuttals by the defendant such as that it was an acronym, but this was not stated on the trademark application form as required. So whilst it smelt odd, no bad faith was established.

The newspaper reports are not exactly clear but the lessons are well known now with such cases. Absolute clarity and evidence on the bad faith conduct is required, not a general assertion.  And a caution on similarity for marks which are not internationally famous; similarity is not easy to prove where marks are already registered by the TMO.

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