Towards Hague design system adoption in Indonesia and Vietnam

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. 

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.

Design law amendments in Indonesia

The next IP law due for reform in this round (the copyright law was amended in 2014, then patents and Trademarks in 2016) in Indonesia is the designs law. An IPR of increasing significance and one that is popular with domestic applicants in the region, designs are often overlooked as a means of protection. ASEAN’s AEC is keen on pushing through the Hague system in major markets in the region to reduce cost for applicants.  

The draft designs law (along with some other draft laws relating to business/industry) were due to be presented to Parliament and completed in 2017. However more work is needed and likely the law will be enacted in late 2018. One interesting change proposed is an unregistered design right. Also draft article 30 speaks of international filings - presumably intended to accommodate Indonesia joining the Hague Agreement in the future. Or rejoining, as technically Indonesia joined as a Dutch colony before independence, but that of course was not recognized as valid after independence.

Designs in SE Asia

Designs are creeping up the region's agenda as the adoption of the Hague designs filing system in SE Asia gets closer. Now the World Intellectual Property Organization (WIPO) will conduct a study on the use of designs in 3 SE Asian countries namely: Indonesia, Philippines, and Thailand. These all show large numbers of designs in the region. Here are the ASEAN published details for the major emerging markets in SE Asia.

Design Applications	2013	2014
Indonesia	4259	3731
Philippines	1376	1348
Thailand	2858	2477
Malaysia	2,053	959  (half year data)
Vietnam	2095	2311

The key point to note is that in most SE Asia countries the proportion of local applicants is higher for designs than for other types of IP. More local designers use the filing systems than say for patents. This justifies a focus on this type of IP in the region.  


 

Hague design filing in SE Asia

The Hague international designs system allows for a single design application to be filed with WIPO for protection in multiple markets. Applicants must be from a contracting state. The Hague system has two separate treaties but the 1999 agreement is increasingly popular. It is ASEAN policy for its 10 South East Asian members to join Hague. Singapore is already a member and discussions are ongoing in several other SE Asian states now. Indonesia's draft design amendment law refers to Hague.

Filing can be done electronically at WIPO or through national offices. Care must be taken when designating Japan and the US as there are additional requirements. WIPO only examines the formalities. Upon publication each national office may substantively examine the design, based on their own domestic legislation.

The major benefit of the system is the significant cost reduction and multi-country protection which will help designers in South East Asia tremendously.

Design infringement litigation in Indonesia

Design cases are always worth looking at to see how the court deals with the various complexities. Infringement cases help understand damages awards. So IP Komodo was curious about the story of one inventor's battle against a national champion.

M Rimba Aritonang filed a design for a Pipe Joint with features which protect natural gas pipe joints from catching fire due to presence of flames or through the sun. In November 2012 he filed a lawsuit at the Commercial Court of Central Jakarta against PNG, the Indonesian national gas company.  He alleged that PGN has been producing and using an apparatus using his design since 2006 without his authorization. Alleging breach of the Designs law he demanded compensation of IDR 132 billion (132 million USD).

PGN defended on the basis that the design registration should have not been granted by the Directorate of Industrial Designs (IPO) as it has absolutely no uniqueness or distinctiveness over prior disclosures, thus lacked novelty.
 
However the court found in April 2013 that PGN infringed the design and the judges decided that PGN must pay Rp.180 million (USD18,000) as compensation. 
 
The courts do struggle with novelty challenges and seem to generally presume that the IPO's examination must have been correct so few cases are rejected thus. The energy industry is prolific at patenting in Indonesia and there are many small inventors in this area who know how to leverage IP against the big boys. At least the damages award seems relatively sensible.