The challenge of complex IP disputes in the criminal system in the Philippines

A Manila Prosecutor has thrown out a utility-model infringement and unfair competition complaint. A criminal case was filed by TouchPay payment system owner Manila Express Payment Systems Inc against the officers of BTI Payments Philippines and Electronic Transfer Advance Processing Inc. (eTAP). Both are also online payment and processing companies.

The case began with a raid by the National Bureau of Investigation (NBI) after a court granted search warrants against the two defendants in July 2020 on the basis of confusing similarity in the appearance of the automated payment machines.

The case passed to the Department of Justice but the Prosecutor rejected the complaint as prematurely filed. Criminal actions for utility model infringement may only be filed for repeated breaches of Section 76 (which covers Civil Infringement) of the IP Code (Republic Act 8293), after a civil judgment. 

Under the unfair competition charges the defendants were accused of misrepresenting the IP owner’s goods or services as their own. More specifically passing off eTAP’s Pay&Go automated payment terminal as the IP owner’s TouchPay machine. But the prosecutor decided there was not sufficient evidence as the physical appearance of eTAP’s Pay&Go machine looks different so no end consumers were misled. 

Utility model and unfair competition cases are extremely hard cases to press through any criminal system. A number of SE Asian countries allow criminal remedies in such cases, but in most developed countries a case like this would be filed through civil courts for an injunction and damages. Technicalities need a more detailed examination that prosecutors and criminal courts should be expected to spend time on. 

Sheraton successfully enforces its St Regis brand in Indonesia

The Sheraton and Starwood Hotels groups have canceled Staywell Hospitality Group's trade mark registrations for PARK REGIS class 35 and 43.  The Central Jakarta Commercial Court's Panel of Judges granted the Plaintiffs claim completely on the basis that their ST. REGIS trade mark is a well-known mark widely registered and used around the world and in Indonesia. Similarity was determined on the basis of use of the same dominant element REGIS. The Panel of Judges deemed that PARK is a more generic term that often used in hotel names. They also said that the Defendant filed PARK REGIS in bad faith, especially since it is used in the same industry.

 

A second case against REGIS @ THE PEAK AT SUDIRMAN in class 36 was also granted by the Supreme Court in an appeal from a trade mark cancellation case against PT Graha Tunas Mekar. Previously, Sheraton and Starwood lost at the Central Jakarta Commercial Court because the court found that the Defendant's trade mark is not similar in terms of sound, configuration, colour, and number of letters.  The Plaintiffs argued on appeal that the term REGIS is a dominant element since it is placed at the front. Moreover, the Defendant's trade mark also does not have any distinguishing elements as the term PEAK and SUDIRMAN are location references. The Plaintiff claimed that the Defendant registered the trade mark using that dominant element REGIS in bad faith to take advantage of the Plaintiff's popularity. The Supreme Court's decision to grant the Plaintiff's appeal overturns the Central Jakarta Commercial Court's decision.

Indonesia's efforts to protect creative industries' IP

 

Indonesia established a government agency called the Creative Economy Industry Agency ("BEKRAF") to foster and grow the sector. It covers 16 categories of creative industries, which are:

Music, crafts, publishing, fashion, culinary, advertising, movies, application software, games, performing arts, video animation, architecture and interior design, fine art, photography, visual communication design, TV and radio and product design.
 
Their top priorities are movies, music, and digital applications.
 
The Agency was established as a spin-off of the previous government's Ministry of Tourism and Creative Economy as an independent government agency. Initially, the agency reported to the Ministry of Tourism but now it reports directly to the President.

After the BEKRAF Head's appointment in January 2015, the Agency appointed eight members of an executive team on July 2015. The House of Representatives has not yet approved their program budget, hindering any significant activities.

Despite that, BEKRAF's Head, Triawan Munaf, stated that they have been preparing several moves in terms of copyright protection in Indonesia.

a)     Establishment of an Anti-Piracy Task Force

The task force was established on August 2015. Their current plan is to press criminal charges against several repeat offenders of movie pirate websites.

b)     Development of Online Anti-Piracy Alert System

A collaboration with PT Telkom Indonesia, the Alert System is planned for websites that contain copyright infringement. The system will show pop up information to remind the user of the sanction for downloading illegal content. The pop-up will also include a link to sites that provide paid, licensed digital version of the content. The Alert System is expected to start operating on January 2016.

By Q1 next year, BEKRAF will likely be more active in anti-piracy and copyright protection efforts in Indonesia.  Of course the main problem in in Indonesia is the almost complete lack of law enforcement, but any alternative solutions are welcome, indeed alternatives like this will probably be the only means of enforcement in the foreseeable future


 

Daiso wins in the Philippines Supreme Court against rival retail brand

It has been reported that the Philippines Supreme Court issued a ruling affirming a Court of Appeals (CA) decision, which ruled in favor of Daiso Industries Co. Ltd . of Japan (Daiso) in ordering the cancellation of a trademark for DAISO registered in the name of Japan Home, Inc. (Japan Home).

Japan Home, a Philippine corporation, operated DAISO retail stores selling various types of housewares. On 30 April 2007, Japan Home registered the mark DAISO for goods and services in classes 21 and 35.

On 9 February 2009, Daiso, filed a cancellation action at the IPO’s Bureau of Legal Affairs (BLA) against Japan Home’s registration of the DAISO  mark. Daiso argued that it is the prior user and owner of the mark since 1977, that it uses the mark as a trade name worldwide. Daiso said that Japan Home’s registration was fraudulent, intended to ride on the goodwill of Daiso. In response, Japan Home relied on the "first-to-file rule" and challenged the claim that the Japanese company's DAISO mark is well-known.

The BLA upheld Japan Home’s registration for initially ruling that Daiso failed to show actual prior use and well-known status in the Philippines. On appeal, the IPO’s Office of the Director General (ODG) ruled that the mark is internationally well-known and ordered the cancellation of Japan Home's registration.

 

Japan Home appealed the decision to CA, which still ruled in favor of Daiso and declared the mark DAISO a well-known mark. The CA stated that Japan Home’s registration only gives a presumption of ownership while the “first-to-file rule” is only a prima facie presumption that the prior mark is superior to any subsequent application. The presumption of ownership and the “first-to-file-rule” must give way to contrary evidence of the earlier registration being made in bad faith or where there is a well-known mark of another or that there is an actual prior and continuous use in good faith by another in the concept of an owner. The CA noted that while the territoriality principle requires that a mark be used in commerce in the Philippines to be entitled to protection, internationally well-known marks are the exception to the rule. Further, as DAISO is also used as a trade name by Daiso, and both Japan and Philippines are parties to the Paris Convention for the Protection of Industrial Property (Paris Convention), Daiso’s trademark and trade name are protected against confusingly similar registrations. The CA also stated that the similarity of Japan Home’s mark to Daiso’s mark suggested bad faith on the part of Japan Home.

 

This was a long fought battle, but the CA decision appears clear and well reasoned, and we assume the Supreme Court followed similar reasoning.

 

Kopitiam wars in Indonesia - another battlefront

In a continuation of the longstanding Indonesian KOPITIAM wars, (background here) a new case between Phiko Leo Putra operator of Lau's Kopitiam cafe and Abdul Alex Soelystio has been decided in the Supreme Court. Abdul has secured dozens of trademark registrations in many classes for KOPITIAM which is a Chinese translation of coffee shop, previously a generic term across South East Asia including Indonesia.

Hundreds, if not thousands of KOPITIAM cafes exist however. Abdul has been winning cases and is taking enforcement action against the many users of KOPITIAM throughout Indonesia.  In another case, he forced the cancellation of Paiman Halim's KOPITIAM trade mark registration in class 43.

In the current case, Phiko had applied for LAU'S KOPITIAM in Class 43 for cafes and restaurants in September 2013. Phiko claimed that Abdul's registration for KOPITIAM should be cancelled because it is in the public domain. Phiko argued KOPITIAM is a combination of two descriptive words, KOPI ('Coffee' in Indonesian language) and TIAM ('Shop' in Chinese Hokkien dialect). He argued it is widely used for coffee shops especially by the Chinese immigrant community.

The Defendant Abdul claimed that the LAU'S KOPITIAM application is similar to his KOPITIAM trade mark registration. He requested the court to order the Plaintiff to stop his business and pay damage for Abdul's losses.

The Panel of Judges at the Jakarta Commercial Court rejected the Plaintiff's lawsuit. However they also decided that Lau's Kopitiam mark has significant differences to the Defendant's KOPITIAM mark so was not similar.

On appeal in the Supreme Court, the Judges overruled parts of the Commercial Court decision. They confirmed the two marks were in fact similar and that there was infringement and Phiko had to cease use of his Lau's Kopitiam trademark.

The decision is probably right in respect of the similarity. But it does not address the descriptive generic issue, which is also ongoing in another case brought by the Kopitiam Owners  Association. Meanwhile Abdul keeps asserting and winning cases, in his attempt to monopolize an entire industry.

 

The Philippines courts slow-cooks famous restaurant case

IP Komodo has written how effective the BLA is becoming at civil IP litigation. A long running Philippines civil IP dispute shows the flip side - using the general civil courts. MAKATI SIZZLER was registered as a trademark in 1989 for a restaurant allegedly in operation since 1979 by Makati Food Service Systems.   

Sizzler Restaurants International had 2 registrations from 1988 including “Sizzler” for restaurant services.  It sought to revoke the mark. The case proceeded through multiple levels up to the Court of Appeals (CA). The question was who owned rights in the term “Sizzler” in the Philippines. The court held Sizzler was a famous  trademark protected by the Paris Convention and that MFSS failed to show rights to the mark.   The evidence of prior use was weak they said. Anyway it was confusingly similar and should not have been granted. “ This is because there existed a resemblance, exact similarly in sound, spelling, pronunciation, and commercial impressions of the word ‘sizzler’ which was the dominant portion of private respondents’ marks”.

 

All well and good, but justice delayed is a costly exercise for the IP owners.

Singapore's coup over Indonesia's Ku De Ta

Ku De Ta is one of Indonesia's top brands; the legendary Bali beach club and nightspot, where beautiful people sunbake, eat, drink and party to dance music. Its brand problems are a different sort of fame. See here for a previous post setting out the background.

In short the Indonesian Ku De Ta owners brought cases in Singapore based on their well known mark, against the Singapore registered trademark owner, Nine Squares (an Australian Company) who licensed the mark to one Chris Au (believed to be involved in the Indonesian operation originally) who in turn assigned this right to use to the Defendant operator, Ku De Ta SG Pte Ltd. They operate a huge Ku De Ta club atop the Marina Bay Sands casino, perhaps the premier nightspot location in Singapore.

The Indonesian owner recently lost the case. It seems to be on the technicality that they could not prove Ku De Ta was famous in Singapore by 2004 (when Chris Au applied for the mark).  The best guess is there are 2 fundamental problems:

- a group of 'partners' did not agree who owned what in the early 2000s and one of them registered the brand elsewhere, speculatively.
- they did not get organized to manage and protect the brand when they set up

They are appealing but counsel Singapore familiar with the case say they probably will not win.

Meanwhile, French luxury company LVMH's Venture capital arm is buying KDT Singapore. They plan to renovate the Singapore club, open in Hong Kong and take the Ku De Ta brand global. Nine Squares already registered the mark in Hong Kong and elsewhere.

This is a text book example of how to lose the global potential of a brand by failing to manage and invest in it at the start.
 

Apple retailer dispute reaches trial in Indonesia

PT Multicom Persada International owns a class 9 registration for the brand IBOX for various electronic products. PT Daya Citra Mandiri is an authorised reseller of Apple products and uses the name iBox at more than 20 outlets in Jakarta and major cities in Indonesia, many in top shopping malls (see picture). Multicom sued Daya Citra for trademark infringement and damages. Daya Citra has a registration for iBox in class 35 for retail services.

The Jakarta Commercial Court held in early February that the two marks differed. First they were not similar due to different placement of the letter i. iBox is composed of  a small "i" next to letters that form the word Box, all written horizontally. While the plaintiff 's IBOX brand consisted of a logo with "I" placed vertically and above the letters BOX.
 
More importantly the defendant's retail stores providings services in class 35 is not the same as the registration of the plaintiff in class 9.
 
Any trademark expert would ask a lot of questions of this decision. But perhaps there is justice in the somewhat weak arguments used by the court, when you read the general comments it made about how the defendant was not free riding on the Plaintiff's mark, and they did not disturb the Plaintiff's trade.  The case smells of Multicom looking to get leverage over Apple's powerful distribution agent.
 
PT Multicom Persada International Daniel Setiawan said it would appeal.

Coffee dispute is left unresolved

The Kopitiam Employers Association of Indonesia (PPKTI) has been disappointed in its litigation against the KOPITIAM trademark owned by Abdul Alex Soelystio. See here for background. The Central Jakarta Commercial Court decided that the PPKTI has no legal standing as an interested party. They found against PPKTI on an obscure technicality that it could not properly prove its status as a legal entity because it's deed of establishment had not received a proper approval from the Ministry of Justice.

This means that the Plaintiff's claim was not accepted and as such no substantive decision was made on the merits of the case. This not only did PPKTI not have any hearing of its substantive case, but so too Abdul Alex's counterclaim was not decided. It means that the case can be refiled later. Although perhaps PPKTI will appeal.

This is decision is a shame. The judges focused on an irrelevant procedural technicality as opposed to the substantive trademark issues. How the precise legal structure of the Plaintiff's establishment can have any bearing on the descriptiveness of another's trademark is a mystery! In fact this type of decision is a poorly kept secret code. For whatever spurious reason the court clearly wanted to favor Abdul Alex, but they do so by finding for him on a technicality. So they don't actually prohibit the Plaintiff from reapplying later on, presumably after correcting the error. 

 

Jakarta iStore infringement case

Tjandra Juliana is the Indonesian owner of a trademark 'iStore', Registration No. DN.000267176 dated 2 September 2010. Tjandra operates a computer and parts store specialising in Apple products under the name 'iStore' at Poins Square, South Jakarta.

 

After discovering an infringement, Tjandra sued PT BIG Global Indonesia for operating another shop under the name ‘iStore’ located at Ambassador Mall in Jakarta. The case was filed in the Central Jakarta District Court in early 2011.
 
The Central Jakarta decided on 4th August 2011 that PT BIG infringed Tjandra's trademark and ordered the defendant to pay Rp 10 million for each day of delay in implementing this decision. PT BIG appealed to the Supreme Court.
 
The Supreme Court decided that Tjandra is the rightful owner of the brand 'iStore' and the defendant had without right and without the consent of the plaintiff used the brand 'iStore'. The judges agreed that the mark is similar in principle to the plaintiff's trademark 'iStore', on January 31, 2012 (although the decision appeared in the media only recently).

IP Komodo is encouraged by the increasing number of IP infringement cases coming through the Jakarta courts. Although IP Komodo is not sure Apple would approve of the iStore website which pays tribute to the iMac desktop!

An impressive IP transaction in Thailand

In contrast to the trademark woes in the tourism services sector in Lombok here and Singapore here comes a positive tale of IP value in this industry from Thailand. A major US private equity house called Pegasus Capital Advisors is to buy Thailand's Six Senses Resorts & Spas, a chain of 10 super-luxury resorts and 28 spas in in 20 countries operated by Six Senses.


What interests IP Komodo is that the transaction is all about intangible assets. The acquisition was of the intellectual property of the business, chiefly the Six Senses and Evason brands along with the resort and spa management contracts. No pyhsical assets were sold. There is a lesson here for Asian businesses in the importance of investing in intellectual property rights and the value that can be created.

Lombok hotel trademark disputes

Six Continents Hotels Inc., the US hotel operator which owns the trademark HOLIDAY INN sought to cancel the trademark HOLIDAY RESORT LOMBOK (see left trademark) owned by PT Lombok Seaside Cottage. Having failed at first instance they appealed to the Supreme Court, but on March 12, 2012 the Supreme Court refused the appeal. The reason for failure of the case was, according to the court a lack of similarity between the two marks. The reason for failure of the case was, according to the court a lack of similarity between the two marks.

IP Komodo has in fact slithered past this hotel and noted the sign before. There are no details of the precise marks owned by Six Continents in Indonesia, but the attached one on Google is probably the closest. However Holiday Inn as a brand is used in many formats so possibly this is not registered.

Of course there is another question whether anyone should be able to register a mark HOLIDAY RESORT LOMBOK in a tourist destination like Indonesia!

Vietnam trademark infringement

Interbrand Group the UK strategic brand consultancy is taking on 3 Vietnamese companies for trademark infringement. The allegations include:

a. A Ho Chi Minh City-based business called Interbrand JSC uses "Interbrand" for their business activities via internet sites.

b. Inter Brand Media Co., Ltd. also in Ho Chi Minh City uses similar domain names: www.interbrandvietnam.com www.interbrandmedia.com; www.interbrandmedia.com.vn and www.interbrandmedia.vn.
c. Hanoi based International Brand JSC uses the domain www.interbrand.com.vn

Apparently Interbrand Group has lodged complaints against the two firms in Ho Chi Minh City, and is preparing legal procedures against the third in Hanoi.

The news reports do not say whether this is a civil or criminal action, but the press do suggest it is a court action. In Vietnam there are precious few civil IP disputes, so IP Komodo is licking his lips at the prospect of a civil trial. But more common is the use of the Economic Police for criminal IP violations and the Market Management Bureau which has authority to handle trademark complaints at a retail level. However the fact that these are internet domain name related cases suggests civil action too.

Meanwhile Interbrand is speaking about its Best Global Brands listing, the firm’s annual ranking of the top 100 brands at an American Chamber of Commerce lunch in Ho Chi Minh City on Oct 11th 2011 from 12:00 pm to 1:30 pm. Those wishing to attend can click here.

Vietnamese company learns about IP in Singapore

A leading Vietnamese IT firm FPT Information System (FPT) has opened in Singapore and cites an interesting IP reason for doing so. Its target customer is SMEs which lack their own IT expertise. They supply IT services to customers in Vietnam and its Chairman Do Cao Bao said this week that the company had set up a small back office in Singapore in 2008 to learn more about the global business environment and to network with companies to promote its brand. Initially business deals were channeled back to Vietnam.  But the other reason he says, for Singapore is as a launch pad to learn how to do business in "transparent" markets, which he characterizes as those with strong legal and intellectual property systems. This very different from Vietnam where business is conducted in a "non-transparent" way, which FBT is used to.