Wednesday, September 28, 2016

Indonesian trade secrets litigation delivers record damages

Image result for basuki boiler
A longstanding trade secrets fight has been rumbling back and forth through the courts for years. Indonesian engineering firm PT Basuki filed a claim in 2008 against a local divison of Hitachi Construction and several individuals for trade secrets infringement. The issue related to boiler construction. PT Basuki alleged Hitachi's Indonesian entity and the individuals used its trade secrets to create another boiler.

The case was filed in the Bekasi District Court. However the District Court decided that the Commercial Court rather than the District Court was the correct forum because the case concerned the trade secrets law, which is a special law relating to IP and most IP cases go to the Commercial Court. The courts had previously heard a related industrial design case between the same parties too. However, the Supreme Court overturned the District Court case stating that although many IP cases are heard in the Commercial Court, for infringement the correct court is the place of domicile of the defendant.

So the case was retried, and in 2015 the Bekasi District court found for the Plaintiff awarding just under USD100,000 equivalent in damages against Hitachi. The case was appealed and the damages were increased enormously by the Bandung High Court.  The basis of the damages was 50% of the lost profits of PT Basuki for a 2 year period 2005-2007. This amounted to around three quarters of a million USD. An appeal to the Supreme Court was filed in November last year. 

Trade secrets cases and very large damages awards are both rare in Indonesia. This was a successful local company which felt its trade secrets had been stolen, leading to one of the largest IP damages awards ever in the country. The Supreme Court decision will be watched closely.

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