Indonesian lawyers fight it out for their own brand

When lawyers get into legal disputes with each other, it tends to get messy. Indonesia has in the past struggled to maintain a single bar association for lawyers. In recent years, the Perkumpulan Advokat Indonesia / Indonesia Lawyers Association has been the only one.

However more recently the Persatuan Advokat Indonesia / Indonesia Lawyers Union appeared as an offshoot if the Association. They were both using the same logo along with a near identical name. The Association founded on 20 August 1964, filed trademarks for PERADIN under the name of Persatuan Advokat Indonesia in 2010 in classes 45, 41, 38 and 16. The Union was an offshoot following an internal dispute.

The Association sued the Union claiming infringement as the Union offered services as a professional organization and ran seminars. The Association also claimed that the Union used the PERADIN mark on signs, letterheads, as well as on public announcements. The Association sought IDR 5 billion as intangible damages and a public apology.

The Union filed a motion to dismiss the Association's claim. They argued that the Association had no legal standing to file the claim using spurious arguments over legitimacy. The Union set out the history, that whilst the Association was the oldest Indonesian lawyers’ organization since 30 August 1964 under the name of ‘Persatuan Advokat Indonesia’ (PERADIN), in 2010, there was an internal conflict within the organization which caused them to split into two camps, one camp (the Association) which led by Frans Hendra Winarta, who registered the original name of the organization.

 

The other camp (the Union), led by Ropaun Rambe, used the name ‘Perhimpunan Advokat Indonesia’ (PERADIN). Ropaun Rambe had registered a Copyright for the PERADIN logo No. 048131 on 2 August 2010 so claimed that they rightfully used the PERADIN logo for their activities. The Union filed a counterclaim too, claiming that the Association’s action to register the name PERADIN as a trade mark is incorrect because as a professional association, the organization does not use the trade mark registration to actually trades in the services.  The Union requested the Court to declare that it was the legal body rightfully using and holding through its Copyright recordal the name PERADIN. The Union sought to cancel the Association’s PERADIN trade mark registrations because it infringed the Union’s Copyrighted Work.

Of course the Central Jakarta Commercial Court rejected the Union's motion to dismiss and their counterclaim. The Panel of Judges accepted some parts of the Association's claim by declaring that the Union had infringed the Association's PERADIN trade mark. The Panel ordered the Union to cease any activity that uses the PERADIN trade mark and to destroy any goods that use the logo. The Panel also ordered the Union to pay IDR 1 million per day as a penalty if it did not comply with the decision.

The Union filed an appeal with the Supreme Court but this was rejected too. They rightly told the Union that they should have chosen a different brand.

The interesting point is over the conflict of laws between trademarks and copyright. Indonesian infringers often register and cite copyrights in defence to justify use of similar marks. The clear point now is that copyrights cannot override trademark rights.

Patent annuities in Indonesia

At last with the new patent law there is clarity on the annuities issue. See here for the previous problem. A new Patent Office Circular covers annuities under the new Patent law enacted in August 2016. There are three situations:

Firstly the old law applies to patents filed before the new Patent Law came into force on 26th August 2016. There is no clarity in whether the government will continue to demand payments as they did in the past, but presumably not. 

Article 126 of the New Law applies to patent annuities due after that date.

There is a transition period for annuities due from 26 August 2016 until 30 December 2016. Patentees may pay these in 2016 along with 2017 annuities. Failure to pay these under Article 134(1) will lead to the patent being deemed abandoned. 

Patent holders will need to pay specific attention to annuities due since August.

 

 

Vietnam taxes trademark licenses

A controversial tax issue on IP has arisen in Vietnam. Trademark licensees traditionally do not pay VAT on the licensee fees because this is seen as part of technology transfer, a way to attract investment. However several triggers have led to a change. Vietnam is looking at its IP system in light of the TPP and EU trade deals. Previously VAT was not charged and the position somewhat unclear. A number of companies had ongoing discussions or investigations with the tax authorities.

Now the Ministry of Finance has issued a letter to make it clear that VAT applies on trademark license fees. The logic is that assignment of a mark is a sale so does not attract VAT, but licensing is an income based transaction, so Vietnam will charge VAT. And trademarks are not necessarily technology so are not exempt.  

There is resistance from business. However ultimately the cost is likely to fall on domestic licensees and passed on to Vietnamese consumers.

Accountants are advising companies to review their contracts because the issue could be retroactive. If all taxes were declared by the deadline of November 7^th, then prior license fees are not affected, even if tax was not paid. But if taxes were not filed and paid at that date the letter now applies and could apply to all undeclared license fees.

New Indonesian Trademark law takes effect

Indonesia's new Trademarks Law came into effect on 25 November 2016 as Law No. 20 of 2016.  See here for details. On 7th December 2016, the TMO started accepting applications based on the new law. In the intervening period applications have been filed, but these will fall under the new law.