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.

Indonesia's trademark law proves to be Kryptonite to Superman

Indonesia’s problem of trademark piracy has reared its head again. This time, DC Comics lost a recovation case against Marxing Fam Makmur‘s SUPERMAN trademark. The Supreme Court then upheld the decision. 

The problem is that this was a very old registration from 1993. Marxing Fam Makmur is connected to a large public F&B maker called Siantar Top, and they have made a SUPERMAN chocolate wafer bar for many years. DC Comics' own trademark for similar foods was rejected so they tried to cancel Marxing Fam Makmur‘s SUPERMAN trademark on the grounds of bad faith. 

Indonesia’s IP authorities usually take a narrow view of bad faith.  However the case did not get that far. Unfortunately the decision focused on procedural issues rather than the substantive case.  The suit was ruled to be vague and unclear because DC tried to combine several claims into one suit - first the trademark cancellation, then termination Marxing Fam Makmur's pending trademark applications and an order for the Co-Defendant (DGIP/IP Office) to grant registrations for Superman related marks to DC Comics.

This might not seem wrong but the latter two remedies don't exist in the law. The proper route was to cancel the registrations, deal with the pending applications separately and for DC to file its own marks which would be examined independently. DC Comics was further undone by its own Power of Attorney which was only for cancellation of Marxing’s trademark registrations but did not authorise the other claims.

Great care must be taken with litigation in Indonesia. Getting caught out on procedural issues is a common problem. Elsewhere in the world a court would just reject the bad claims; here they throw the whole case out. That is a case of judicial rigidity applying procedure over justice.  

Indonesian Pierre Cardin case finally ends

The Indonesian litigation over the PIERRE CARDIN mark has finally come to a conclusion. See here for the previous reports. In 1974 the mark PIERRE CARDIN was registered in class 3 then later assigned to Alexander Satryo Wibowo.  The crux of the case was whether the case had passed the 5-year deadline for cancellation actions and the extent of the available evidence bask in the 1970s o prove bad faith. Alexander won at first instance and on appeal. 

Pierre Cardin filed a reconsideration appeal to the Supreme Court based on new evidence (novum). The Supreme Court rejected the appeal. The court did hear the new evidence submitted but rejected the case as being a repetition of the earlier case. 

Reconsideration appeals are always difficult. New evidence needs usually to be compelling. The problems in such cases usually begin with the earlier cases having insufficient evidence; the loss then becomes harder and harder to overcome over time. 

Indonesian civil IP case statistics

Indonesian civil IP cases have declined a little last year but remain largely steady at around 100 per year. Most are trademark cancellation actions still. The Jakarta Commercial Court handles 85% of IP cases, followed by Surabaya Commercial Court (9%).

 

 

Longstanding Indonesian PRADA dispute settles

A long trademark dispute between PT. Manggala Putra Perkasa and Prada S.A. has apparently ended in a settlement. Both parties have been in litigation since 2013. Previous details of the dispute are here.

The dispute is over the true ownership of the PRADA trademark. Both parties claimed to be the rightful owner and have rights to use the PRADA mark in Indonesia. Prada S.A. claims to be first user of PRADA in the world since 1913, with well known mark rights. PT. Manggala Putra Perkasa claims to be the rightful holder of a PRADA trade mark registration in Indonesia in class 18 and 25.

Prada S.A. had already been successful in one case to cancel PT Manggala Putra Perkasa’s registrations on the grounds of similarity in principle to their well-known trade mark. After this decision, PT. Manggala Putra Perkasa filed a civil and criminal action against the use of the PRADA mark in their shops in Jakarta.

Under the settlement both have agreed to withdraw all the ongoing lawsuits – one claim from Prada S.A. and three claims from PT. Manggala Putra Perkasa. PT. Manggala Putra Perkasa’s legal representative stated to the press that their side have been negotiating with Prada S.A. outside court. He did not divulge further details.

Damages for trademark infringement in Indonesia

A recent trademark infringement case helps interpret damages further.  The Plaintiff owns V-GEN and V-GEN MEMORY trade mark registrations in Indonesia in class 9 for memory cards. In 2012, the Plaintiff found counterfeit memory cards sold by shops owned by the Defendant.  A criminal action was filed and the Jakarta district criminal court declared the Defendant guilty and sentenced him to 10 months imprisonment. This Jakarta High Court on appeal increased the sentence to 11 months, which was confirmed by the Supreme Court.

The Plaintiff filed a civil case claiming the counterfeiting  caused considerable damage to his business, claiming IDR 16,340,000,000 damages (over USD1 million) due to profit falls, promotion expenses and intangible damages. The Central Jakarta Commercial Court granted parts of the Plaintiff's claims. The Judges declared the marks well known and infringed and then ordered the Defendant to pay IDR 2.000.000.000 (USD140,000) to the Plaintiff. The amount was the promotional expenses of the Plaintiff in magazines, at IDR 200,000,000 per month x 10 months. The Judges denied the rest of the Plaintiff claims.

The Plaintiff appealed the smaller damages award but the Supreme Court refused his appeal.  In fact this was a decent sized damages award based on evidence. This is typically the only way to recover damages - speculative or unsubstantiated claims usually don't work.  It is perhaps odd that the claim was not based on losses or profits - as it was in the Hitachi trade secrets case - see here.

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.

Goods v services infringement in Indonesia

 


 

A longstanding dispute highlights the difference between goods and services and specifically retailing in infringement assessment. The Plaintiff PT Multicom Persada Internasional owns the i BOX trademark registration in class 9 for computer peripherals and software. The Defendant PT Data Citra Mandiri opened Apple product retail outlets in 20 locations in Indonesia under the name iBox. The Plaintiff sued for infringement - details here.  The Plaintiff claimed substantial financial losses and intangible damage.

The Defendant requested the Central Jakarta Commercial Court to dismiss the Plaintiff's claim due to errors in their name and address in the claim. They also argued the marks and goods are not similar. But the Central Jakarta Commercial Court rejected the Plaintiff's case so they filed a cassation appeal at the Supreme Court.

 

The Supreme Court has now rejected the Plaintiff's appeal. The Panel of Justices found that despite the similarity in pronunciation, both trade marks use different letters, shapes and are in different classes.  The class point is perhaps the most important althought these two could be considered connected channels of trade. Infringement cases are relatively rare so this kind of jurisprudence is useful to see.

Indonesia civil trademark damages calculations

The Plaintiff Andy Najarudin owns the NAKAMICHI trade mark covering textiles. After discovering sales of counterfeit NAKAMICHI products he sought help from the Indonesia Textile Association. One Harry Sucipto and his business partners had been manufacturing and trading fabrics using the NAKAMICHI mark without authority since 2011.

After a failed mediation by the Association, the Plaintiff reported the Defendants to the police and filed a criminal case with the West Jakarta District Court. The District Court found the Defendants guilty of trademark infringement so sentenced then to three months imprisonment and a fine of IDR 30 million (USD2,200).

Then the Plaintiff filed a damages claim with the Central Jakarta Commercial Court as a result of the infringement. They claimed actual loss damages of IDR 5,178,765,000 (USD 380,000) as well as a total of IDR 20,000,000,000 (USD1.5 million) of intangible loss damages. The Plaintiff provided a comparison of the profits they made during 2009-2013, which showed a significant decrease from 2011 onwards, to support their claim.

The Central Jakarta Commercial Court granted parts of the Plaintiff's claim. They declared infringement of the NAKAMICHI trade mark. The Judges ordered the Defendants to cease their infringing activities and to pay a total of IDR 1.5 billion (USD110,000) in actual loss damages and IDR 1 billion (USD78,000) of intangible loss damages.

The Supreme Court rejected the defendants' appeal, but amended the Central Jakarta Commercial Court's decision removing the intangible loss damages. The criteria to calculate this amount could not be determined they said.

It is rare to see a case where the plaintive puts in evidence of its losses. Typically, judges get very little real evidence to assess damages. Plaintiffs do frequently make outlandish claims of intangible losses but often these are refused. Damages here of IDR 1.5 billion (USD110,000) seems broadly reasonable for a textiles business. In Indonesia legal costs are never awarded.

Copyright infringement civil litigation in Indonesia

 

The Semarang Commercial Court heard a copyright infringement dispute between PT Inter Sport Marketing and PT Sun Star Motor. Intersport the Plaintiff licensed the copyright and broadcast Media Rights in Indonesia for the 2014 Brazil FIFA World Cup Brazil. They sub-licensed some of the rights. 

Sun Star is the authorized dealer of Mitsubishi vehicles and it broadcasted the FIFA World Cup Brazil at a commercial event without authorization. They promoted their event with Mitsubishi logos and images. The court complaint was that the public might think that Mitsubishi is one of the World Cup event sponsors. One sub licensee sent a cease and desist letter and the Defendant published a newspaper apology.

The Plaintiff filed a copyright infringement lawsuit against the Defendant demanding compensation of IDR 51,000,000,000 (nearly USD 4 million). The Defendant argued that the Plaintiff could not provide proof of their rights and had not registered their copyrights. The Semarang Commercial Court granted parts of the Plaintiff's claims. The Judges affirmed copyright infringement and ordered the Defendant to pay IDR 500,000,000 in compensation (USD38,000).

 The Defendant appealed to the Supreme Court. They argued that although it is required to record IPR Licenses, no implementing Government Regulation existed so recordal was impossible and so the License could not bind third parties. This was rejected fortunately and Supreme Court confirmed that the unauthorized FIFA World Cup broadcast was copyright infringement.

Jakarta IP Court improvements and move

Indonesia's Jakarta District Court's Commercial Court hears most IP cases. Below is the latest reported case data. Most foreign IP cases are heard there. Of the nearly 100 cases per year the vast majority are trademark related - most are cancellation or non use deletion actions. The number of cases outside Jakarta is starting to rise, with 9 cases in 2015 in Surabaya and 2 each in Medan and Semarang.
 

	2012	2013	2014	2015
Trademark cases	64	92	75	76
Patent cases	2	1	6	3
Copyright cases	8	4	3	5
Total IP cases	74	97	84	84

 
The number of appeals is rising, last year 47 cases were appealed to the Supreme Court - around half of all the IP decisions. A second appeal is possible but much harder; in 2015 only 14 went to second appeal.
 
The Central Jakarta District Court recently moved from an older building into nice new premises (see picture).  Users say it is much more modern. All the district courts are putting in place an online database of pending cases, so you can see the case details, hearing times, even find documents. Still there is no sign that judgments will be published sadly (probably the single biggest weakness in the IP litigation system). The Central Jakarta Court's IT system seems to be less well updated than South Jakarta District Court's, but there is some progress. And everyone agrees that the new building's air conditioning is a joy compared to the old building - waiting for the judge is no longer a hot problem!

Civil trademark infringement in Indonesia

Soeharso, an Indonesian businessman had owned the mark OBOR in class 30 since 1990 and gave a 4 year licence to Gunadi Prasetyo (the first Defendant ) to use the trademark on rice and sugar products. The Defendants included Lion a well known local supermarket. The plaintiff claimed Gunardi and Lion continued to produce and sell rice products under the OBOR trademark after the license had expired. No royalties had been paid. 

 

The Defendants tried to argue that the claim was premature since there was another pending case over validity of the mark brought by another party.  However the Semarang Commercial Court granted parts of the Plaintiff's claims. He was exclusive owner of the OBOR trademark and the Defendants committed infringing acts by using the mark without authorization. The Defendants were ordered to pay damages and stop their activities in relation to the mark.

The Defendants filed an Appeal, which was rejected by the Supreme Court. A further Reconsideration Appeal filed by the Plaintiff was also rejected.

The case shows how local parties often bring infringement cases more readily than foreign companies. It also shows there are courts outside Jakarta able to hear and deal with IP cases. 

Perhaps the most important element was the damages claim. The claim for IDR10.5 Billion (USD750,000) was rejected outright. The lower court ordered a far lesser sum of IDR75 million (USD6,000), however the Supreme court threw even this out. Damages claims remain tricky. Whilst crazy sums as here are commonly claimed, low awards are usually made by courts. Real evidence of losses must be provided to win any money.