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Manage your Intellectual Property in South-East Asia

Case Study 23 - Trade mark bad-faith registration in Indonesia

Background:

A famous fashion designer was planning to promote its brand in Indonesia. However, after carrying out a trade mark search, it discovered that a third party had registered that trade mark in Indonesia. As trade marks in South-East Asia follow the ‘first-to-file’ principle, the fashion designer cannot register the mark in Indonesia anymore even though it owns the mark in several other countries.

Action taken:

The designer hired a local attorney to conduct an investigation on this issue. It was then found out that the trade mark was not yet being used even though it was registered and owned by that third party in Indonesia.

The fashion designer approached the third party in a covert (under pretext) way to propose acquiring the trade mark in exchange for monetary compensation.

Outcome:

After negotiation, the fashion designer finally managed to acquire the trade mark from the third party and, conversely, transferred a sum of money to them. Although he was reluctant to ‘buy back’ the trade mark registration in Indonesia, the total costs, including legal fees and compensation, appeared lower than the filing proceedings in the civil courts of Indonesia. Furthermore, the covert approach turned out to be a cheaper outcome.

IP lessons:

  • The trade mark regimes in South-East Asia are generally understood to adopt the ‘first-to-file’ system, which means that the first person to file a trade mark application in a particular South-East Asia country will own that right in this country once the registration is granted. EU SMEs shall consider filing their trade mark as early as possible to avoid incurring in bad-faith registrations.
  • Seek the advice of a lawyer with local expertise and carry out an investigation before taking any steps to solve trade mark disputes.
  • The strategy to overcome bad-faith registrations may vary case by case.
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