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Manage your Intellectual Property in South-East Asia

Case Study 9 – Trade Mark Squatters in Indonesia

Background
A leading Italian fashion company is engaged in the retail clothing and apparel business. The Italian company's operations are extensive, and it has numerous stores throughout the Southeast Asian region. The Italian company owns several registered trade marks that protect its brands, including the trade mark 'AAA', which is registered in many countries worldwide. Indonesia is among these countries, where the mark is registered under the goods and services category in Classes 18, 25, and 35.

The trade mark registration in Indonesia under Class 25 was made in 2008. Given the proper registration, the Italian company was certain that no identical or deceptively confusing similar marks would be allowed to be registered in the same categories of goods and/or services.

It seems, however, that the trade mark examiner in Indonesia has less stringent examination criteria when comparing similarities between applied-for marks and prior-registered marks. A mark identical to 'AAA' with respect to the category of goods in Class 25 was applied for by a local individual in Indonesia in 2010. This was then published in the Trademark Gazette to allow for any opposition by third parties at that time, within the deadline to oppose.

Fortunately, the Italian company was using a 'Watch Service,' which alerts and warns companies with registered trade marks about possible identical or confusingly similar marks being published in the Trademark Gazette worldwide. The Italian company, therefore, was made aware of the publication in the Trademark Gazette by the trade mark squatter long before the deadline to oppose had expired.

Advice
The trade mark examiner in charge informed the Italian company that the published trade mark application covered the goods of, among other things, 'sarong and other Muslim attire', which are a different kind of clothing from the Italian company's registered goods—even though the application was to be registered in Class 25 as well. Thus, the trade mark examiner had approved the registration, despite the fact that the overall appearance and vocal aspect of the marks were both identical to the Italian company's prior-registered marks.

Hence, the Italian company's counsel advised that an opposition should be filed within the deadline to prevent the published application from reaching the registration stage.

In order to file a successful opposition, the Italian company had to prove the following:

  1. The applied-for mark was identical or confusingly similar to their own prior-registered mark, and the use of such a mark—even with the classification 'Sarong and other Muslim attire'—would cause confusion among general consumers as to the origin of the goods.
  2. The applicant did not have any rights or legitimate interests in the applied-for mark. The applicant filed for registration of the applied-for mark in 'bad faith', in an attempt to ride on the reputation of the Italian company's prior-registered mark.

Outcome
Fortunately, because the mark 'AAA' had been registered in numerous countries worldwide by the Italian company, the trade mark examiner was convinced that the Italian company had a better right to the mark 'AAA.' As a result, the trade mark squatter's application was filed in bad faith, and the published application was rejected for registration. The applicant did not appeal the case, which brought it to a close.

Lessons Learnt

  • Register your trade mark in any potential future markets in Southeast Asia, to cover adequate categories of goods and services of your exisiting and future product lines.
  • The trade mark examiner's examination criteria varies in each country and is subjective. Therefore, it is prudent to conduct a worldwide watch service for your trade mark, in order to stay informed of any potential trade mark squatters in each jurisdiction. Opposing a published application is far more cost- and time-effective than litigation based on an invalidation of a registered trade mark (even one based on bad faith). The litigation to invalidate the registered mark frequently needs to be brought to a court, and can cost approximately EUR 5,000–30,000, depending on the complexity of the case.
  • Trade mark owners should be constantly up to date on the evidence of use in each country, either through licensees or local distributors, so that such evidence can be easily gathered when needed.
  • With the upcoming integration of the ASEAN Economic Community (AEC), it is highly recommended that a registration is sought in all member states of ASEAN, due to a free flow of goods and services in the region.
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