TEMPO.CO, Jakarta - One 'bogeyman' for entrepreneurs in Indonesia is the lack of legal certainty. Businesses must not only deal with constantly changing regulations, they must also accept court rulings in trade disputes that are often unjust. The finding against Inter Ikea, a world-class furniture company from Sweden known as IKEA, in its legal battle with Ratania Khatulistiwa, a furniture company from Surabaya using the brand ikea, at the appeals court is the latest example.
It is essentially a simple matter: a difference in the interpretation of a 'dormant' brand. Ratania filed a lawsuit against IKEA at the Jakarta district court in December 2013. The subsidiary of the Kedaung Group from Surabaya held the view that the IKEA label for class 20 items (accessories, mirrors, picture frames and items made from wood and rattan) and class 21 items (household goods from pottery) had expired. Ratania asked for these items to be removed from the directorate-general of rights over intellectual property's list of items.
When it claimed that the IKEA label was 'dormant', Ratania cited Article 61 of Law No. 15/2001 on brands, which states that items can be removed from the list of brands if a label has not been used from three consecutive years from the date of registration.
If the panel of judges had simply looked at the date the patent was registered, the ruling against IKEA would have a stronger basis. Inter Ikea registered the trademark IKEA for class 20 items on October 27, 2010 and for class 21 items on October 9, 2006. This means that the IKEA brand for these two categories of goods, despite being registered, fell dormant after three years. Ratania then registered the ikea trademark on December 20, 2013.
But Ratania's argument is weak. In court, IKEA produced evidence in the form of sales invoices for the 2006-2013 period, clearly disproving the claim that the brands were dormant. IKEA sells products in Indonesia online, and also through two local distributors, Karya Sutarindo and Findora Indonesia. In October 2014, it opened an outlet in Alam Sutera, South Tangerang. The directorate-general of rights over intellectual property was clearly in the wrong when it allowed the registration of the ikea trademark.
The appeals court judges should have corrected the directorate's decision to accept the registration of the ikea trademark. IKEA products were clearly registered beforehand. Ratania was three years too late. According to Article 6 of the trademark law, the registration of the ikea brand should have not been allowed because it 'has basic or overall similarities to a trademark owned by another party that had been previously registered for the same type of good or service'. It also 'has basic or overall similarities to another trademark known to be the property of another party for goods and/or similar items'.
The ruling in favor of ikea seemingly adds to the lack of clarity over the legal basis for previous rulings. The dispute between IKEA and IKEMA, again between Inter Ikea and the Kedaung Group, also went to the appeal stage. The result was truly bizarre. In January 2013, the panel of judges allowed the IKEMA brand to be used for category 19 items in the form of pottery and tiles. But in April of the following year, the Supreme Court refused to allow the use of the IKEMA brand for category 20 and 21 items.
The appeal court judges should have used the same logic as Justice I Gusti Agung Sumanatha, who expressed a dissenting opinion. The judges should have favored the brand that had been legally registered and is a well-known brand that must be protected. (*)
Read the full story in this week's edition of Tempo English Magazine
