Legal Briefing

A recent trend in well-known mark litigation in Indonesia


The In-House Lawyer Logo

TMT | 01 December 2012

Recent well-known trade mark cases in Indonesia have revealed a somewhat worrying trend: a number, not by any means insignificant, of first instance decisions of the Commercial Court have been erratic, suffering from questionable reasoning. Many have been overturned on appeal.

This situation differs markedly from that which prevailed in the not too distant past, when the Commercial Court first assumed jurisdiction over cases concerning well-known marks in addition to its bankruptcy caseload. Then, the quality of its decisions was high, and its judgments well reasoned. As a result, there were fewer appeals.


To illustrate the recent trend, this article briefly discusses several of the recent cases dealing with well-known trade marks.

SANDS MARK

The American resort/casino operator, Las Vegas Sands Corp (LVSC), took action to cancel several Sands trade mark registrations in the name of to a local entertainment and restaurant operator.

There did not appear to be any shortage 
of evidence in support of LVSC’s claim that its Sands mark was well known. Sands Macau was already a regional attraction before the date of the defendant’s earliest application, and LVSC’s Marina Bay Sands resort in Singapore, an instantly recognisable part of the Singapore skyline, is a popular attraction among Indonesians.

There was also evidence of bad faith, in that the defendant, in one of its earlier registrations, had used a particular representation of the mark that was identical to the one used by the plaintiff. It obviously ‘wised up’ along the way and varied the representation in its later Sands registrations, but the ‘finger print’ of copying in the early registration remained indelible.

This notwithstanding, the Commercial Court dismissed LVSC’s claim on the following grounds:

  1. that the court action had been filed past the five-year deadline;
  2. the plaintiff’s Sands mark did not qualify as well-known as it was not known within Indonesia; and
  3. the Sands name was not exclusive to LVSC: there were other trade marks that incorporated the word Sands.

In relation to a), although Indonesia’s trade mark law limits the grounds on which a registration can be cancelled after the initial five-year period, cancellation on the ground of ‘bad faith’ remains available. Here, the judges conspicuously glossed over the plaintiff’s bad faith argument, not dealing at all with the fact that one of the defendant’s early registrations had been for the word Sands represented in a form identical to that used by the plaintiff. This, in itself, should have been sufficient to negate any argument that the mark had been independently conceived by the defendant. Other indications of bad faith that were ignored by the Court include the fact that the defendant had used the same Chinese name as that used by the plaintiff, even though it was not a direct translation of the English word Sands.

The finding in relation to b), the reputation of the plaintiff’s mark, seems to be at odds with earlier rulings of the court in which reputation based on overseas registrations and foreign use has been accepted – at least in cases where, as here, there was evidence of bad faith.

The plaintiff was successful on appeal. The Supreme Court granted all the relief sought, including a declaration that the plaintiff’s Sands mark was well known, and an order that the defendant’s Sands registrations should be cancelled.

GAMESPOT MARK OF 
WWW.GAMESPOT.COM FAME

This is another case in which the owner of a well-known mark failed at first instance before the Commercial Court, but succeeded on appeal to the Supreme Court.

The owner of the gaming reference and news website www.gamespot.com sought to cancel various Gamespot trade mark registrations that had been secured in the name of a local individual operating an electronic gaming retail chain under the name Gamespot.

As in the previous case, there was strong evidence of bad faith as the local squatter had initially used stylisation and graphic elements identical to those used by the plaintiff, only later changing to a different design. Curiously, this was completely ignored by the judges at first instance, whereas one would have thought it sufficient to show that the defendant’s mark was a ‘knock-off’, and not an independent creation.

The Commercial Court also rejected the plaintiff’s claim that its ’gamespot’ mark was well-known, notwithstanding evidence that Indonesian users were referring to the plaintiff’s website, www.gamespot.com, in discussions on online forums.

One of the reasons given for the court’s finding was that the plaintiff’s evidence in support of reputation was not in the local Indonesian language, but mostly in English. This ground is clearly questionable given that the plaintiff had produced evidence of an online forum discussion in Indonesian, as 
well as visits to the www.gamespot.com that clearly demonstrated awareness 
among Indonesians.

The Supreme Court found for the plaintiff 
on appeal, overturning the first instance ruling. It declared that the challenged registrations had been made in bad faith and held that the plaintiff’s ‘Gamespot’ 
mark was well known.

INTERCONTINENTAL HOTELS

In a case involving the famous InterContinetal trade mark, the plaintiff, InterContinental Hotels corporation, failed at first instance, but succeeded before the Supreme Court. The company had taken action to cancel a trade mark registration for the InterContinental in the name of a major local property developer. The mark was registered in relation to real estate services including apartment management and rental services.

At first instance, the commercial court ruled that the marks were different: there were elements that were not common to both. Further, the challenged registration was in relation to services different from those in relation to which the plaintiff used its mark.

On appeal, the Supreme Court allowed the plaintiff’s claims, declaring that InterContinental was a famous mark and holding that the defendant’s registration had been obtained in bad faith.

DIOR TRADE MARK LITIGATION

The Commercial Court is, it seems, continuing to deliver decisions of questionable quality that are likely 
to be overturned on appeal – assuming, of course, that well-known mark owners persist with the court process.

In a recent action, Christian Dior sought to cancel a trade mark registration, Baby Dior, in relation to bicycles in class 12. The registration had been secured by local Indonesian parties. The action was based on the well-known status of the Christian Dior and Dior marks.

At first instance the judges refused to cancel the registration, accepting the defendants’ explanation that Baby Dior is an independent creation, an acronym based on the Indonesian words ‘Benar-benar Ada Bagus Yahud Dia Itu Orang Riang’. The explanation was accepted, even though, literally translated, the words mean ‘really true there is good top quality he is cheerful person’, a tag line that would not make any sense to a native Indonesian speaker.

Although they found that Christian Dior was a famous mark, the judges considered Dior a generic word. They reasoned that the plaintiff did not have exclusive rights to the Dior mark, and that the defendant’s 
Baby Dior mark should be considered as 
a whole.

Given recent history, it would not be 
an exaggeration to say that this 
Commercial Court decision comes as no surprise. In this, as in earlier cases, it will be up to the Supreme Court to put things right – provided there is an appeal. Unless the plaintiff does appeal, however, it seems that exclusive rights to the Dior name may be lost, and the judicial landscape marred by yet another anomaly.

The ‘acronym defence’ raised by the defendant has interesting ramifications for brand owners.

Well-known marks, particularly those made up of combinations of letters rather than obvious words, are particularly prone to abuse. Local squatters file the same initials, but argue a different expanded meaning. For example, GS is a well-known mark owned and registered by GS Yuasa Corp for use in relation to vehicle batteries, but GS Yuasa was unable to prevent the registration of GS Garuda Sakti.

This is similar to the problem that existed in the Baby Dior case where the defendant was brazen enough to argue that Dior, being an acronym, was an original creation. As the judges apparently accepted this rather dubious explanation, it seems that, even where the mark in question is part of a 
well-known mark, it may be difficult to establish ‘bad faith’ – particularly in cases where the defendant is able, after the event, to conjure up slightly more convincing words to fit the initials.

CONCLUSION

While a good number of Commercial Court decisions are unexceptionable, there are those, as discussed above, that are almost certain to be overturned on appeal. We can speculate on the reasons. Some suggest corruption plays a part (eg an IP judge was recently jailed for accepting a bribe in a bankruptcy case); others that the judges are lacking in technical expertise (they receive only limited IP training). There are yet others who attribute the problem to a lack of resources: the courts don’t have access to much in the way of jurisprudence. Whatever the reason, the net result is that litigants can no longer be as confident 
as once they were of justice being done 
at first instance. In many cases, they 
will need to be prepared to go to the Supreme Court. There the situation is 
more reliable.

The current state of affairs is clearly not desirable. Reform is needed. In particular, when dealing with cases concerning 
well-known marks, the Commercial Court should be guided by the decisions of the Supreme Court; and its decisions should 
be made freely available online, as are 
the decisions of the Supreme Court. This would be likely to result in judges making 
a greater effort to produce carefully reasoned decisions: knowledge that a decision will not be the subject of public scrutiny can result in judges not taking 
the time to ensure that their judgments are as closely reasoned as they otherwise might be.