Trademark squatting is among the largest problems companies and individuals face when trying to have their marks protected in Indonesia. Various groups in the country monitor promising enterprises from Indonesia and abroad, and file applications for registration of their trademarks before the mark’s actual users do so. These groups’ only goal is to make the trademark user-pay them good money in return for the rights over the logo. Some professionals even speak of nothing less than a ‘trademark mafia’.

Why trademark squatting in Indonesia is a problem

First and foremost; the problem of trademark squatting is not exclusively Indonesian. Parties quickly trying to have a trademark registered on their own behalf which is already in use by someone else can be found in many countries around the world. Most vulnerable to such trademark squatters are jurisdictions with a ‘first-to-file’ system, where the party who first files an application for the registration of a trademark will be granted the rights over it.  

This does, at first sight, imply that it does not matter who designed, used or advertised with the trademark before the applicant filed his application for registration. Though the one who applies for registration of a mark usually is regarded as its lawful rightsholder, parties who file such applications for trademarks that are already being used by others could still risk a rejection of their application – or even a removal of their completed registration. A judge could conclude someone who applies for registration of a trademark used by another party should have realized this other party already invested his time and money in creating and advertising with the trademark. In such a case, the applicant is deemed to have filed his application in bad faith, and the application or registration will be canceled pursuant to article 77 of Indonesian Trademark Law 20/2016.

Is the possibility to claim your counterparty filed his application in ‘bad faith’ a reason not to have your trademark registered?

It can be concluded trademark users can simply start selling their goods and services under their trademarks and invest in marketing and advertising of the mark before worrying about having it registered. Leaving your mark unregistered is a bad idea though. Legal procedures against trademark squatters are long and costly processes that can easily take as long as years. Besides, the outcome is often far from certain for the plaintiff who neglected his responsibility to have his trademark registered, even if this plaintiff’s mark can be considered a well-known one.

read also: Indonesia’s new copyright law vs copyright holders

In a verdict from 2018, the Central Jakarta Commercial Court rejected American-based ABC’s demand for cancellation of the ULTRAMAN trademark held by the local company PT. Kue. PT. Kue has held the ULTRAMAN trademark in Indonesia since 1993 for the sale of food products, most notably its wafers. ABC, on the other hand, had only thought of having its ULTRAMAN trademark registered for foods and drinks around 2017. Though it was not the only reason for PT. Kue’s victory, the judges clearly stated the plaintiff’s ULTRAMAN has been famous in Indonesia as a comic character for decades, but not as a mark for cookies and other snacks.                         

Having at least filed an application for registration of the mark is a key criterium for starting a procedure in court, even if this application has been filed later than the trademark squatters. Without having filed such an application, judges can decide the plaintiff has no legal interests in this case and declare the entire case inadmissible (niet-ontvankelijk verklaard).