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LSM Intellectual Property Update 2017 April

LSM Intellectual Property Update
2017 April

In this edition of LSM IP Update, we cover some of the important developments in Indonesia intellectual property law and practice from recent months.

First, the long-awaited implementing regulation on marks registration, which also clarifies certain matters related to well-known marks protection.

Second, we briefly discuss the recent Minister of Communications & Informatics circular that sets out the limitations and responsibilities for user-generated content e-commerce platforms, which also contain several IP-related provisions.

Finally, we also note that the Supreme Court’s annual report picks the IKEA ruling as one of their landmark decisions.


Long-awaited implementing regulation on marks registration issued

The long-awaited implementing regulation concerning marks registration has finally been issued. Minister of Law & Human Rights Regulation No. 67 of 2016 on Marks Registration (Regulation 67) addresses several crucial issues, including the protection of well-known marks for both similar and dissimilar goods or services.

Although long overdue, the newly issued Regulation 67 is very welcome, given its significance. It provides further details on the 2016 law’s provisions concerning registration, including issues related to well-known marks ‒ particularly matters relating to bad-faith registration based on similarities to registered trademarks or well-known trademarks.

As to determination of well-known marks, in addition to several new provisions, the regulation mirrors the provisions of the 2016 law and some paragraphs from the World Intellectual Property Organization’s joint recommendation concerning the protection of well-known marks.

Similar to this, Regulation 67 provides that one of the factors in determining whether a mark is well known is the degree of knowledge or recognition it enjoys in the relevant sector of the public ‒ whether at the level of production, promotion, distribution or sale of goods or services bearing the well-known mark. The regulation then further sets out the factors to be considered in determining whether a mark is well known, as follows:

  • the degree of knowledge or recognition in the relevant sector of the public;
  • sales volume and profit gained from goods or services through use of the mark;
  • the brand’s market share in relation to the distribution of goods or services;
  • the geographical extent of use of the mark;
  • the duration of use of the mark;
  • the intensity and promotion of the mark, including investment in promotion;
  • registration or application for registration of the mark in other countries;
  • the degree of success of trademark law enforcement ‒ particularly recognition of the mark as a well-known mark; and
  • the brand value gained from reputation and quality assurance of the goods or services bearing such brand.

These factors will also be considered in determining refusal of an application due to similarities to well-known marks for both identical or similar goods or services and dissimilar goods or services.

For dissimilar goods, Article 19(3) sets out two additional requirements: the well-known mark owner’s written opposition to the application at issue and registration of the well-known mark.

Prior registration is thus paramount for mark owners if they are to argue their case against potentially infringing applications for dissimilar goods or services. Otherwise, there may be little to no basis for the examiners to deny potentially infringing applications filed in different class(es) despite any bad-faith red flags.

In the BMW BODY MAN WEAR case, the Supreme Court overturned the Commercial Court decision and declared that the local defendant had committed no trademark infringement on the basis of a 2015 Supreme Court circular. The circular maintains that any cancellation lawsuit arising from alleged essential similarities to well-known marks involving dissimilar goods or services should be dismissed given the absence of any relevant implementing regulation (under the old trademark law) for such matters.

Although Regulation 67 should end the uncertainty caused by the Supreme Court circular, brand owners that fail to register their marks and file an opposition against the offending application may stand little chance for success in litigation against infringers, as the judges will mainly consider those two requirements when deciding on the case involving dissimilar goods.


User-generated Content E-Commerce Platforms’ Responsibilities

Circular Letter of Minister of Communications & Informatics No. 5 of 2016 on Limitations and Responsibilities of User-generated Content (UGC) E-Commerce Merchants and Platform Providers (“Circular 5/2016”) provides several IP-related provisions.

First, the Circular defines the UGC platform as a platform in the form of application, internet site, or other internet-based content service used for transactions or facilitating commerce through electronic systems. Further, goods or services whose contents violate intellectual property rights are categorized as “prohibited contents”, among other things.

Although in general UGC platforms may include social network sites such as Facebook, Twitter, etc, the Circular’s definition appears to limit its scope to marketplace/e-commerce platforms, for example, Tokopedia, Bukalapak and the likes.

Under Circular 5 of 2016, some of the UGC platforms’ obligations and responsibilities include:

  • to act upon complaints or reports concerning contents, among others, (a) to examine the report; (b) to remove or block the prohibited content at issue; (c) to notify merchants that their uploaded content is prohibited; (d) to provide a facility for merchants to clarify the status of their uploaded content; (e) to reject complaints or reports if they do not actually involve prohibited contents; and
  • to observe the prescribed period of removal or blocking based on prohibited content reports (in accordance with the classification of prohibited contents). As for prohibited contents that violate intellectual property rights, the removal or blocking period is a maximum of 14 (fourteen) calendar days since the UGC platform provider’s receipt of complaint or report, which must be accompanied by the necessary supporting documents.

The Circular further provides that UGC platform providers are obliged to provide a safe, sound, and responsible electronic system and content management within the platform.

At a glance, the Circular appears to provide safe harbor protection or the conditions that may exempt UGC platform providers from secondary liability or contributory infringement in cases of infringing contents. The Circular, however, does not provide details as to when and in which instances a platform is eligible for safe harbor protection. The Circular mainly states that UGC platform providers are exempted from liability in case of (proven) merchants or users’ negligence or wrongdoing, while safe harbor-related conditions such as threshold requirements (to qualify for a safe harbor) and red flag tests (to determine whether platform providers has knowledge of infringements)—to just name a few—are absent. Given the scope of the Circular, it is probably not intended to provide comprehensive provisions on safe harbor, which hopefully will be regulated further considering its importance in determining liability in cases of IP infringements that occur in online marketplaces.


Supreme Court declares IKEA ruling a landmark decision

In the 2016 annual report, the Supreme Court (Mahkamah Agung) picks IKEA ruling (Case No. 264 K/Pdt.Sus-HKI/2015) as one of the landmark decisions.  
    
In brief, the Supreme Court affirms the lower court decision, which found that the IKEA trademark in classes 20 and 21 (covering mainly kitchen and housewares) had not been used for three consecutive years—a basis for removal from the trademark registry. For further reading please see Aga Nugraha’s Jakarta Post article on the IKEA case at http://www.thejakartapost.com/news/2016/03/04/ikea-verdict-another-bad-sign-intellectual-property-rights.html

According to the Supreme Court, there are two key legal principles in the decision: (1) Marks that have not been used by the owner for 3 (three) consecutive years since the registration date may be removed from the trademark registry, based on the result of market survey without having to take the surveyor’s credibility into account; and (2) judge’s knowledge outside the proceeding does not constitute legal fact.
    

Please contact Aga Nugraha from LSM IP Practice Group for further information or questions.
    
This Update is intended for general information purposes only and is not intended to provide, and should not be used in lieu of, professional advice. This Update is protected by copyright and no part of it may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, or broadcast through any means or medium, for any purpose by any party without our prior written consent.


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