The General’s watch

A hot topic that has been featuring in the media (see here and here) these last few days is that of a television appearance by Indonesian Military Chief General Moeldoko on Channel News Asia.  It was noted that during his appearance, the General was wearing a luxury watch (a Richard Mille RM 011 Felipe Massa Flyback Chronograph ‘Black Kite’, worth around USD100,000).  Following the interview, questions followed about how a military officer could afford such an expensive item.  And in response the General issued a statement saying that the watch was a fake!

(General Moeldoko wearing his famous fake watch)

Although it appears that the General will successfully dodge allegations of corruption, his actions represent another step back in the context of socialisation of intellectual property in Indonesia.  With leaders showing such a blatant lack of respect for intellectual property rights, it is no wonder a significant section of the community has a similar attitude.

Buying counterfeit products is not currently a criminal offence in Indonesia, although a draft Copyright Law threatens to change this (see our post here).

Destruction ceremony at DGIP

The Directorate-General of Intellectual Property hosted a destruction ceremony on 25 April, to mark the opening of the National Intellectual Property Promotion and Central Data Cooperation Building and World IP Day.

We wrote (here) about a raid on an optical disc manufacture in Jakarta in February 2013.  A sampling of seized product from that raid, and others conducted in 2013, was destroyed yesterday.  According to our sources, the breakdown was:

• 5,091 optical discs - movies;
• 73 optical discs - software;
• 98 full and 386 empty Rajawali drink bottles;
• 4 honda power products;
• 200-300 Lacoste shirts; and
• 73 Topless plastic containers.

Destruction was carried out using a shredding machine.  At a recent seminar (see our report here) the PPNS explained that the destruction was planned as part of World IP Day (26 April) celebrations.  We understand there is a significant quantity of seized product still being stored at a warehouse nearby.

(destruction of optical discs and other seized product)

The destruction ceremony (see photo below) was held at the DGIP’s (old) offices at Tangerang, which have now (with a fresh coat of paint and looking very blue) been renamed the National Intellectual Property Promotion and Central Data Cooperation Building (see photo below). The DGIP has moved to Kuningan - see our post here.

(National Intellectual Property Promotion and Central Data Cooperation Building)

Evidence to establish bad faith

A recent decision casts doubt over the general consensus view on establishing a claim of bad faith in trademark cancellation proceedings.

In past posts we have written about commonly accepted ways of establishing a claim of bad faith before the Courts (see here and here), which are:

• where evidence shows some form of breach of trust;
• where the subject mark is similar to a well-known mark; and/or
• where the subject mark is used in a confusingly similar manner.

In Akan Enterprise Group (Sanghai) Co., Ltd. and PT. Sumbermetal International v. PT. Prima Karya Agung (35/Pdt.Sus-Merek/2013/PN. Niaga.Jkt.Pst), evidence showed the First Plaintiff and Defendant entered into a contract for the supply of pipes.  The Jakarta Commercial Court found that because the agreement was not exclusive in nature, the Plaintiffs had failed to establish to the satisfaction of the Court that there was an act of bad faith.

An alternative view - and one consistent with the general consensus - would have been that the supply agreement was sufficient to demonstrate a special relationship between the parties, from which it could be inferred that the Plaintiff was aware of the Plaintiffs’ trademark rights.  That therefore filing of the application was a breach of trust and an act of bad faith.

This first-instance Commercial Court decision is not binding on future cases (there is no doctrine of precedent in Indonesia), but is concerning because it introduces yet another element of unpredictability in prosecuting trademark cancellation proceedings.

INTA 2014 Annual Meeting

It's that time of year again, and we're preparing for another big week at INTA.

This year we'll have three SKC Lawyers at the 2014 Annual Meeting in Hong Kong - Purnomo Suryomurcito, Nidya Kalangie, and Andrew Conduit.

We'd love to meet with readers of our blog.  If you'd like to see us, please send an email to INTA@skc.co.id.

Rule of Law

An article in today’s Jakarta Globe continues discussion about the absence of rule of law in Indonesia, and the detrimental effect this has on development.

The article refers to the Rule of Law Index Report 2014 released by the World Justice Project (on 5 March 2014), and observes from the report:

• "On the judiciary corruption index, Indonesia scored 0.34, lower than Ethiopia, which scored 0.35.”; and
• “… with respect to the level of corruption in the police or the military, Indonesia scored 0.37, alongside Afghanistan, which received the same rating".

The article quotes Hikmahanto Juwanto, law professor at the University of Indonesia, as saying “Were it not for that (the absence of rule of law), Indonesia, I believe, would have been five times as developed”.  Looking to Indonesia’s South-East Asian peers, few would disagree with the premise.

The Soekarno decision - infringement proceedings

The Commercial Court of Jakarta has decided copyright infringement proceedings in the 'Soekarno' case - Indonesia's first ever application for interim injunction and subsequent infringement proceedings.

We wrote about the application for interim injunction (filed 7 January 2014) here.  Proceedings were filed by the daughter of Indonesia’s first president Sukarno, objecting to a film about Sukarno that had been screening in local cinemas.  The Applicant then filed an infringement claim with the Commercial Court of Jakarta which was decided on 10 March 2014 (HJ. Rachmawti Soekarnoputri v. PT. Tripar Multivision Plus and Ram Jethmal Punjabi and Hanung Bramantyo (93/Pdt.Sus-Hak Cipta/2013/PN.Niaga.Jkt.Pst)).  The Claim has the same case number as the Application.

In the infringement proceedings, the Court decided that the Plaintiff HJ. Rachmawti Soekarnoputri was the author of the script but not the proprietor of copyright in the film.  The Court found that the Plaintiff’s moral rights were not honoured, and awarded nominal material damages in the amount of 1 rupiah (around USD0.0001), as well as nominal immaterial damages in the amount of 1 rupiah.

The Court’s reasoning included commentary on establishing ownership of copyright in films.  The Court reasoned that in Indonesia the producer of a film is the owner of copyright in the cinematographic work.

One of the Defendant’s exceptions to the Claim was that the pleading constituted ‘obscure libel’.  This concept is often cited in defended proceedings, but not always appropriately.  The Court provided a helpful definition of ‘obscure libel’ in this decision, explaining that it refers to a pleading that contradicts itself (and incidentally found that the Plaintiff’s pleading was not an example of 'obscure libel').

This is a rare decision where the Commercial Court has offered reasonably detailed commentary - perhaps because of the media attention the case has received thus far.

Madrid Protocol

The Directorate-General of Intellectual Property (“DGIP”) recently held a public consultation on the introduction of the Madrid Protocol and Lisbon Agreement.

According to the DGIP website, around 50 DGIP officers and IP Consultants attended the event, which was hosted on 10 April 2014 in Jakarta.  

(this picture, taken from the DGIP website, shows attendees including the Director-General of Intellectual Property Ahmad M.Ramli (centre-right))

Among Indonesian IP Consultants, there are mixed views on how the introduction of the Madrid Protocol will affect the profession.  Capacity to process an expected increase in numbers of applications at the DGIP is being questioned, and private practices are bracing for a decline in numbers of locally filed applications (see our post here).

We will only see the introduction of these new systems if implementing regulations are put in place.  Historically there have been significant delays with the introduction of intellectual property laws and regulations.  One explanation for this is that the Indonesian legislature has more immediate concerns to deal with - health, education, infrastructure, etc.  However, introduction of the Madrid Protocol is part of Indonesia’s commitment to ASEAN Economic Community (AEC) harmonisation in 2015.  

The consensus view is that, ready or not, we will likely see the introduction of the Madrid Protocol in 2015.

Infringement of IP online

IP strategy for Indonesia must address the online space, where counterfeiting activity is growing exponentially.

Indonesian website indowebster.com published a series of take-down notices on its forum in February 2014, under the thread "Attention to do not upload (We got warning !)”.  The notices appear to have been sent to indowebster.com by rights holders including Adobe, NBC Universal, Lynda.com, Microsoft Corporation, Open Road Films, RML Distribution, HBO, Sony Pictures, Columbia Pictures, CBS Corporation, and Hachette UK.  That the notices were published is a positive sign, as it shows that the website has actioned the complaints.

With internet access becoming available to a wider section of the public (according to a Financial Times article, there will be 125 million Indonesian users by 2017) and online retail sales projected to increase to USD10billion by 2015 (also according to the Financial Times article) the online space should not be ignored.  Various enforcement tools are available.  Most established retail sites have take-down policies, and the economic crimes police have a cybercrime unit with which criminal complaints can be filed. 

We discussed take-downs from retail sites www.tokobagus.com and www.kaskus.co.id in our post here.

Company names

A new regulation requires that applications for registration of company names be processed electronically, through the Ministry of Law's Legal Entities Administration System.

Regulation on Procedures for Submitting Applications for Validation of Legal Entities and Approval and Notification for Amendment of Limited Liability Companies Constitutions and Information (No. 4 of 2014) came into force on 26 March 2014.  A significant change to the way in which company names are administered is the move to the electronic application system.  The criteria that must be fulfilled remain unchanged, and is set out in article 5(1) of Government Regulation on Procedures for Proposing and Using Business Names for Limited Liability Companies (No. 43 of 2011).  These include that business names:

• consist of words written in latin script;
• are not similar with the registered name of another company;
• are not the same or similar with a State institution or international institution;
• do not incorporate words suggesting the business is a certain type of legal entity (e.g. firm); and
• do not consist of words that are contrary to public order.

There is no cross-checking of company names and trademarks, despite that both registries are administered by the same Ministry - the database of company names is administered by the Ministry of Law's Directorate General of Law Administration, and the General Register of Trademarks is administered by the Ministry of Law's Directorate-General of Intellectual Property.  Further, procedures for filing objections to company names are not well established.  This can lead to conflict between brand owners and third parties that register company names similar to brands.

Where a similar company name and trademark are owned by separate entities, it may become necessary to assess what constitutes use as a trademark (an indication of origin of goods) and what constitutes use as a company name - and this is not always a straightforward task.

The Learning Farm - Planting the Seeds of Change

Here's a shameless plug for a worthy cause.  The Learning Farm, one of our pro bono clients, is doing great things for disadvantaged Indonesian men and women.  The program's mission is to break the poverty cycle through the teaching of organic farming.  And anyone interested in supporting these efforts can do so by purchasing organic veggies from the farm!

DGIP anti-corruption policy

Earlier this month, Directorate-General of Intellectual Property (“DGIP”) officials signed a statement of commitment to a policy of control gratification at the DGIP.

The blog of the Director-General of the DGIP (see here) reports that the document was signed by all officials and staff of the DGIP in front of the Director-General himself on 14 March 2014.  In summary, the statement says:

• the DGIP will not offer or make any corrupt payments or facilitation payments;
• the DGIP will not receive any such payments; and
• the DGIP will set up an anti-corruption division, where reports of corrupt payments will be received.

The photograph below (from the Director-General’s blog) shows the Director-General (far left) witnessing the signing of the statement.  Also in this photograph is the Pak Razilu (Director of IT), Pak Bambang Iriana (Director of Trademarks), Ibu Corrie (Director of Patents) dan Ibu Yuslisar Ningsih (Director of Copyright).

This is a positive step forward in tackling what is a huge problem.  Authorities have a lot of work to do to regain the public’s confidence, following a high-profile corruption scandal in the judiciary late last year (see our post here).

IPR Enforcement Seminar

The EuroCham IPR Working Group and the ASEAN IPR HelpDesk hosted a seminar today on enforcement of intellectual property rights in Indonesia’.

Special guests at the seminar included:

• Tosin Junansyah (Director Investigation at PPNS - the enforcement division of the Directorate General of Intellectual Property);
• Agung Krisdiyanto (Head of Division of Intelligence III, Customs);
• Wawrzyniec Perschke (European Commission); and
• Simon Cheetham (Team Leader of ASEAN and China IPR SME Helpdesks).

Agung Krisdiyanto’s presentation was particularly encouraging.  Having recently participated in an international training program in Shanghai, Pak Agung is full of ideas for Indonesian Customs.  These include the introduction of a recordal system, and seizure of incoming shipments of counterfeit product.  With mention of cooperation with the UNODC (United Nations Office on Drugs and Crime) and international customs agencies, these are real and workable plans - let’s hope that Customs is able to follow through and implement.

Toshin Junansyah announced that the PPNS is planning to destroy 56 tons of optical discs (more than 1 million discs) seized in raids in Jakarta in February 2013.  The destruction is planned to coincide with World IP Day (26 April 2014).  Arranging destruction is no easy task, especially with this kind of quantity.  Stringent crowd control measures will be necessary to prevent pilfering - it will be interesting to see what measures the PPNS puts in place to manage the situation.

JICA review of Indonesian Court decisions

The Japan International Cooperation Agency ("JICA") recently commissioned a review of Indonesian Court decisions in intellectual property cases.

The survey project involved JICA, the Directorate-General of Intellectual Property, the Japan Patent Office, and law firm Hermawan Juniarto.  Commercial Court cases decided between 2009 and 2013 were analyzed, with interesting results.

Notable findings included that:

• 80% of decisions related to trademark rights, 9% copyright, 8% industrial design and 3% patent;
• 85% of cases were decided by the Jakarta Commercial Court, 8 % by the Surabaya Commercial Court, 3% by the Medan Commercial Court, 3% by the Semarang Commercial Court, and 1% by the Makassar Commercial Court;
• a total of 99 intellectual property cases were filed in 2009, 111 in 2010, 135 in 2011, 107 in 2012, and 81 in 2013;
• foreign plaintiffs filed more trademark cancellation claims than did local plaintiff's (203 claims in total over the five years, whereas in comparison 114 claims were filed by local plaintiffs);
• local plaintiffs filed more of almost every other type of proceeding (trademark infringement - 48 local v. 41 foreign, trademark deletion - 18 local v. 9 foreign, copyright cancellation - 29 local v. 6 foreign, copyright infringement - 15 local v. 8 foreign, industrial design cancellation - 37 local v. 4 foreign, industrial design infringement - 3 local v. 1 foreign, patent cancellation - 11 local v. 9 foreign;
• only two patent infringement cases were filed during the five year period - one by a foreign plaintiff and one by a local plaintiff;
• in 42% of cases the Plaintiff's claims were granted in entirety, in 17% of cases granted in part, and in 41% of cases rejected;
• cassation appeals were filed in 167 of the 533 cases reviewed (first level of appeal to Supreme Court), and reconsideration appeals were filed in 28 cases (second level of appeal to Supreme Court); and
• most first-instance proceedings were decided in 3 to 4 months.

The full survey results were presented on 4 March 2014, and are available from Hermawan Juniarto.