ASEAN IPR SME Helpdesk expert, Cita Citrawinda, takes a look at trade mark law and implementation reform in Indonesia as it heads towards ratification of the Madrid Protocol. This post considers the challenges Indonesia still faces, and the pros and cons this presents for foreign SMEs doing, or looking to do business in Indonesia.
In order to prepare for ASEAN Economic Community (AEC) harmonization, and the conditions of free movement of goods, services, labor and capital which come with it, Indonesia is preparing to ratify the Madrid Protocol with a target to join in 2015.
The Madrid protocol (“Madrid system for the International Registration of Marks”) aims at reducing the procedural burden and costs upon applicants, and allowing effective international protection of their trade marks. As part of the Protocol, trade mark owners are able to register their brands in up to 87 countries and protect their trade mark as they expand into more markets – cutting costs for SMEs wishing to internationalise.
Challenges for Indonesia
Anticipating international applications
Although more applicants will shift from national to direct applications via the Protocol, and therefore administrative work will decline, a complete overhaul at the Indonesian Trademark Office is still required before the country joins. The Trademark Office will have to be more effective dealing with larger quantities of prosecution. What’s more, there is a huge backlog of applications, approximately 60,000 trade mark applications as of May 2013, caused by the limited number of trade mark examiners (currently 44 examiners). Under the Madrid Protocol the official examination of applications will have to be within an 18-month period, so the Trademark Office systems need to be more up-to-date, transparent, and quicker. This is crucial as the new system must be able to accommodate all international Madrid system applications. Also importantly for foreign companies, the Indonesia database itself still needs to be modified to include an English user interface and individual fees payable per class (the same for national and international applications).
Ready for the Madrid Protocol?
The draft of amendments proposes to expand the scope of protection of non-conventional trade marks by adding holograms, sound marks and three-dimensional marks. The proposed amendment does not address scents. This will most likely not be included, in part due to the difficulty in accurately and precisely describing them, and moreover only a handful of countries offer such protection.
Indonesia follows the multi-class system for registration as per the Nice Agreement (i.e. classifying the types of goods for registration), but has not yet formally ratified the Agreement; this will require simplifying the process for recordals – making it more straightforward for foreign companies familiar with the European process.
The number of new trademark applications in 2013 was 62,813, a 0.57% increase in comparison with 62,455 in 2012. This shows a leveling-off from the large year-on-year growth in applications over the previous few years (applications grew 17.4% from 2011 to 2012). While this could represent a slowing of business activity or merely a catch-up effect as more companies modernise, it’s no bad thing in allowing the Trademark Office to catch up on the long application queue.
Picking out the advantages and disadvantages for SMEs
The Madrid Protocol has a few obvious disadvantages, namely:
- International Registration will only include the goods or services mentioned, by class, in the (home country) Basic Application.
- Trade mark owners are not allowed to make any amendments to their trade marks once the application has been filed.
- Businesses are unable to get an overview of the status of the International Registration until the confirmation of acceptance by the National Offices (12-18 Months).
- If a mark is cancelled in the country of origin, the international registration will also be cancelled (for example, if a competitor successfully appeals against a trade mark).
While there are also some advantages:
- The ability to register in multiple countries with one application, one language and a lower fee!
- A fixed deadline for confirmation or refusal of registration in each participating country.
- More countries will join the Protocol in future, meaning automatically expanding coverage for SMEs who have already registered.
- The vastly simplified process of recording changes after registration (change of name, change of address, transfer of ownership, limitation of goods),…
- ….that also allows for the easy management of a trademark portfolio (i.e. trademarks can be bought and sold as if in one country).
…but how about foreign SMEs that still want to apply in Indonesia?
The international route is optional and the direct filing route still exists. Applicants would still need the services of local agents during the filing stage in Indonesia.
Dr. Cita Citrawinda is a registered IP Consultant and Mediator based in Jakarta, Indonesia. She has extensive experience in negotiating IP and technology-related transactions such as licensing, franchising and assignment agreements. Her practice is focused on IP protection, trade secret misappropriation, copyright, trademark and patent infringement matters, litigation, counselling as well as negotiating settlements, devising strategies to address and reconcile varying obstacles to protection or infringement risks between jurisdictions and has represented international and Indonesian corporations. Ibu Cita is President of the Indonesian Intellectual Property Attorneys Association (AKHKI). She regularly acts as an expert witness in IP cases in Indonesia and is also a member of the Indonesian Group Council of ASEAN IP Association (AIPA), Country Head of AIPPI and the Trade Secret Committee, Co-Chair of the Copyright Committee of Asian Patent Attorney Association and Vice-Chair of the Indonesian IP Academy (IIPA).
For more information on IPR in Indonesia, see the ASEAN IPR SME Helpdesk Indonesia Factsheet.