Constitutional Court of Indonesia Extends Trade Mark Non-Use Period
In a landmark decision (Decision Number 144/PUU-XXI/2023), Indonesia's Constitutional Court has amended the trade mark law, extending the mandatory period for trade mark usage from three to five years before it can be subjected to cancellation for non-use. This change is expected to have significant implications for businesses in Indonesia, providing them with a longer timeframe to prepare before utilizing their trade marks. It reflects a broader effort to enhance the legal framework supporting intellectual property rights in the country.
Background
The court's ruling was the result of a case brought by Micro, Small, and Medium Enterprises (MSME) entrepreneur Ricky Thio. Thio challenged the existing trade mark law, which allowed for the cancellation of a trade mark if it was not used for three consecutive years. He argued that this period was too short and did not provide sufficient protection for trade mark owners, particularly small and medium enterprises (SMEs). In addition, the need to include force majeure as one of the factors to exempt from the non-use time frame was also raised, taking into account lessons from the recent COVID-19 pandemic.
The Constitutional Court's decision to extend the non-use period to five years aims to offer more stability and security for trademark holders, aligning the non-use period with the time limit for filing a trade mark invalidation claim.
This decision was influenced by the need to accommodate the specific conditions of the Indonesian economy, which heavily relies on MSMEs. The changes are intended to provide trade mark owners, especially those affected by force majeure events such as economic crises, natural disasters, and pandemics, with a chance to prepare before finally using their trade mark in the market.
Impact on brand owners
The impact of this ruling on brand owners is significant. We examine both the potential benefits and drawbacks for brand owners.
Benefits:
1. Extended Grace/Non-Use Period: The extension from three to five years provides brand owners with a longer timeframe to prepare prior to using their trade marks, which is especially beneficial for new businesses entering Indonesia, those who are recovering from setbacks, or those who are aiming to obtain defensive registrations as a preventive measure to protect their rights in Indonesia.
2. Support for MSMEs: Micro, Small, and Medium Enterprises, which form a significant part of the Indonesian economy, now have more time to establish their brands in the market without the pressure of immediate use.
3. Protection from Force Majeure: Brand owners have additional time to recover from force majeure events like pandemics, economic crises, or natural disasters without the risk of losing their trade mark rights due to non-use.
4. Encouragement of Healthy Competition: The ruling aims to foster a competitive business environment by allowing brand owners more time to innovate and differentiate their products or services.
Drawbacks:
1. Potential for Hoarding: The extended period may encourage some entities to register trade marks without the intention of using them, leading to hoarding and limiting the availability of trademarks for others.
2. Delayed Market Entry: New entrants may find it challenging to register their desired trade marks if they are already taken but not in use, potentially delaying their market entry.
3. Increased Legal Vigilance: Brand owners must be more vigilant in documenting their trade mark use or reasons for non-use to avoid legal challenges during the extended period.
4. Possibility of Overlooking Non-Use: The longer period might lead some brand owners to neglect the active use of their trade marks, which could weaken their brand's market presence and legal standing over time.
Conclusion
In conclusion, while the extended deadline offers a safety net, it also calls for brand owners to be more proactive and strategic in their approach to trade mark management. The balance between leveraging the extended period and avoiding the pitfalls it presents will be crucial for brand owners navigating Indonesia's evolving trademark landscape.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.