“Much like Mark Twain, reports of IKEA’s death in Indonesia have been greatly exaggerated. Over the past week or so, it has been widely reported that due to a recent Supreme Court decision cancelling two IKEA trademark registrations for non-use, Inter IKEA Systems B.V. had ‘lost its rights to the IKEA trademark in Indonesia to a local company’ and ‘would have to change its name’. Yet IKEA’s flagship store on the outskirts of Jakarta remains open for business as usual. Fittingly, this story requires a little self-assembly and as is often the case, the truth lies somewhere in the middle—here, between the initial erroneous reporting that was repeated with little independent fact-checking and the smart portfolio management by IKEA itself that turned this episode more into a public relations headache than an IP disaster. What’s more, the decision, while certainly not in IKEA’s favor, could actually be beneficial for foreign companies in Indonesia going forward, by providing them with another tool to fight the ongoing problem of trademark squatting.
First a discussion about the anatomy of the case. Well before Inter IKEA Systems B.V. opened its inaugural store in Indonesia, it filed on January 25, 2005 applications for its IKEA trademark in Indonesia, covering Class 20 and 21 goods. The Class 21 application was registered on October 09, 2006, while the Class 20 application was only registered some four years later, on October 27, 2010. Perhaps as a result of previous trademark litigation in Indonesia, it appears IKEA became aware that its original two registrations had become vulnerable to non-use cancellation. As such, it filed new applications in March 2012. These applications were successfully registered in September 2014. However, in the meantime, on December 20, 2013, a local company named PT. Ratania Khatulistiwa filed two applications in Classes 20 and 21 for the mark “IKEA INTAN KHATULISTIWA ESA ABADI” and four days later filed a lawsuit with the Central Jakarta Commercial Court to cancel the original two IKEA registrations based on the non-use provisions of the Indonesian Trademark Law.
Based on a literal interpretation of the Trademark Law’s non-use provisions, the decision appears to have a sound basis in law: while IKEA’s two original applications were registered in October 2006 and 2010, the first IKEA store selling Class 20 and 21 goods did not open in Indonesia until October 2014, with no ‘acceptable reason’ to excuse the non-use. Interestingly, the Supreme Court’s ruling was a 2-1 decision, with Judge I Gusti Agung Sumanatha filing a rare dissent, arguing that because IKEA had proven that it was the owner of a legitimately registered well-known trademark, the non-use provisions should not apply. While not explicitly supported by the Trademark Law’s text, Judge Sumanatha’s dissent speaks more to the spirit and purpose of the Law and is a welcome development. Troubling, however, is that both courts ruled PT. Ratania’s applications for the mark “IKEA INTAN KHATULISTIWA ESA ABADI” were “legitimate” (“sah”). Such a ruling is as unclear as it is unnecessary and ignored clear evidence presented during the trial that PT. Ratania knew about IKEA prior to filing their own applications, strongly implying that the applications were impermissibly filed in bad faith. While the courts’ unclear language and meaning likely lead to the confusion in reporting on this case, neither the Commercial Court nor the Supreme Court said that PT. Ratania is now the true and legitimate owner of the IKEA mark in Indonesia.
It is unclear at this time whether IKEA has already filed or will file one last appeal for reconsideration, as is its right. Regardless, this
The Indonesian IKEA case: what happened and why it might actually be good for foreign companies Reviewed by Neil Wilkof on Friday, February 19, 2016 Rating: