Indonesia’s legal system just proved its inability to protect foreign investments in the country as the Swedish furniture company IKEA recently lost the trademark to its own name in Indonesia after a Jakarta court ruled against them in a lawsuit filed by PT Ratania Khatulistiwa. The Supreme Court also rejected their appeal of the ruling, whatsnewjakarta.com reported.
IKEA, whose name is an abbreviation of “Ingvar Kamprad from Elmtaryd, Agunnaryd” (the name of IKEA’s founder and his boyhood home), lost the trademark to a company from Surabaya, PT Ratania Equator, who registered the IKEA trademark as an acronym for “Intan Khatulistiwa Esa Abadi”. The word Intan itself, is another acronym for ‘Industry Rotan’ or rattan industry. In another word, an acronym inside an acronym. After a quick research of the company, you will see that PT. Ratania Khatulistiwa was established in 1989, but somehow just recently had the idea of registering its ‘trademark’ IKEA.
the Swedish IKEA already secured a trademark certificate dated 9 October 2006 and 27 October 2010, but did not open its store until 2014. The Surabaya IKEA, which submitted their ‘IKEA’ on 20 December 2013 took advantage of the current Indonesian trademark law, a trademark could be deleted if it had not been actively used for commercial purposes for three consecutive years, and sued IKEA of Sweden in the Central Jakarta District Court to get them to give up their claims to the trademark.
It should also be noted that the Supreme Court decision was not unanimous. One of the two Supreme Court Judges, I Gusti Agung Sumanatha wrote in his dissent that the Trademark Law being used in the lawsuit should not apply to a company as big as IKEA, with a major outlet in Alam Sutera in Tangerang, which means that the Article 61 Section 2A of the Trademark Law cannot be applied. But his argument was overruled in the final decision.
People who are pointing to this as a reason why foreign companies should be afraid to do business in Indonesia seem to be jumping the gun a bit, as it appears that there is in fact a legal justification for IKEA losing the copyright. If the law says that you can lose your trademark if you don’t use it for 3 years, and IKEA in fact did not use it, then maybe they are in the wrong. We can’t know for sure without more information, quoted from coconuts jakarta.
On the other hand, it seems highly unlikely that IKEA, a multi-billion dollar international company, and its doubtlessly high-priced team of lawyers would overlook such an important detail in the trademark regulations. But then, Indonesia has some very ambiguous laws and bigger legal blunders have happened.