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At-a-glance: Indonesia Industrial Property Office Jalan Daan Mogot KM 24, Tangerang 15119 – Banten, Indonesia Tel: +62 21 552 5388 or 552 4839 Email: helpdesk.ipdl@dgip.go.id Website: www.dgip.go.id While many consider Indonesia to be the centre... [more]

While many consider Indonesia to be the centre of economic growth in south-east Asia, one of the key restrictions to long-term development of foreign business in the country is the limited resources for complex IP infringement issues in the country. The US Priority Watch List – a list of countries with weak IP protection – states that: "The overall level of enforcement remains insufficient to address [Indonesia's] major piracy and counterfeiting problem, including...pharmaceutical products." An unreliable legal system with few sentencing guidelines, especially in criminal courts where litigation numbers are few due to overwhelming evidential requirements and penalties that do not deter infringers, continues to discourage investors.

While local counsel share similar sentiments on some of the IP enforcement problems, most admit that real improvements have been made, although they are confined to the civil courts. In Diageo North America v Stephen Rudy, the Indonesian Commercial Court entertained the idea of cancelling a registration in favour of a well-known mark in a different class of goods from the nullified mark, despite the generally negative experiences of foreign plaintiffs in previous years. Although the Trade Mark Office brought an interesting turn to the case by declaring that the mark in question – Smirnoff – was not well-known and that the goods were dissimilar, a second defendant, Diageo, was ultimately able to convince the court that its trade mark was used in bad faith. Upon the conclusion of this saga and the subsequent successes of foreign companies, including HTC, Nashua and Billabong, it became clear that preparation of evidence citing certified foreign registration and proof of fame were vital to brand owner disputes, and that these cases can be won.

One element that continues to challenge the Indonesian government is the implementation of a single, unified inter-agency database shared between Customs, police and the public prosecutor's offices. Eager to enhance transparency in the system, provide accessibility for IP owners and invite a greater number of informed court decisions, the framework of the database has already been agreed upon by key enforcement agencies in a February 2010 meeting. However, as the matter lacks priority in the public eye due to low awareness, coupled with the retirement of leading members in the government's pioneering IP task force, change in this area has yet to be seen. Requests from practitioners are also repeatedly ignored, including suggestions on the amendment of procedural guidelines to the country's IP legislation. Emphasis has been placed on improving the system's efficiency, such as the formation of an arbitration centre designed specifically to alleviate the IP dispute payload on the Commercial Court, but only time will tell if the imperfect infrastructure can be renewed.