Draft Bill on Trademarks: Because Identity Matters

OVERVIEWShakespeare once posed the question, “What’s in a name?” in his timeless love storyRomeo and Julietbefore going on to claim that a rose would still smell as sweet even if it was called by another name.^[1]This quote is often used to illustrate the relative unimportance of language and naming to the physical realities of life, however Shakespeare's assertion would seem to be anathema to the modern world of business. In fact, a business's name is very often one of its most valuable assets.^[2]Through names, businesses can distinguish their products from those of their rivals. More than this however, a good name also encapsulates a product’s image or a quality that strongly relates to customer preferences, and this can ultimately affect sales.An example of this mantra can be seen in the runaway success of Apple products. Created by the late Steve Jobs, Steve Wozniak, and Ronald Wayne, the Apple name has managed to grab, and just as importantly retain, a huge chunk of the market for technological devices such as computers, mobile phones, tablets, and music players.Moreover, despite their comparatively expensive prices, customers remain loyal to the Apple brand, year after year, simply because anything Apple is perceived as being of a high quality, and the name has thus ultimately come to embody both innovation and social aspiration.^[3]Closer to home, Aqua, a bottled drinking water brand located right here in Indonesia are pioneers in their field. Indeed, Aqua has reached the hallowed level of market penetration at which Indonesians now refer to all bottled drinking water simply as Aqua, while in fact there are dozens of other brands of bottled water available in the marketplace.^[4]This parallels how brands such as Hoover, Sellotape and Tannoy have become synonyms for entire classifications of products in the West.With such huge potential value as this up for grabs, most businesses spend massive amounts of money on raising awareness of their names or brands, primarily through advertising and sponsorship deals. The flipside of all of this though is that protecting one’s brands becomes hugely important. Such protection falls under the broad spectrum of intellectual property rights (“IPR”), specifically the well-known area commonly known as “trademarks”.^[5]Trademark protection differs from one country to the next and is generally a function of local laws and regulations.^[6]In Indonesia, the main legal framework for trademarks is LawNo. 15 of 2001on Trademark Law (“Trademark Law”). Although the Trademark Law is still enforced, it is now nearly two decades old and somewhat behind the times.A revision to the Trademark Law is in the pipeline however, and the Ministry of Law and Human Rights (“Ministry”) has been working on a newDraft Bill on Trademarks(“Draft Bill”) since 2012, along with its Academic Script (“Academic Script”).^[7]Essentially, the Draft Bill aims to create an improved business climate for the industrial, investment and trading sectors from the point of view of trademarks. The Draft Bill thus sets out an updated framework which incorporates many of the new developments which have come to fruition during the years of the Trademark Law regime.^[8]This has resulted in an expansion of provisions under the new framework, from 93 articles under the Trademark Law, to 103 articles under the Draft Bill.The Draft Bill is listed as part of the 2015 National Legislation Program and is currently being discussed at the House of Representatives.^[9]When it passes however, the Draft Bill will repeal and replace the Trademark Law, although many of the old implementing regulations may still apply, provided that they do not contradict the provisions set out under the new framework.^[10]PURPOSEThis edition of Indonesian Law Digest (ILD) aims to offer a comprehensive analysis of the Draft Bill, whilst comparing it with the current Trademark Law in the process. The discussion will cover the following topics and areas:a.       The scope of the trademark and geographical-indication framework;b.      Trademark rights, including the registration process, transfer of rights, and their cancellation;c.       Geographical indications, specifically as regards the registration process; andd.      Dispute-settlement mechanisms in cases of infringement.SCOPE OF THE FRAMEWORKThe Draft Bill revises many aspects of the current Trademark Law, including changing the scope of its overall framework. Currently, the Trademark Law is only focused on trademarks, while the Draft Bill has two areas in its sites: trademarks and geographical indications.[11]These two areas are discussed further below.TrademarksThe Trademark Law defines a trademark as a sign or symbol that can take form of a picture, name, word, letters, numbers, layers of color, or any combination of these elements. This sign is used to distinguish goods or services for the purposes of trade.[12]On the other hand, the Draft Bill defines a trademark as a graphical sign or symbol that distinguishes certain goods or services from each another as regards products manufactured for the purposes of trading. These signs or symbols can take the form of pictures, logos, names, words, letters, numbers, layers of color, three-dimensional features, sounds, holograms, or any combination of these elements.[13]Although the two definitions look somewhat similar, the Draft Bill expands the definition to include new types of trademark, specifically three-dimensional features, sounds and holograms. These new types of trademark are known as non-traditional trademarks.[14]In addition to non-traditional trademarks, the Draft Bill also recognizes the area of international trademark registration, in accordance with the protocol relating to the Madrid Agreement Concerning the International Registration of Marks (“Madrid Protocol”). Although this protocol has yet to be ratified, its inclusion in the Draft Bill anticipates the wave of globalization which is expected to lead to a better business climate in Indonesia.[15]Geographical IndicationsAs described in the Draft Bill, geographical indication refers to the area from which a product originates. This area’s geographical factors should have created a set of particular characteristics and qualities which are an integral part of the product itself. Geographical factors, in this case, may refer to nature, society, or a combination of both.[16]The above definition has been adapted from a similar concept set out under the current Trademark Law, which does not elaborate upon this issue in any great detail. The Draft Bill however takes the area of geographical indication far more seriously.Despite the ongoing debate into its status as regards intellectual property, geographical indication nevertheless firmly represents a given product’s identity and its importance is relevant to both businesses and consumers. From a business perspective, geographical indication offers a clear identification of a product’s origin and quality, reputation, and other essential characteristics. Businesses, as a consequence, can ensure that products that possess certain geographical characteristics will bring greater benefits to the area in question, while for the consumers, such information prevents them from being misled.[17]Due to its rich nature and culture, Indonesia has a huge potential as regards the creation of products which have geographical characteristics that may in turn be protected by geographical indications. And so if there is no regulation to protect this kind of asset, then the Indonesian market will be at a disadvantage.[18]Unfortunately however, the current legal framework does not offer sufficient provisions in this regard, and the Trademark Law only contains four articles which explicitly discuss this issue, out of a total of 93 articles.[19]The Draft Bill, in contrast, situates the concept of geographical indication at the heart of its provisions and sets out 17 articles, between Section VIII and Section XI of the Draft Bill, which discuss the following matters: