New regulation on company names is a step back for trademark owners

For some time trademark holders have struggled to find a way to cancel Indonesian registered company names which conflict with registered trademarks. Use of a company name may amount to trademark infringement, but when the name is used on different goods, or when it is used only as a corporate name, IP holders have had few inexpensive options.
In this respect, a government regulation on the application and use of company names was issued on October 4 2011 under the new Indonesian Company Law. Under the previous regulation, a company name application was to be rejected by the Ministry of Law and Human Rights if, among other things:
  • the company name had been used by another company;
  • it was similar to another company’s name; or
  • it was identical or similar to a well-known trademark.
The general notes on the old regulation stated that a company name should be consistent with the rules on well-known marks, but the problem was that Indonesian rules on well-known marks are weak. 
The new regulation no longer makes any reference to similarity to well-known marks. Now, an application for a company name must not be in use by another company or not similar to the name of another company (including the same meaning). This appears to be a step back: the only real option is now to argue that the company name copies another registered company name (thereby excluding non-invested companies).
Previously, IP holders were arguably able to challenge a registered company name that copied a well-known mark by way of a complaint to the Administrative Court. However, this was rarely done, as it was technically difficult to argue. The new regulation also provides no formal challenge system, leaving the same court option as the only open one, albeit without the well-known mark ground.  
The spirit of the previous regulation with regard to well-known marks was to avoid a bad-faith third-party company registration; although the implementation was poor and the procedure unclear, at least the article was there and could in theory be used by IP holders.
To add to the complexity, the regulation applies only to a company in the form of a limited liability company. Another form of business entity commonly known as ‘partnership’ locally is not covered by any rules at all.  
Nick Redfearn, Rouse, Indonesia

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