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Saturday, May 7, 2016

Asics beaten in TIGER logo race in Indonesia

Image result for asics tiger logo
Asics Corporation the Japanese sportswear company has various brands including its name ASICS, its logo and variations as well as brands like the Onitsuka Tiger logo, a heritage shoe brand. In a very typical Indonesian brand piracy situation two defendants: Theng Tjhing Djie, Liong Hian Fa registered various logos in Indonesia between 1994 to 1996, which look very similar to the ASICS TIGER logo and incorporated their sub brands.  One Defendant appears to have transferred copyright in them from one to the other and they appear to have had copyright registrations too. 

The Plaintiff sued to cancel the marks claiming that the Defendants registered the marks in bad faith to take advantage of the Plaintiff’s popularity. The Defendants argued that the Plaintiff’s claim is unclear and should not be accepted. The Defendants filed a counter-claim to declare that they are the rightful owners of the logos’ copyright which are also registered in Indonesia, so the Plaintiff Asics was suing them in bad faith. 

The Central Jakarta Commercial Court accepted parts of the Defendant’s argument. In particular Asics had mixed up copyright and trademarks its its claims so the Judges rejected much of Asics' arguments. Asics filed an appeal to the Supreme Court. But this claim related to copyright too, around who first published the logo. So the Supreme Court confirmed the lower court's appeal.
Cases are frequently rejected for containing mixed claims like this. 

Asics could have filed a pure bad faith trademark case, and then a separate case to cancel the copyrights. The Defendants exploited a rigid approach taken by the law in Indonesia, and claimed both trademark and copyright to support their pirate registrations. The Plaintiff needed to deal with these separately.

Tuesday, May 3, 2016

Singapore's role in the counterfeit goods trade highlighted

Singapore is one of the world's largest ports and supposedly the world's largest transhipment port. A recent OECD report points the finger squarely at Singapore for having a major role facilitating the global trade in fake goods. As much as 2% of the world's fake goods are alleged to pass through the city state's port. Despite having a strong IP system, that protection stops at the wharves and docks. Transiting through Singapore, contributing revenues to government coffers and supporting global criminal enterprises, are millions of dollars of fake shipments. This will come as no surprise to anyone who has seen the myriad of container ships parked offshore.

The government is however unwilling to discuss the situation, preferring like an ostrich to avoid the problem. After all they earn money from each shipment that passes through and the cost of inspecting or seizing illegal goods would be very high. Unfortunately this is believed to be only the tip of a far bigger illegal goods iceberg; that counterfeits are only one category of a vast array of much nastier illicit goods that pass through country's ports each year. As the criticism mounts eventually the ostrich will need to take notice.

Thursday, April 28, 2016

The legs of a Man causes problems in Indonesia

Image result for cap kaki tiga

Singapore health drink maker Wen Ken Drug Co. Pte. Ltd is in trouble over a law suit in Indonesia. It makes Cap Kaki Tiga (Three Legs Brand) drinks, an old Singapore brand, popular in Indonesia. However the Central Jakarta Commercial Court found it nearly identical to the flag of British dependent territory Isle of Man. A British citizen Russel Vince applied to cancel the mark on the basis that it was filed in bad faith and an unauthorized use of a state symbol. The Plaintiff also requested the Court to ban production, distribution, and promotion, as well as to recall from market all drinks that bear the logo.

The Defendant argued that the Plaintiff had no legal standing, with no authority to represent The Isle of Man and no legal interest such as trademarks in Indonesia.

The Court granted parts of the Plaintiff's claim. The Panel of Judges declared that the Defendant's 49 trade mark registrations of CAP KAKI TIGA were filed in bad faith because it is similar to the flag of the Isle of Man. The Panel of Judges ordered the cancellation of the registrations but rejected the order to cease use of the mark.

The Defendant appealed to the Supreme Court twice but was rejected. They argued that the Plaintiff's claim does not fit the criteria of Article 6.3 of the Trade Mark Law because the Isle of Man is not a sovereign state and not a member of the WTO or UN.  The argument was not accepted.

There are several legal problems here - this was a cancellation action, so difficult for the Plaintiff to include infringement remedies - no wonder he failed on that part. It is not exactly clear who he is, and why the court didn’t investigate his standing further. Article 6.3 protects states or institutions. While the Isle of Man is not a state per se it is a part of one (along with many other British dependencies). Presumably Indonesia wouldn't want to start a battle on that front. However that wasn’t raised in the lower courts by the Defendant so was correctly refused as not new evidence on appeal.
The decision overall seems right - essentially national symbols will always trump privately owned IP. The Defendant will need to rebrand, which should be simple as there are other ways to show three legs.

Wednesday, April 20, 2016

Batam and the transport of illegal and counterfeit goods

Image result for batam Batam is an island 10 km south east of Singapore, part of the Indonesian Archipelago.  Recent news and industry discussions have begun to highlight Batam's role in counterfeit goods shipment (which appears frequently connected with Singapore). The Indonesian government, based far away in Jakarta, is concerned generally with illicit goods entry into Battam. It recently identified approximately 44 illegal entry points in Batam in 2016 (that is entry points for shipments which don’t pass through Customs). Indonesian Customs are increasing the their security to prevent a huge array of illegal goods entering and exiting Batam. They found 36 examples of a variety of illicit goods in February 2016 via operations at the airport, seaports, and in the local market.

Illicit goods covers a wide array of offences, including counterfeits. Customs officials have observed that imported goods frequently do not pay tarrifs/tax when entering Batam, via Pelabuhan Sekupang on passenger ships. The goods are then transported to Jakarta and other ports in Indonesia, suggesting a large passenger hand carried goods smuggling problem too. Customs officials have a hard time controlling this with limited manpower. They often face physical resistance especially they say from women who bring these goods in, with the help of porters. Newspapers unsurprisingly report widespread bribery to keep this illegal practice under wraps.

Batam and Singapore share a Special Economic Zone with no tariffs or value-added taxes imposed on goods passing between the two.  In one recent case going through Singapore's courts now, a seizure in Singapore of transshipped luxury goods from Shenzhen bound for Batam for processing and re-export suggests Batam is being used by Singapore shippers, as a route for fake goods. Singapore is already widely known as the largest transshipment port in the world, and the general suspicion is that Batam, plays a role in counterfeiting transhipment too. Many Singapore trading and shipping companies are based there, presumably because of the lower risks involved in shipping via Indonesia. 

Indonesia's weak Customs border protection is only part of the problem. Singapore trading companies' involvement makes the problem far worse, along with the relatively easy passenger access. Singapore Customs are under fire for not controlling transhipped fake goods passing through Singapore; Batam's role is a further complication.

Tuesday, April 19, 2016

Thai online infringements

  Image result for online shopping thai

Thailand's Department of Intellectual Property says that it is getting increasingly concerned about the prevalence of IP infringements on the internet. The DIP DG announced stricter enforcement to tackle digital IP infringements. Like most South East Asian countries, internet commerce has trailed the developed world mainly due to the slow take up of payment systems. That has now changed and e-commerce is booming.

However Thailand's IP laws aren't yet clear on secondary liability. While rules on copyright exist, so the DIP's concerns can be addressed easily for software, movies, music and the like. Then the urgent enforcement they want can be undertaken. But the same is not so clear for counterfeits /trademark infringements.  IP holders at present have to claim infringement on the basis of aiding and abetting under the Penal Code to take action against websites offering counterfeits. The idea is that knowledge can be proven if they have sent notices to the sites and they refuse to cooperate.

This remains a key challenge in most civil law SEA countries - specific legislation is needed to provide for secondary trademark liability.

Thursday, April 14, 2016

New internet business rules in Indonesia

Image result for internet images
The Minister of Communication and Information announced in a circular letter No. 3 of 2016 that it will issue regulations to regulate providers of mobile application/internet content providers. This proposed regulation will cover the following:

a.      Compliance with existing laws:
·         Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition
·         Law No. 7 of 2014 on Trade
·         Law No. 8 of 1999 on Consumer Protection
·         Intellectual property rights.

b.      Filtering of content in accordance with Law No. 44 of 2008 on Pornography, and related government regulations.

c.       Censoring of negative content under Minister of Communication and Information Regulation No. 19 of 201412 on Controlling Internet Websites Containing Negative Content.

d.      Use of Indonesian legal entities for receiving payment through "national payment gateway".

e.      Use of Indonesian Internet Protocol (IP) addresses.

This latest attempt to regulate internet operators is believed to help tax revenue collection targeting at payment flow to internet businesses outside Indonesia. Indirectly it seeks to localize online operations.

The regulation is likely to impact on foreign based websites which receive payments from Indonesian users. The major global Internet companies maintain limited local presences in Indonesia, with activities limited to marketing.  Lack of legal certainty is the common excuse by internet businesses for not establishing in Indonesia important business functions such as payment processing.  it is common for these businesses  to use nearby Singapore to process payments. As businesses are required to comply with proposed requirement for receiving payment within Indonesia, the tax authority will be in a better position to trace and audit such receipts which hitherto were channeled out of Indonesia.   The proposed regulations probably also have in mind UBER and GRABBIKE transportation apps that have been in the media spotlight due to conflicts with existing transport businesses.

Previous attempts to regulate internet businesses did not progress very far.  In 2014, the government issued  a set of draft regulations to regulate internet operators. Businesses opposed these draft regulations because of overly prescriptive rules such as the need for certification, registration and locating of data centres in Indonesia.  These regulations never passed. 

Online businesses will need to monitor the language of the latest proposed draft regulations when issued to better understand their impact.