Confusion Over IKEA Trade Marks in Indonesia

There has been some confusion about the implications of a recent decision of the Indonesian Supreme Court relating to trademarks registered in Indonesia by IKEA, the Swedish and famous flat-pack furniture company.

The Supreme Court decision was handed down in 2015 although the decision was not widely reported until February 2016.

Background

IKEA registered trademarks for IKEA in Indonesia in 2006 (in class 21, which covers household and kitchen utensils) and 2010 (in class 20, which covers furniture), despite not carrying on business in Indonesia at that time. These trademarks can be referred to as the Earlier Marks.

Indonesian Trade mark Law states that a trade mark can be cancelled and taken off the register if it has not been used in trade for relevant goods and/or services for at least three consecutive years from the date of registration or last use, unless there is an 'acceptable reason' to the contrary.

It would appear that IKEA was aware of the non-use provision, as despite still not having a store in Indonesia, IKEA filed new trademark applications in 2012. These trademarks can be referred to as the Later Marks. IKEA's Later Marks were successfully registered in 2014.

IKEA opened its first store in Indonesia in 2014.

Non-Use

In Indonesia, trademark cancellation proceedings are classed as civil litigation as opposed to administrative proceedings (as they are in the UK – before the UK Intellectual Property Office).

Prior to the registration of the Later Marks, an Indonesian furniture company called PT Ratania Khatulistiwa (Ratania) filed applications in classes 20 and 21 for the mark "IKEA INTAN KHATULISTIWA ESA ABADI", and subsequently filed for the cancellation of IKEA's Earlier Marks. Ratania claimed IKEA had not used the earlier marks for three consecutive years after registration.

The Supreme Court's decision affirmed the earlier decision of the Commercial Court that IKEA's Earlier Marks were invalid on the ground of non-use.

What are the implications for IKEA in Indonesia?

Some sources reported that IKEA would be required to change its name in Indonesia as a result of the Supreme Court ruling. That is incorrect. The Supreme Court ruled that IKEA's Earlier Marks were invalid, but IKEA had pre-empted this issue by re-filing applications in 2014 – the Later Marks, which are valid and subsisting.

The Supreme Court also held that Ratania's applications for the mark "IKEA INTAN KHATULISTIWA ESA ABADI" were "legitimate", although the legal implications of this are unclear. Experts on the IPKat blog described this as "Troubling" and "unclear", on the basis that Ratania's applications were likely filed in bad faith because they knew of IKEA at the time of registration.

Despite the legal confusion surrounding the decision, IKEA's flagship store near Jakarta remains open for trading as usual. This case exemplifies the importance of effectively managing a trademark portfolio with a view to renewal dates and vulnerability for cancellation or invalidity.