image credit: rizi21.wordpress.com
Indonesia’s legal system just proved its inability to protect foreign investments in the country as the Swedish furniture company IKEA recently lost the trademark to its own name in Indonesia after a Jakarta court ruled against them in a lawsuit filed by PT Ratania Khatulistiwa. The Supreme Court also rejected their appeal of the ruling, Detik News reported.
While the Swedish IKEA is an acronym of its founder and his hometown name, )Ingvar Kamprad from Elmtaryd, Agunnaryd), the Surabaya company claimed that its version of IKEA is an acronym for Intan Khatulistiwa Esa Abadi, while the word Intan itself, is another acronym for ‘Industry Rotan’ or rattan industry. In another word, an acronym inside an acronym. After a quick research of the company, you will see that PT. Ratania Khatulistiwa was established in 1989, but somehow just recently had the idea of registering its ‘trademark’ IKEA.
Initially, the Swedish IKEA already secured a trademark certificate dated 9 October 2006 and 27 October 2010, but did not open its store until 2014. The Surabaya IKEA, which submitted their ‘IKEA’ on 20 December 2013 took advantage of the current Indonesian trademark law, a trademark could be deleted if it had not been actively used for commercial purposes for three consecutive years, and sued IKEA of Sweden in the Central Jakarta District Court to get them to give up their claims to the trademark.
It should also be noted that the Supreme Court decision was not unanimous. One of the two Supreme Court Judges, I Gusti Agung Sumanatha wrote in his dissent that the Trademark Law being used in the lawsuit should not apply to a company as big as IKEA, with a major outlet in Alam Sutera in Tangerang, which means that the Article 61 Section 2A of the Trademark Law cannot be applied. But his argument was overruled in the final decision.
We think this decision is really absurd and counterproductive to President Joko Widodo’s recent claims and efforts to create a conducive climate for investors, and for many foreign companies who have invested in the country, a very harsh wake-up call.
What do you think about this latest development? Share your thoughts with our readers in the comments below.
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