PT. PILAR INTI FITTINDO Victorious Over Non-Use-Based Cancellation Action Against Trademark HARFIT

Jakarta,February 19, 2023By

A trademark is a unique symbol, name, design, or combination of letters and numbers that distinguishes a company’s products or services from those of others. However, simply registering a trademark is not enough to guarantee its protection. To maintain the exclusivity of a trademark, it must be used in the market. If a trademark has not been used for an extended period of time, it may be subject to cancellation due to non-useby third parties who have more legitimate interests in using the registered trademark.

In this article, we’ll show you a recent case of cancellation lawsuit of trademark registration based on a non-use claim, and how the Plaintiff can successfully establish themselves as an interested third party with the right to file the cancellation lawsuit under Indonesian Trademark Law.

Background Story

PT. PILAR INTI FITTINDO, (hereinafter Plaintiff), is an Indonesian company that specialises in importing and selling hardware furniture fitting and accessories. In 2005, the company’s founder, Mr Johan Tjhin started the business by selling door-to-door imported hardware furniture fitting products to shops within the area of Jakarta, Bogor, Tangerang, and Bekasi.

He first named his business Pilar Fittindo a year later but had not yet established a company, it was only a brand for his shop and for the purpose of importing the products from mainland China.

In 2010, he created his brand HARFIT (for HARdware and FITting) with a downward-facing arrow Logo but had not registered it as a trademark in Indonesia until recent years. The brand was used as OEM Brand/Logo for the imported products.

In 2013, the downward-facing logo was revised into an upward-facing logo. And in 2015, Plaintiff was incorporated as a limited liability company under the name of PT. PILAR INTI FITTINDO.

Problem Arises

Plaintiff later realised that someone by the name LMO, an Indonesian national, (hereinafter Defendant), who was known by Mr Johan Tjhin as a salesman from another company, has registered trademark HARFIT to the Trademark Office since 15 October 2014, under Registration No. lDM000557824 for the goods in class 20 (stainless dish racks, stainless corner-hanging racks for bathroom, stainless stacking racks for kitchen).

Defendant seemed to be only scanning Plaintiff’s trademark (leaving out the logo) from Plaintiff’s cardboard container box so there was a little decrease in resolution quality in Defendant’s Trademark.

Plaintiff became aware of this when their trademark HARFIT & Logo Application No. D002015028069 filed on 30 June 2015 in class 20 (Unworked and semi-worked metal and their alloys, furniture fittings of metal, drawer handles of metal, metal hinges, drawer rails of metal, common metal alloys, grooves of metal for sliding doors, locks, furniture wheels, door latches) was rejected due to similarity with the existing Defendant’s trademark registration no. lDM000557824.

Plaintiff’s other HARFIT & Logo trademark application in class 06 which had been also filed on 30 June 2015, was successfully registered under no. IDM000578430 on 17 October 2017 without any obstacles.

Subsequently, Plaintiff has managed to register their trademark HARFIT & Logo in classes 11, 19, 21, and 27. Another application in class 20 has also been filed under Application No. DID2022059829 dated 22 August 2022 in support of cancellation action against Defendant’s trademark registration.

In the meantime, Plaintiff has also filed several trademark applications in other countries.

Cancellation Lawsuit

On 25 August 2022, Plaintiff, through their attorneys from the Office of Pulungan Wiston and Partners, filed a cancellation lawsuit to the Commercial Court at Central Jakarta’s District Court under Docket No. 86/Pdt.Sus-Merek/2022/ PN.Niaga.Jktpst against trademark HARFIT registration no. lDM000557824 dated 15 October 2014, for the goods in class 20. The lawsuit was filed against the Defendant which is LMO, an Indonesian national, and the Co-Defendant which is the Directorate General for Intellectual Property Rights casu quo Directorate of Trademark & Geographical Indications.

A. The Ground for Cancellation Lawsuit

Plaintiff based the cancellation lawsuit on the ground of Article 74 paragraph (1) of Law No.20/2016 on Trademarks & Geographical Indications which stipulates that the deletion (or cancellation) of a registered trademark can be submitted by the interested third party in the form of a lawsuit to the Commercial Court on the grounds that the trademark has not been used for 3 (three) consecutive years in the trade of goods and/or services since the date of registration or last use.

It is, therefore, within the scope of the cancellation lawsuit filed by Plaintiff, the legitimate interest of Plaintiff as the third party and the 3 (three) consecutive years of Defendant’s trademark non-use can be proven.

B. Plaintiff IS a Third Party with Legitimate Interest to File a Cancellation Lawsuit against Trademark HARFIT & Logo registration no. lDM000557824 in class 20

Although the Explanation of Article 74 paragraph (1) of Law No.20/2016 on Trademarks & Geographical Indications does not specifically regulate or define “the interested third party” who can file the cancellation lawsuit, a reference to an earlier decision by the Central Jakarta District Commercial Court No. 30/Pdt.Sus-Merek/2018/PN. Niaga Jkt.Pst, dated 10 December 2018, gives clarity regarding “the interested third party” which can be quoted as below:

“Considering that the Trademark Law does not provide an explanation of who is meant by the interested third party, the panel of judges views that interested third parties are parties who, if the registered mark is not used, will be disadvantaged or blocked from exercising their rights to use the mark;”

To prove their legitimate interest in the trademark HARFIT & Logo, Plaintiff asserts that they are an Indonesian company in the name of PT. PILAR INTI FITTINDO specialises in importing and selling hardware furniture fitting and accessories using the trademark HARFIT & Logo. In 2005, the company’s founder, Mr Johan Tjhin started the business by selling door-to-door imported hardware furniture fitting products to shops within the area of Jakarta, Bogor, Tangerang, and Bekasi.

In 2010, through a freelance graphic designer’s services, Plaintiff created their own brand HARFIT (stands for HARdware and FITting) with a downward-facing arrow Logo but had not registered it as a trademark in Indonesia until recent years. The brand was used as OEM Brand/Logo for the imported products. In 2013, the downward-facing logo was revised into an upward-facing logo.

Since 2011 Plaintiff has been using their trademark HARFIT & Logo on their import documents, bill of lading, invoices, letters, packaging, marketing and other printed materials.

To acquire legal protection for their brand, Plaintiff has also filed/registered the trademark HARFIT Logo in Indonesia in classes 11, 19, 21, and 27. And at the same time, filed/registered their trademark in other countries such as China, India, Thailand, Vietnam and European Communities. Some of the trademark applications have been registered and protected.

Based on the above facts, Plaintiff proves that they are the interested party that qualifies to file the cancellation lawsuit against a registered trademark as required by the aforementioned Article 74 paragraph (1) of Law No.20/2016 on Trademarks & Geographical Indications.

C. The Registration of Plaintiff’s Trademark HARFIT & Logo Has Been Blocked By Defendant’s Existing Trademark HARFIT Registration No. lDM000557824

It came to the attention of Plaintiff that somebody else has registered their trademark HARFIT when Plaintiff’s trademark HARFIT & Logo Application No. D002015028069 filed on 30 June 2015 in class 20 was rejected due to similarity with the existing Defendant’s trademark registration no. lDM000557824. As such, Defendant’s trademark HARFIT Registration lDM000557824 is the subject of the cancellation lawsuit.

Plaintiff views that there is a striking similarity in essence between Plaintiff’s trademark application and Defendant’s trademark registration.

D. Compulsory Use Principle of Trademark Registration

Under the aforementioned Article 74 paragraph (1) of Law No.20/2016 on Trademarks & Geographical Indications, Indonesian trademark registration is subject to the compulsory use principle. If it has not been used for 3 (three) consecutive years in the trade of goods and/or services since the date of registration or last use, then the interested parties can file a deletion or cancellation lawsuit to claim the deletion of the non-use trademark.

This principle is very important so the Law can make sure that only trademark registrars with good faith will have the exclusive rights given by the law to use the registered trademark.

E. Defendant’s Trademark HARFIT Registration No. lDM000557824 Has Not Been Used in Trade for 3 (Three) Consecutive Years Since the Date of Registration or Last Use

To prove Defendant’s non-use of their trademark registration, Plaintiff through PT Integrity Indonesia, an independent surveyor, has conducted a commercial survey or investigation regarding the commercial use of Defendant’s trademark HARFIT Registration No. lDM000557824 throughout conventional and online markets in Indonesia for the goods “stainless dish racks, stainless corner-hanging racks for bathroom, stainless stacking racks for kitchen”.

The conventional market survey was conducted among 80 furniture stores in 5 (five) major cities in Indonesia: Jakarta, Medan, Surabaya, Semarang, and Makassar. The survey reported that none of those stores had sold any products bearing Defendant’s HARFIT trademark.

The commercial survey on Indonesian online leading marketplaces such as Tokopedia, Shopee, and Lazada could only discover the selling of HARFIT & Logo products that belong to Plaintiff, and none from Defendant.

Based on the commercial survey results, Defendant has not used his trademark for 3 (three) consecutive years in commerce since the Date of Registration or Last Use, and accordingly files the cancellation lawsuit as an interested third party.

In support of their arguments, Plaintiff also referred to the Jurisprudence of the Supreme Court’s earlier decisions regarding the non-use based cancellation-lawsuits.

Plaintiff’s Claims

With all the above Plaintiff’s argumentation as stated in the case docket, Plaintiff petitioned the court (1) to accept and grant all the plaintiff’s claims, (2) to declare Plaintiff as the interested third party with legitimate rights to file a cancellation lawsuit against Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant, (3) to declare that Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant has not been used in 3 (three) consecutive years since the date of registration or last use, (4) to delete or at least to declare the deletion of the cancellation of Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant for all goods, (5) to order Co-Defendant to obey the Court’s decision and to delete Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant by removing the same from the General Register of Trademarks, and announcing the deletion in the Trademark Official Gazette as required by the provisions of the Existing Law, (6) to punish Defendant to pay all the incurred fees related to the court case.

And should the Central Jakarta District Commercial Court’s Judges have different opinions on the case, the Plaintiff petitioned for their fairest verdict (ex aequo et bono).

Defendant’s Exception

Despite having been properly notified through repeated court summon letters dated 2 September 2022 and 23 September 2022, and mass-media notice dated 22 September 2022, at the appointed date of court, Defendant failed to appear before the court without legitimate reasons and had not appointed an attorney with a power to represent them in the matter.

The judges accordingly viewed that Defendant had waived their rights to defend their case.

Co-Defendant’s Response

In their response, Co-Defendant argues that Plaintiff’s commercial survey has not revealed what is the date of non-use and what is the date of the survey, so the 3 (three) consecutive years from the date of registration or last use have not been proven.

In response to Co-Defendant’s Response, the Plaintiff has submitted their Reply dated 25 October 2022, and the Co-Defendant has accordingly submitted their Counter Reply dated 6 December 2022.

Plaintiff has also submitted evidence in the form of trademark HARFIT & Logo applications/registrations in Indonesia and other countries, official extracts of trademark registrations and assignment of rights, advertising materials, and a survey report. A witness from the investigator of the survey agency has also appeared before the court to testify about the commercial survey result and when the surveys had been conducted.

Commercial Court’s Legal Consideration

In its considerations of the lawsuit, the Commercial Court outlines two main considerations of the case as follows:

(1) Is the Plaintiff an Interested Third Party with the Right to File a Cancellation Lawsuit Against Defendant’s Trademark Registration as Provided by the Law?

Considering the following facts:

– Plaintiff’s trademark HARFIT & Logo Application No. DID2022059829 dated 11 August 2022 in class 20 that could potentially be blocked from registration due to similarity with the existing Defendant’s trademark HARFIT Registration No. lDM000557824. However, if Defendant’s trademark has not been used for 3 (three) consecutive years from the date of registration or last use, then Plaintiff can be categorised as an interested party who has the right to file a cancellation lawsuit against the registered trademark.

– The certificate of assignment from Mr Johan Tjhin to PT. PILAR INTI FITTINDO pertaining to trademark HARFIT registration no. lDM000578430 in class 06 has given a legal standing for PT. PILAR INTI FITTINDO (Plaintiff) to file a cancellation lawsuit against Defendant’s trademark HARFIT Registration No. lDM000557824.

– Considering Plaintiff’s submitted evidence in the form of trademark HARFIT & Logo applications/registrations in Indonesia and other countries, official extracts of trademark registrations and assignment of rights, and advertising materials, the Court views that Plaintiff has legitimate interest upon the registration of trademark HARFIT & Logo and can act as an interested third party to file a cancellation lawsuit against the existing Defendant’s trademark HARFIT Registration No. lDM000557824.

(2) Has Defendant’s Trademark HARFIT Not Been Used for 3 (Three) Consecutive Years as from the Date of Registration or Last Use?

Considering the commercial survey conducted by PT. Integrity Indonesia, an independent survey agency, on 18 August 2022 until 21 August 2022, and the testimony of the commercial investigator witness who conducted the survey, the Court views that Plaintiff has proven the non-use of Defendant’s trademark HARFIT Registration No. lDM000557824 from the date of registration and last use.

Commercial Court’s Decision

The judges decided in favour of the Plaintiff’s claim and to be

Granting all the plaintiff’s claims,
Declaring Plaintiff as the interested third party with legitimate rights to file a cancellation lawsuit against Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant for all goods,
Declaring that Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant has not been used in 3 (three) consecutive years since the date of registration or last use,
Deleting or at least declaring the deletion of the cancellation of Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant for all goods,
Ordering the Co-Defendant to obey the Court’s decision and to delete Trademark HARFIT Registration No. lDM000557824 in class 20 in the name of Defendant by removing the same from the General Register of Trademarks, and announcing the deletion in the Trademark Official Gazette as required by the provisions of the Existing Law,
Punishing Defendant to pay the incurred case fee in the amount of IDR 4,740,000.-

The decision was made by the assembly of judges on 9 January 2023 and read in public on 11 January 2023, in the presence of Plaintiff and Co-Defendant, and in the absence of Defendant.

Takeaways

The non-use basis for the cancellation lawsuit is regulated under Article 74 paragraph (1) of Law No.20/2016 on Trademarks & Geographical Indications which stipulates that the deletion (or cancellation) of a registered trademark can be submitted by the interested third party in the form of a lawsuit to the Commercial Court on the grounds that the trademark has not been used for 3 (three) consecutive years in the trade of goods and/or services since the date of registration or last use.

Considering that the Trademark Law does not provide an explanation of who is meant by the interested third party, the panel of judges of earlier commercial courts view that interested third parties are parties who, if the registered mark is not used, will be disadvantaged or blocked from exercising their rights to use the mark.

To prove the non-use of a registered trademark, a commercial survey conducted by an independent and professional survey or investigation agency is required with clear information about when and how the survey has been conducted.

This compulsory use principle is very important so the Law can make sure that only trademark registrars with good faith will have the exclusive rights given by the law to use the registered trademark.