I. E-commerce and Trademarks

E-Commerce (electronic commerce or internet commerce), is essentially a business activity of buying and selling goods or services (product) where buyers and sellers are connected through the internet. In Indonesia, e-commerce is growing rapidly as it is becoming a trend because of the comfort online shopping provides and further encouraged by the simplicity and practicality of the system. E-commerce makes it easier for buyers, among other things, to find their necessity without having to visit the physical store and on the other hand sellers are also greatly facilitated in setting up their store as they do not need physical store to start selling their goods (or services).

However, as conveyed in the article published by Public Relations of Directorate General of Intellectual Property (“DGIP”) in November 2017 on DGIP official website (which substantially conveys that) the growth of Information Technology has negative impact on e-commerce due to lack of law enforcement on Information Technology related crime; for example, products counterfeiting which contribute to loss suffered by the national economy including brand owners. Therefore, to protect e-commerce business actors and consumers, the government has put in efforts to address any infringement or crime in relation to e-commerce field by implementing the necessary laws and regulations, one of which is Law Number 20 year 2016 on Trademark and Geographical Indications (“Trademark Law”).

II. Trademark Protection Under Law and International Treaty

Trademark is, and functions as distinguishing sign of one brand and another, as promotion tool, as a guarantee on product quality, and also to identify the source or origin of products. To obtain rights on trademark (trademark protection), trademark owner must file the necessary documents and administrative forms to apply for trademark registration and submit it to the DGIP, manually or online. The required documents and administrative forms are, among other things, identity documents, trademark ownership statement letter, power of attorney (if authorized), applicant’s signature specimen, and deed of establishment along with its Ministry of Law and Human Rights approval (if the trademark will be registered under a company name). After the process is complete, a trademark certificate will be issued as an evidence of title and is valid nationally for 10 (ten) years – extendable.

As underlined above, trademark protection is territorial. So if trademark owner also intends to obtain trademark protection outside Indonesia, the trademark owner must apply for a trademark registration for the designated country.

In light of this, Indonesian government has ratified Protocol to the Madrid Agreement on the International Registration of Marks through the Presidential Regulation Number 92 of 2017 on the Ratification of Protocol Relating To The Madrid Agreement Concerning The International Registration of Mark, 1989  (Protokol Terkait Dengan Persetujuan Madrid Mengenai Pendaftaran Merek Secara Internasional, 1989 (the “Madrid Protocol”), which means trademark owner in Indonesia may register their trademark with Madrid Protocol procedure.

The Madrid Protocol is administered by the World Intellectual Property Organization (WIPO), a specialised agency of the United Nations, based in Geneva, Switzerland. The Protocol allows applicant to obtain and maintain protection for trademark around the world by providing a user-friendly, expeditious and cost-effective set of procedures for the central filing of trademark applications and the central management of trademark registrations with effects in various countries.

The main benefit for registering trademark under Madrid Protocol procedure is that the trademark will be protected in one, any, or all of Madrid Union which has 193 member states, selected by the applicant.

For information purpose, the steps for trademark application using the Madrid Protocol is regulated under Government Regulation No 22 of 2018 on Registration of International Trademark Pursuant to Protocol Related to the Madrid Agreement Regarding International Registration of Trademarks and may be accessed through the following DGIP link: https://dgip.go.id/prosedur-pendaftaran-madrid-protocol or  World Intellectual Property Organization link in http://www.wipo.int/madrid/en/forms/.

The protection for international registration of trademark will be decided based on the substantive examination in accordance with the national law of the designated country no later that 12 (twelve) or 18 (eighteen) months since registration is accepted by the International Bureau, and the protection valid for 10 (ten) years since filing date of registration trademark (i.e. issuance of international registration (IR) by the WIPO).

In addition, the DGIP processes the Madrid Protocol international applications originating from Indonesia. Applicants are entitled to file an international application at DGIP if: (i) the applicant is a national of Indonesia, or a natural person or legal entity domiciled in Indonesia, or has a real and effective industrial or commercial establishment in Indonesia, and (ii) the applicant has a ‘basic mark’ in Indonesia, which means that the applicant’s mark has already been registered or applied for national protection at DGIP.

III. Trademarks Classifications for E-commerce

Below are a few examples of classifications of goods or services provided by DGIP which are available and suitable for e-commerce:

Class 9:

• Downloadable electronic publications in the nature of magazines, articles, brochures, leaflets, datasheets, information materials, instructional materials in the field of business, e-commerce, information technology, cloud computing, telecommunications, the Internet, business and e-commerce training, business, sales, marketing and financial management;
• Downloadable e-commerce computer software to allow users to perform electronic business transactions via a global computer and communication networks;
• E-commerce computer software that enables users to conduct business transactions electronically through a global computer network;
• computer e-commerce software to allow users to perform electronic business transactions via a global computer network;
• Etc.

Class 35:

• Provision of information services relating to e-commerce via internet;
• Provision of information and advisory services relating to e-commerce;
• Providing e-commerce platforms for retail purposes via Internet;
• Etc.

Class 38:

• Provide access to central folder electronically stored data or files used for remote consultations, and provide signal transmission services for e-commerce through telecommunication systems and data communication systems;
• Telecommunication services for the purpose of e-commerce;
• Providing access to e-commerce platforms on the Internet;
• Providing telecommunication services for e-commerce platforms on the Internet and other electronic media;
• Etc.

Class 42:

• Application service provider (ASP) featuring e-commerce software for use as a payment gateway that authorizes processing of credit cards or direct payments for merchants;
• Providing user authentication services in e-commerce transactions;
• Platform as a service (PAAS) services featuring computer software to allow users to perform business and e-commerce transactions;
• E-commerce software to allow users to perform electronic business transactions via the internet;
• Providing non-downloadable e-commerce software to allow users to perform electronic business transactions via the internet and communications networks;
• Hosting e-commerce platforms on the Internet;
• Consultancy services relating to software used in the field of e-commerce;
• Programming of software for e-commerce platforms
• Consultancy relating to the creation and design of websites for e-commerce;
• Maintenance of software used in the field of e-commerce;
• Developing and hosting a server on a global computer network for the purpose of facilitating e-commerce via such a server;
• Etc.

Class 45:

• Consultancy, information and advisory services related to identity verification and authentication, the authentication of personal identification information and documents, user authentication in e-commerce transactions, security and investigation services, the rental of equipment for safety, rescue, security and enforcement purposes, and online social networking services.

IV. Why You Should Register Your Trademark

Article 1 Paragraph 5 of Trademark Law, states that Trademark Title is an exclusive right granted by the state to the registered Trademark holder for a certain period to be utilized exclusively or to grant permission to another party (a licensee) to utilize that trademark. Of course, if the trademark is licensed to a licensee then the licensee may only utilize the trademark on mutually agreed terms and conditions with the trademark owner. The rights to utilize the trademark shall be on the owner or licensee only, meaning that any other party utilizing such registered trademark without a permission from trademark title holder or utilizing a trademark which has the same essential characteristic (shape, colour, etc) is subject to violation under the Trademark Law and may be subject to a fine of up to Rp 2.000.000.000,- (two billion rupiah) and/or imprisonment of up to 4 (four) years.

In addition to the above, below are the benefits of having trademark ownership/certificate of trademark:

1. Evidence of title of a registered trademark;
2. Grounds for disclaiming towards other party applying for the registered trademark or another trademark which has the same essential characteristic; and/or
3. Grounds to prevent other party from utilizing the registered trademark or utilizing another trademark which has the same essential characteristic.

As for having registered the trademark in a country outside Indonesian following Madrid Protocol, the protection towards the registered trademark will follow the applicable trademark laws and regulations in the designated country.

About the Author:
Jimmy Hutagalung
Jimmy is licensed as an Intellectual Property (IP) Consultant since 2012 and is a registered member of Indonesia Intellectual Property Attorneys Association (AKHKI). He is also licensed as Indonesian Advocate and an active member of Indonesian Bar Association (PERADI).

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The above is a summary prepared by Solis Advisors – Attorneys and Consultants (“Solis”), an Indonesian based Law Firm. It is only intended to inform generally on the topics covered and should not in any way be treated as legal advice or relied upon when making investment or business decisions. If you have any questions/comments on the matter set out above, or other subject(s) you wish to inquire, please contact your usual Solis contact or email us at consult@solis.consulting.