Indonesia extends trademark non-use period to 5 years

The Indonesian Constitutional Court’s decision to extend the trademark non-use period from three to five years is a notable development in the country’s intellectual property landscape. 

The court's ruling came after Ricky Thio, a trademark owner, filed a judicial review concerning the constitutionality of Article 74 of the Trademark Law. This article allowed for the cancellation of trademarks if they had not been used for three consecutive years. Thio faced the potential cancellation of his trademark by Zhejiang Dahua Technology Co., who invoked this article to challenge the validity of Thio’s mark based on its non-use.

Background

Trademark laws in many countries include a provision that allows trademarks to be canceled if they are not actively used in commerce for a set period of time. This is designed to prevent the hoarding of trademarks and to ensure that unused marks can be made available to others. In Indonesia, Article 74 of the Trademark Law mandated a three-year non-use period, meaning if a registered trademark was not used for three consecutive years, it could be canceled by any third party.

Ricky Thio's Case

Ricky Thio’s situation highlights the tension between brand owners who may face challenges or delays in using their trademarks and companies looking to cancel marks that are perceived as dormant. In this case, 

Thio's mark was under threat of cancellation due to the three-year period of non-use, which was challenged by Zhejiang Dahua Technology Co. Thio responded by questioning the constitutionality of Article 74, arguing that a three-year period is too short and could unfairly penalize trademark owners, especially in industries where products or services take longer to develop or market.

Court’s Ruling

The Constitutional Court sided with Thio, ruling that the three-year non-use period could indeed be restrictive and potentially unconstitutional. The court extended the non-use period from three to five years, giving trademark owners more time to develop and use their marks without the immediate risk of cancellation. 

This decision acknowledges the complexities involved in business development and brand management, offering greater protection for trademark holders who may need more time to bring their products or services to market.

Implications of the Ruling

1. More Protection for Trademark Owners: Trademark holders now have five years to use their marks before they can be challenged for non-use, offering more breathing room in developing their brand strategy.

2. Longer Time to Market: Some industries require longer timelines to bring a product to market (e.g., pharmaceuticals, tech development). The extension helps these companies maintain their trademark protection while they work on commercializing their products.

3. Impact on Trademark Hoarding: While the longer non-use period benefits trademark owners, there is a risk that it could encourage trademark hoarding, where companies hold on to marks without any intention of using them, potentially limiting the availability of desirable marks for other businesses.

4. Judicial Precedent: This case sets a judicial precedent that could affect future trademark-related disputes and encourage further examination of existing intellectual property laws in Indonesia. Other businesses may challenge aspects of the Trademark Law that they find restrictive or unfair.

5. International Comparison: Indonesia's change aligns its law more closely with some international practices, where longer non-use periods are common. For example, in the European Union, the non-use period is five years, similar to what Indonesia has now adopted.

In sum, the court’s decision underscores the importance of balancing the protection of trademark owners with the need for an efficient and fair intellectual property system that prevents monopolization of unused trademarks. 

This ruling could influence other legal challenges related to trademark use and intellectual property rights in Indonesia.