In Indonesia, non-use cancellation is a critical tool to address trademark squatting, and offers a practical alternative to cancellation based on bad faith or well-known mark grounds. However, there are challenges that rights holders need to be aware of.
Trademark cancellation on the grounds of non-use is a complement to other grounds for invalidation, and has several advantages:
Non-use cancellation proceedings involves filing a lawsuit in the commercial court. According to Article 74 of the trademark law, an interested third party can file a lawsuit for cancellation if the registered trademark has not been used for five consecutive years since registration or last use. In July 2024, the period of non-use had been extended from three to five years, following Constitutional Court Decision No 144/PUU-XXI/2023.
A plaintiff must also prove that it is an interested party. This is usually established by filing a pending trademark application for the same mark that it seeks to cancel. An office action may be issued before the court cancellation action is resolved. Therefore, when doing so, it is important to request the trademark office to suspend examination to avoid final rejection.
The burden of proving non-use lies with the plaintiff. Here, a market survey is critical. To ensure admissibility in court, the survey must be clear, measurable and conducted by credible entities. This will help avoid legal disputes over survey credibility.
Because of the sprawling geographical spread of Indonesia, conducting a market survey usually involves a sampling of location that is roughly representative of that region. This often mean conducting a survey in the capital cities of key provinces, namely:
The agency carrying out the market survey should target the defendant or trademark holder to obtain evidence that there was no use of the subject mark. This is important, because it is common for trademark registrants to engineer use in response to a non-use cancellation.
Helpfully, in case No 17/HKI/Merek/2015/PN JKT PST, it was ruled that ‘token use’ on apparel products will be disregarded. However, the courts have not been consistent in dealing with token use. Therefore, it is important that market surveys should target the prospective defendant to pre-empt after the fact engineered use.
Certain product types may require approval before they can be sold in Indonesia. While lack of registration can be indicative of non-use, it is safer to undertake the market survey because this seems to be an established practice from case law.
| Product type | Approvals/Registration |
|---|---|
| Medicine | Marketing authorisation from Badan Pengawas Obat dan Makanan (EN: National Agency of Drug and Food Control) (BPOM) under BPOM Regulation No 24 of 2017 as revised by BPOM Regulation No 15 of 2019, No 27 of 2020 and No 13 of 2021 |
| Processed food | FDA approval under Government Regulation No 69 of 1999 in conjunction with Law No 18 of 2012 in conjunction with BPOM regulation No 31 of 2018 as revised by BPOM Regulation No 20 of 2021, and No 6 of 2024 |
| Tobacco products | Custom and Excise duty stamp |
| Telecommunication equipment (including cell phones) | POSTEL registration |
In a non-use cancellation case for medicines, submitting evidence that there was no marketing authorisation may not be sufficient. Similarly for the other types of products, evidence that there was no relevant product registration may be persuasive but is unlikely to be sufficient. The commercial court typically requires comprehensive evidence to prove non-use, as highlighted by the constitutional court’s 2024 decision.
Non-use may also be excused under certain conditions, including:
The force majeure exception was added to Article 74 of the Trademark Law through a constitutional court review of the law, when the user requirement was extended from three years to five years.
Before filing a non-use cancellation case, rights holders should therefore investigate if the particular product type is subject to any government decree that can be considered as a force majeure event.
Assessment of statistics from published decisions demonstrates the following:
Reasons for procedural objection include:
The takeaway is that the commercial court takes a strict view on procedural compliance and there is no avenue to rectify any defect.
As for cases rejected on merits, in one case, the plaintiff’s market survey report was not signed and stamped by the market research agency. In other cases, the defendant’s evidence of use of the subject trademark was accepted by the court to refute the plaintiff’s non-use assertion.
These statistics demonstrate that care should be taken in preparing the lawsuit as well as non-use evidence to pre-empt the defendant from fabricating trademark use after the fact.
The non-use cancellation route is an essential mechanism and a practical alternative for combating trademark squatting in Indonesia. It aligns with international standards while addressing Indonesia’s unique challenges (eg, vast geographical diversity and reliance on SMEs).
However, the process is not without challenges. The evidentiary burden on plaintiffs, particularly the need for comprehensive market surveys, can significantly increase costs. Plaintiffs must also anticipate potential token use by registrants and ensure their evidence pre-empts such defenses. Additionally, specific product approvals and force majeure exemptions may complicate cases, requiring thorough investigation before filing.
Despite these hurdles, the non-use cancellation route remains a versatile and effective tool for addressing trademark squatting in Indonesia's complex IP landscape. Proper preparation, including robust evidence and strategic planning, is critical to success.
This article was first published on WTR in March 2025.
