, which is published by the American Chamber of Commerce. The topic was risk management in the IP sector. A pretty dry topic for most (unless you're an IP lawyer), but here goes...
What are the major risks or obstacles to protecting intellectual property rights (IPR) in lndonesia? It is probably going to sound down-right obvious but I think the main obstacle and the main risk is assuming that, because IPR laws exist in Indonesia, the regulatory environment surrounding IPR is the same here as anywhere else. But it's not. In some respects, the laws and the principles are all the same. On the face, things look the same but it doesn't take long, you don't have to whittle down too far, before it becomes very, very different. That's probably the most significant risk. If you don't understand those differences, then you can find yourself with no IP protection despite all the money you have spent registering trademarks, designs and patents.
What are the most common risks faced by your clients? The most common risk is from trademark piracy, the use of well-known marks. Here, a trademark cannot be enforced unless it is also registered. It means you really do need to go through the act of registering all your trademarks and all your rights here basically. The biggest problem we encounter here is people knocking-off products, both famous and ordinary brands, because they can. Often because the owner of that brand hasn't realized they have to do something proactively in terms of registering their trademarks here.
Once they are registered, do you find that there are still problems with Iitigation or implementing regulations? It's challenging. When I came here four years ago it was virtually impossible to do enforcement or indeed litigation because corruption was a bigger issue then than it is now. You really need people who know what they are doing. And you need to have a long-term strategy. You can't jump in and when you encounter a problem, expect to immediately resolve the issue and then return to business as usual. If you are going to try to take action, doing enforcement, etc. then you need to be looking at a long-term strategy rather than a quick fix.
Rouse has been active in lndonesia since 1997. How has protection of IPR changed over the last 13 years? It has improved significantly. Particularly in the last two years, both the quality of the police and the understanding of IP in the courts and by the police has improved a lot. The IP office here, the Director-General of IPR, has been very active in promoting IP awareness with government agencies. It's still not perfect but it has improved. I suppose in the last year, one of the more significant changes is that the various ministries and government agencies that are responsible for IP enforcement have become self-aware. They are aware of the problems, and that's half the battle. Once you are aware of it and you acknowledge it, then you can plan to overcome it. So I think progress is going to get much better very quickly in the next year to two years.
Where do you think lndonesia needs to go next in order to continue improving IPR? Indonesia needs to communicate better. I think the biggest challenge they have, and the government realizes this, is actually coordinating the various agencies and ministries, etc. to be able to present a picture, a story, that shows that progress is being made, and communicating this to international agencies, to the U.S. Trade Representative, to the European Commission, for example, to show that although they might think IPR issues aren't being addressed, there is in fact some progress. That's a big task and once that happens, I think then it's really got nowhere else to go but to continue improving. It's really now about perception and pulling the loose strings together to get the momentum building.
Was Indonesia been reaching out to international partners to provide advice on how they continue with improving IPR? They do. They have very strong relationships with the Japanese government. The Japanese IP office provides a lot of support and advice. The Australians do as well. IP Australia provides training and swap programs. There's a lot of interest from other countries bur those are probably the two countries that are most active in providing direct support.
How does the environment for IPR differ between lndonesia and Asia in general? ln terms of the Asia region generally, it really isn't that different. In my experience, similar issues come up in each jurisdiction. It's sort of like when you look at a music equalizer on an amp. There are the same issues in each country, just a different mix, some factors are stronger than the others. And that can fluctuate according to time.
Do you think the IPR issues in Indonesia have deterred investment or, due to similarities in the region, these issues have had little effect on determining where to invest? Not so much lately, but previously, absolutely. Intel was looking to open a chip fabrication plant and lndonesia was very quickly dropped off the list because of IP. Eventually they built a $2 billion fabrication plant in Vietnam. So, yes I think so. The more serious risk now is that lndonesia becomes an export point for counterfeit and pirated goods rather than just a domestic market.
What advice would you give companies to better manage risks to their IPR? Be very careful. Be slow. Don't rush anything. And get a really good understanding of the situation in the country and how IP works before you launch with exports, with new services or opening a presence here. Have a good understanding of that. I suppose that's just good business advice for anyone really. I find myself often saying "just have an open mind". Be open to different strategies. I sometimes hear the word "kooky" - something that might seem unusual, that you wouldn't dream of doing in your own developed jurisdiction. Be open to those possibilities because they do often work here. Also, I think if you are really committed, be prepared to be a bit of a pioneer as well. There are opportunities to drive progress and drive change here. That's our goal. That is one of our missions here - to improve the general IP environment. To actually improve the environment for the industry and for the IP sector. We are always looking for people who are prepared to push the envelope a little bit because it works. Engage the government, test judges a little bit, talk to the IP office, just try things a little bit differently.
What issues should AmCham tackle as an organization that represents US businesses here and how can they best do this'? I think what is very, very useful is the connection that AmCham provides to the U.S. Trade Representative (USTR). It really helps. I don't know if it's more so here than any other country, but the U.S. Trade Representative has a lot of impact on people here. When the USTR says something negative, people get really disappointed. The reason I mention this is because I want to point out that people take notice. The Trade Representative is always looking for practical examples of things that can be done, that are practical, sensible, realistic and achievable. There is a real opportunitty for American businesses to help develop the IP environment themselves. I think that's the number one thing, that connection. In terms of other things AmCham can be doing, continue to provide counseling. What they do right now is fantastic, which is provide a contact point, a sounding board, access to resources, access to Rouse and other consultants, help with access to the IP office and ministries, etc. So it works both ways.
Are there any cases you can cite that exemplify the challenges to protecting IPR in Indonesia, especially with regards to Iitigation, enforcement, etc? One is a very simple case that we just finished last year of pushing the envelope a little bit to see if we could develop the law a little further. Black Diamond, an Australian company, makes buffing pads for polishing cars. Their product was being completely knocked off here in lndonesia, right down to the packaging with the "Made in Australia" label on it. The pirate that was making these products had applied to register the trademark. The trademark office ended up rejecting the trademark application. But this rogue then turned around and sued the trademark office for wrongfully rejecting his mark and also sued the Australian company. It was nonsense really. In the end, our client turned around and sued him for trademark infringement. What was unusual about this case is that the court Iet our client do so. It was the first time that the Commercial Court has allowed a counter-claim like this. They won the case. The cancellation of his mark was upheld and he was ordered to pay $20,000 in damages. This doesn't sound like much but it is a massive damages award, the second highest for an IP case so far in Indonesia.
Although I can't mention the company, there is another really good example to give you an idea of how different it is. What has historically happened here over time is the registration of descriptive trademarks. An example of a descriptive trademark is "Apples" for apples or "Tea" for tea. Anywhere else in the world, you can't register these because a trademark stops people from using that word to describe their product. Over time, the practices of the Trademark Office have changed. They used to treat English words as having no meaning. You didn't look at English words and go "ah, well that means whatever it means in Indonesia". They would simply just look at it and say "that's an invented word" even if it was obvious to an English speaker that it was not. That has changed over time but what's happened is you now have all these descriptive marks that the Trademark Office would now reject but, because they are there and they continue to be renewed, they still cause a bit of a problem. We had an American client that had a problem with one of their products. For the sake of the story, Iet's just say it was chocolate and they had called their product "All American Chocolate". A big Indonesian company had registered and was using "Chocolate". The Indonesian company threatened them with an infringement action which is just ridiculous. Rather than these two competitors going head to head, the American company just decided to go with a different name in the end. It's a really good example of just how different it really is and how prepared you have to be to encounter things that are quite unusual. Trademarks last for 10 years, and if you renew a mark, there is no examination or ability to cancel the mark. The government is very strict ruIe-of-law here. They follow rules down to the word. There is no bending the rules. There is no ignoring cases, which might surprise people here. Even the Trademark Office acknowledges they are kind of stuck. They do their best to try to work around it, but at the end of the day, the law is the law, and until that changes, there is nothing they can do about it.
