Critical Review of the Constitutional Court’s Decision on Trademark Non-Use Provisions
Balancing Trademark Protection and Fair Legal Practice: An Analysis of the Indonesian Constitutional Court's Decision on Article 74 of the Trademark Law
The Constitutional Court's (MK) decision in Case No. 144/PUU-XXI/2023, which declared Article 74(1) of Law No. 20 of 2016 on Trademarks and Geographical Indications (Trademark Law) unconstitutional, has sparked critical discourse on the intersection of trademark protection, fair competition, and judicial integrity. While the ruling emphasizes the need for equitable legal protection for Micro, Small, and Medium Enterprises (MSMEs), it is crucial to clarify that this decision does not endorse trademark registration without demonstrable commercial use. Rather, it addresses systemic deficiencies in how trademark non-use claims are adjudicated, particularly the reliance on unverified surveys and procedural inequities that disproportionately disadvantage MSMEs.
Core Issue: Defective Evidence in Trademark Cancellation Claims
The MK's decision stems from the misuse of non-use claims under Article 74, which allowed third parties to petition for trademark cancellation based on alleged non-use for three consecutive years. Problematically, such claims frequently relied on trade surveys lacking methodological rigor and accountability. For instance:
Unqualified Survey Institutions: Many surveys cited in cancellation lawsuits were conducted by newly established entities without proven expertise or accreditation, raising significant doubts about their credibility.
Temporal Inconsistencies: Surveys claiming non-use over three years were often conducted within 1-2 months, contradicting the statutory requirement for a continuous three-year period.
Ethical Violations: Surveys frequently omitted informed consent from respondents and failed to disclose principal investigators, violating established data collection ethical standards. These practices created a legal loophole where well-resourced entities could exploit weak evidence to eliminate competitors, undermining the principles of fairness enshrined in Indonesia's Constitution.
Alignment with International Standards: TRIPS and the Paris Convention Indonesia's Trademark Law aligns with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Paris Convention for the Protection of Industrial Property, both of which recognize trademarks as instruments for genuine commercial use. Key provisions include:
TRIPS Article 19: Permits cancellation for non-use only after uninterrupted non-use for at least three years, unless valid reasons (e.g., import restrictions) are proven.
Paris Convention Article 5(C): Emphasizes that mandatory use requirements must allow for a reasonable period and consider obstacles beyond the trademark owner's control. Critically, neither instrument legitimizes cancellation based on unreliable evidence. The MK's ruling reinforces this by mandating higher evidentiary standards, ensuring that non-use claims reflect actual commercial reality rather than procedural exploitation.
Beyond "Bad Faith": Systemic Factors in Trademark Disputes
While bad faith registrations (e.g., trademark squatting) warrant strict scrutiny, the MK's decision highlights broader systemic issues:
Resource Asymmetry: MSMEs often lack the financial capacity to contest surveys or navigate prolonged litigation, unlike multinational corporations.
Ambiguity in "Use": The law's failure to define genuine use (e.g., minimal sales thresholds, regional vs. national use) creates interpretive gaps exploited by opportunistic parties.
Judicial Reliance on Flawed Evidence: Courts frequently accepted surveys without verifying their methodology, enabling unfounded claims.
The Path Forward: Strengthening Trademark Governance
The MK's decision is not a victory for non-use but a call for procedural justice. To align with global best practices, Indonesia must:
Standardize Survey Methodologies: Require accredited institutions to conduct surveys under guidelines from relevant ministries, including the Ministry of Law and Human Rights and the Ministry of Trade.
Clarify "Genuine Use": Define parameters such as minimal sales, advertising efforts, and geographic scope to prevent arbitrary non-use claims.
Enhance Judicial Training: Equip judges with tools to critically assess survey validity and contextualize non-use within Indonesia's economic landscape.
LEX AETERNA LAW FIRM's Commitment to Balanced IP Protection
At LEX AETERNA LAW FIRM, we advocate for a trademark ecosystem that balances robust intellectual property protection with fairness for all market participants. Our expertise in defending good-faith trademark holders—whether local MSMEs or foreign entities, particularly well-known marks—ensures that legal strategies align with Indonesia's constitutional values and international obligations.
This ruling reinforces our mission: to champion due process, challenge exploitative practices, and foster a legal environment where innovation thrives without sacrificing equity.
(This article reflects LEX AETERNA LAW FIRM’s dedication to advancing justice in intellectual property law while promoting Indonesia’s alignment with global standards. For tailored legal strategies in trademark disputes, contact our team of seasoned practitioners.)