Why Trademark Registration is Important to A Business Owner?

Why Trademark Registration is Important to A Business Owner?

By: Ni Ketut Supasti Dharmawan

Tuesday, 24 June 2020

No doubt everyone who opens a business, whether small businesses (ranging from Balinese traditional culinary business like Nasi Lawar Bali to places like a trendy coffee shops with increasingly fierce competition) or Balinese traditional clothing businesses, they usually give names to the business. For example, Nasi Lawar Bali Men Rame, Lezzatto Coffee, and Luwih Pisan Busana. These businessmen know that the name they use for their businesses is called “Trademark”. However, perhaps not all of them know that such trade trademarks must be registered. Why a trademark must be registered? What if a trademark not registered?

Businessmen want their business to run smoothly, profitably, sustainably, and be known by consumers. In brief, they have “business reputation”. For this matter, it would not be enough to only pay attention to the economic aspect. They should also understand the legal aspects as much as possible for their businesses to be safe and protected. One of them is the importance to understand trademark protection from a legal perspective. In Indonesia, the trademark is governed under Law Number 20 of 2016 on Tradetrademarks and Geographical Indications (Law No. 20/2016). For a trademark to get legal protection, it needs to have such a distinctive character when using it in trading goods and/or services. Such legal protection is given on a registration basis and first to file system. This means every trademark owner is obliged to register his/her trademark to be protected. Furthermore, this legal protection is given to the first registrant of a trademark. In other words, whoever registers the trademark in the first place, then that party gets legal protection. In reality, there is a possibility where the person who first registers the trademark is not the owner of the trademark who uses it for the first time, instead, he is just another party who later uses the trademark and then register it to the Directorate General of Intellectual Property. In this case, the party who gets the protection is the first party to register the trademark. Therefore, business trademark owners need to understand the prevailing trademark Laws and Regulations. To be protected, they must register their trademarks as regulated under Article 1 number 5 and Article 3 of Law No. 20/2016.

Registered-trademark owners will have exclusive rights to their trademarks and will receive protection for a certain period of time. If they do not register their trademark for their businesses, they will not have an exclusive rights to the trademark. Please do not blame if, in the future, another party who registers it by using the first to file system, he/she will own such exclusive rights. Moreover, he may sue the real owner of the trademark under the use of the registered trademark claim which will potentially harm the trademark registrant. If such a situation occurs, of course, it will be very unfair for the real owner of the trademark. Unfortunately, there is nothing can be done to fix it. As the Laws and Regulations already regulate that the one who will get the protection is the first registrant and not the first user of the trademark. That is the reason why business trademark owners are obliged to register their trademarks. Trademark registration is important so that a trademark is not used by an unauthorized party who may become backfire for the real owner of a trademark.

Article 1 (5) of Law No. 20/2016 in detail regulates that, “Right on Trademark means the exclusive right granted by the State to a registered Trademark owner for a definite period to use his/her Trademark or authorize others to do otherwise.” Thus, to get protection, trademark owners (including businessmen in the MSMEs group) must register their trademarks. Trademark protection is also related to trademark functions such as: preventing other parties from using it without permission; differentiating goods and services; trademark reputation; and promoting the goods and services.

What can be used as a distinctive character for a brand in order to be different from other parties' trademarks of goods and/or services? It is noted based on Article 1 (1) of Law No. 20//2016 that mark means any sign capable of being represented graphically in the form of drawings, logos, names, words, letters, numerals, colors arrangement, in 2 (two) and/or 3 (three) dimensional shape, sounds, holograms, or combination of 2 (two) or more of those elements to distinguish goods and/or services produced by a person or legal entity in trading goods and/or services. In terms of trademark dimension, the distinctive character actually means a party must not imitate the signs that have been used in a business trademark. In other words, a party mus not imitate or resemble the other party’s trademark. In order to get protection, a business trademark must be different from the registered trademarks that have been used previously in the goods and/or services business activities. Hence, if you want to build a developed business that does not stumble over the affairs of counterfeiting other parties’ marks or piggybacking famous marks of other companies, then the businessmen must choose one of the distinctive characters as specified in Law No. 20/2016. When developing a T-Shirt business, I chose to use the “name” element as a distinctive character. Therefore, for example, I use “TuTPasTi” which comes from the abbreviation of the name Ketut Supasti as a trademark for my T-shirt business. Once we have decided to use “TuTPasTi” as the trademark for the business, please make sure we already did the online checking in the first place on whether such a trademark already registered under the same name by the other party or not. We can make our trademarks and trademark those with the quality of goods and services that we produce. So please do not imitate other people's trademarks, especially those trademarks that are already famous, because it can lead us to deal with registered trademark infringement.

What are the procedures of a trade trademark registration so that it will be protected under the law?

Based on Article 4 of Law No. 20/2016, application for trademark registration must be submitted electronically or nonelectronically to the Directorate General of Intellectual Property in the Indonesian language. In more detail, the application for trademark registration must fulfill the following requirements: it must state the date, month, and year of application; full name, nationality, and address of the applicant; full name and address of proxy if the application is filed by his/her proxy; color(s) if the trademark being applied for registration use color elements; country and date of basic trademark application if the application is filed using Priority Right; class of goods and/or services as well as a description of types of goods and/or services; and no less important is that the application must be signed by the applicant or his/her proxy. In addition, such an application is supplemented by trademark representation and receipt of payment of a prescribed fee. The trademark label must be made in the form of JPG file format, resolution of 300 DPI, and a maximum length of 9 cm and a width of 9 cm.

A successful business is a smooth and sustainable business from both the economic and security of legal protection aspects. One of the many business protection aspects is trademark registration. Please protect trademarks that are used as business markers through trademark registration. Last but not least, please be noted that the registered trademarks also have the potential to grow into a franchising business that can develop globally.

-Supasti, mid-June 2020-