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The recognition of a trademark can determine the success of canceling a trademark that has actually been registered earlier in the territory of Indonesia. This was demonstrated by Starbucks Corporation against Sumatra Tobacco Trading Company (“STTC”), one of the local conglomerate companies. In October 2023, STTC filed a Judicial Review of a Cassation Decision that was unfavorable to them; however, their submission was rejected by the Supreme Court.

It all started in July 2021, when Starbucks Corporation filed a lawsuit against STTC at the Central Jakarta District Court for making cigarettes bearing the Starbucks trademark. Starbucks Corporation posited that STTC registered the Starbucks trademark in class 34 under No. IDM000342818 for its cigarette products in bad faith, as it bears a substantial resemblance to Starbucks Corporation’s well-known trademark for its outlets and coffee shops. In general, cancellation against trademark registration only has 5 years limitation commencing from the registration date. However, Trademark Law provides an exception where any cancellation lawsuit may be filed at any time if the trademark application was made in bad faith and/or the trademark contravenes the State ideology, laws and regulations, morality, religions, decency, and public order. In this case, the Commercial Court Panel of Judges dismissed Starbucks Corporation’s, under Central Jakarta District Court Decision No. 51/Pdt.Sus-Merek/2021/PN Niaga Jkt.Pst, owing to the fact that STTC had registered “STARBUCKS” mark in 2011 in compliance with the legal requirements and Starbucks Corporation had failed to prove the element of bad faith before the Court.

Civil law countries, including Indonesia, adhere to the First-to-File system. In this system, it is not determined who first used the trademark; instead, the owner is established based on the party who first submits the application for trademark registration at the Directorate General Intellectual Property (DGIP), despite valid evidence indicating prior use. This principle played a significant role in the District Court Judge’s decision to refuse Starbucks Corporation’s lawsuit against STTC concerning the STARBUCKS trademark. STTC filed the trademark for registration on 20 December 2011, predating Starbucks Corporation’s filing of the trademark for ‘STARBUCKS’ in class 34 on 10 June 2020.

Starbucks Corporation then filed an appeal against the aforementioned decision before Supreme Court in early 2022. Starbucks Corporation argued that its trademark is a well-known trademark because it has been registered in various countries and has opened many outlets in various countries. At the cassation level, the judges considered the Starbucks trademark as well-known, given its registration in various countries and extensive promotional activities. It is a public knowledge that Starbucks Corporation is a coffee shop that has many branches and is famous not only in Indonesia, but almost all over the world. The judges noted a substantial resemblance between the Starbucks trademark used for STTC’s cigarette products and Starbucks Corporation’s coffee trademark, encompassing shape, arrangement, and the number of letters. Moreover, the Court identified similarities in sounds and utterances, leading to the conclusion of bad faith, as it capitalizes on the notability of the Starbucks coffee trademark owned by Starbucks Corporation. The cassation decision was decided under No. 836 K/Pdt.Sus-HKI/2022 invalidating the “STARBUCKS” mark with registration number IDM000342818 in Class 34 owned by STTC from the general trademark list, with all legal consequences. The Supreme Court declared the “STARBUCKS” trademark owned by Starbucks Corporation as a well-known trademark. STTC objected to the cassation decision and filed a judicial review against the decision. The Supreme Court rejected the judicial review under Supreme Court Decision No. 48 PK/Pdt.Sus-HKI/2023.

Protection related to well-known marks globally is regulated in the Paris Convention for the Protection of Industrial Property (“Paris Convention”) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”). Article 6 bis paragraph (1) of the Paris Convention states the countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a trademark considered by the competent authority of the country of registration or use to be well known in that country as being already the trademark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the trademark constitutes a reproduction of any such well–known trademark or an imitation liable to create confusion therewith. In addition, Article 16 paragraph (2) of the TRIPS Agreement, confirms that in determining whether the trademark is well-known, it must take into account the knowledge of the trademark in the relevant public sector, including the knowledge of the member concerned which is obtained as a result of the promotion of the Trademark.

Thus, even though the conflicting trademarks are in different classes, the term ‘cross-class,’ as applied in the Directorate of Trademarks at the DGIP, allows both trademarks to be considered for registration in different classes. However, if, in marketing, they have a close relationship and fulfill the criteria mentioned above, then the difference in the class of goods and/or services must be ignored.

The well-known trademark protection system in Indonesia, in the context of this case, has not been optimally realized, as the court’s legal considerations are still primarily procedural. In this instance, it seems that the Commercial Court only considers legal aspects from the procedural side, while the overruling by the Supreme Court focuses solely on legal considerations from the substantive side.