Unfair Competition and Prominent Dispute Cases

One of the consequences of the rapid expansion of business, trade and industry, is the more frequent occurrence of unfair competition and trademark infringements. A really clear and explicit legislation on unfair competition is still lacking in Indonesia, but certain articles in the Civil Code as well as in the Criminal/Penal Code can and have been applied in cases of unfair competition and trademark infringements.

The basis thereof are:
– Article 1365 of the Civil Code, which states that: “Every unlawful act causing harm to another person, shall obligate the person whose act(s) has (have) given use to said harm, to compensate for said harm.”
– Article 382bis of the Penal Code, which states that: “Anyone who commits a dishonest act to deceive the public or a person with the intention to obtain, maintain or increase profit from trade or industry owned by him or by another person, shall be punished for the crime of unfair competition with a sentence of imprisonment for maximally one year and four months or with a fine of maximally Rp. 13,500, if said act(s) could cause harm to his competitor or the competitor of said other person.”
– Article 1, point 6 of Law No. 5 of 1999 regarding the Prohibition of Monopolistic Practices and Unfair Competition (State Gazette of 1999 No. 33, Supplementary Gazette No. 3817), which states that: “Unfair Competition is a competition between entrepreneurs in conducting production activities and or marketing of products and or services through dishonest or unlawful acts or obstructing the business competition”.

Anti-monopoly and unfair competition act is included within the provisions of Law No. 5 of 1999 regarding the Prohibition of Monopolistic Practices and Unfair Competition, however, the scope of intellectual property is an exception to this Law, as stated in Article 50 (b) of Law No. 5 of 1999, which states that: “Agreements related to Intellectual Property Rights, such as license, patent, trademark, copyright, industrial design, layout design of integrated circuit and trade secrets as well as agreements related to franchise.”

In recent years, several disputes concerning registered marks applications based on bad faith have been brought and settled in court in Indonesia. The following examples can be given are the VERSACE case (GIANNI VERSACE S.p.A. vs. IWAN BASARI); and the TOSHIBA Case (KABUSHIKI KAISHA TOSHIBA b.d.n TOSHIBA CORPORATION vs. TUAN CHUA JACOB SOETEJA and The Government of the Republic of Indonesia qq Dept. of Justice and Human Rights RI cq. Directorate General of IPR cq. Directorate of Marks).