Januar Jahja & Partners

Supreme Court limits first-to-file principle by cancelling celebrity’s trademarks

Andrew Diamond and Fabiola Rossy, Januar Jahja and Partners

*This article originally appeared in Managing IP (Oct. 2020), https://www.managingip.com/article/b1nxn4xfbv2psc/supreme-court-limits-first-to-file-principle-by-cancelling-celebritys-trademarks

In a decision published on June 26 2020, the Indonesian Supreme Court affirmed a lower court’s ruling against a celebrity who sought to acquire prior rights to a disputed mark and then cancel a competitor’s trademark. The decision demonstrates some limit on the jurisdiction’s first-to-file position, which has historically been strictly applied and enforced both by courts and by the Indonesian IP Office. The Supreme Court also upheld the cancellation of some of the celebrity’s trademarks due to his previous work for the defendant as a brand ambassador, serving as a cautionary tale to potential bad faith plaintiffs.

Here, the plaintiff/appellant is Mr Ruben Onsu, an Indonesian celebrity who has built his own food and beverage (F&B) brand based on the mark “Bensu,” which he states is an amalgamation of his name (ruben onsu). In August 2019, he filed a trademark cancellation action with the Central Jakarta Commercial Court against the mark “I am Geprek Bensu Sedep Beneerrr” and logo in Class 43 (reg. no. IDM000643531) in the name of PT Ayam Geprek Benny Sujono, an Indonesian company that owns the restaurant chain I am Geprek Bensu Sedep Beneerrr. Colloquially, this mark means “Bensu’s Really Delicious Smashed Chicken.”

In his lawsuit, Mr Onsu alleged that the defendant’s mark had substantial similarity with his “Bensu” marks, in particular a “Bensu” and logo mark in Class 43 that he had purchased from a third party in February 2019, seven months prior to filing his lawsuit. Mr Onsu therefore asked the court to declare him as the first filer, the only valid owner of, and thus the sole party entitled to use, the “Bensu” marks in Class 43 in accordance with Indonesia’s first-to-file system.

Not content with just denying all of Mr Onsu’s allegations, the defendant also filed a counterclaim (rekonvensi) to cancel all 34 marks containing the word “Bensu” owned by Mr Onsu in various classes based on bad faith, as well as seeking approximately $6.85 million in damages. The defendant argued that Mr Onsu was not the first filer of the prior “Bensu” mark as he had purchased it from a third party after the defendant filed their “I am Geprek Bensu Sedep Beneerrr” mark in May 2017. Further, the defendant noted Mr Onsu acted as their brand ambassador and started in this position before he began filing his own trademark applications containing the word “Bensu.”

The Commercial Court rejected the plaintiff’s lawsuit in its entirety (Decision No. 57/Pdt.Sus-Merek/2019/PN Niaga Jkt.Pst dated January 13 2020) and even granted the defendant’s counterclaim in part by cancelling six “Bensu” registrations owned by Mr Onsu in Class 43. For the court, it was not enough that Mr Onsu had purchased and now owned the earliest “Bensu” registration in Class 43. Instead, in considering Indonesia’s first-to-file system, the court ruled that for a comparison of filing dates to take place, the marks at issue must first be found to have similarity in their essential part.

Here, the defendant’s mark is “I am Geprek Bensu Sedep Beneerrr” and includes images of a chicken and fire, while the prior mark that Mr Onsu bought from the third party consists only of the word “Bensu” along with images of a cow and four wrenches. The court found the marks to be dissimilar and therefore ruled that any comparison of their filing dates was irrelevant. Between the remaining similar-thus-relevant marks, the defendant’s mark was filed first on May 3 2017, while Mr Onsu’s marks were filed later in 2017 and 2018, thereby giving the defendant prior rights to their “Bensu” mark for Class 43 services under Indonesia’s first-to-file system.

The court then considered the defendant’s counterclaim and found it reasonable to conclude that Mr Onsu’s registration of the six “Bensu” marks in Class 43 was done in bad faith due to his previous role as the defendant’s brand ambassador. Thus, the court ruled that these trademarks were attempts at unfair business competition and/or to mislead consumers and granted the counterclaim to cancel these six registrations. The defendant’s damages claim however, was dismissed as unproven.

Unhappy with the Commercial Court’s decision, Mr Onsu filed an appeal (kasasi) to the Indonesian Supreme Court, yet the court rejected his petition and upheld the initial decision (Decision No. 575 K/Pdt.Sus-HKI/2020 dated May 20 2020, and formally published on June 26 2020). In so ruling, the Supreme Court stated that the “[plaintiff] should have realised that his role was only as an ambassador of the trademark owned by [the defendant] and thus, [the plaintiff]’s attempt [to register “Bensu” marks] was based on bad faith in order to take away [the defendant’s] consumers.”

Following the Supreme Court’s decision, there is so far no indication that Mr Onsu will file a motion for reconsideration and preliminary media reports indicated that the parties were heading towards a settlement. However, a recent lawsuit filed on September 15 2020 by a co-owner of the defendant’s business against Mr Onsu to cancel additional trademarks strongly indicates that this dispute may be far from over.

As such, it will be interesting to see how the court will evaluate the facts of the most recent case and apply the first-to-file principle therein. As Indonesia is a civil law jurisdiction, the impact of the above-discussed Bensu ruling is primarily limited to the parties and will not immediately have any precedential value. However, it could be used by future defendants and/or judges to punish plaintiffs who bring lawsuits in bad faith and with unclean hands, as their own marks could now be at risk of cancellation by courts seeking to balance the first-to-file principle with the concepts of fairness and bad faith.