GOTO trade mark infringement case in Indonesia shows that procedure trumps substance.
Carrying out trade mark litigation in Indonesia is highly challenging. Proving substantive claims is already hard enough, but a plaintiff must also anticipate procedural or formality challenges by the defendant or third party. A recent case involving one of the most important companies in Indonesia illustrates this while simultaneously showing the wider commercial challenges of trade mark use.
Procedural obstacles are a common part of the Indonesian litigation landscape. These can include court competence, the validity of the Power of Attorneys, obscure libel (unclear or mixed claims), error in persona (incorrect party), premature status (the case is too early), and double jeopardy. Failing to overcome formality challenges commonly can lead to a dismissal of the case by the Judiciary. Indonesian courts frequently focus heavily on formalities before they consider substantive issues. Factors such as the judges’ biases, subjectivity, inclinations, and very broad possible ‘interpretations of the law add to the litigation risk.
The recent GOTO trade mark infringement case is an example where the court appears to broaden the scope of its absolute competency procedural exception. PT Terbit Financial Technology “(“PT Terbit” “”) is a start-up company in e-commerce. PT Terbit provides software solutions for e-commerce companies, including connecting to logistics and payment systems. In March 2022, PT Terbit filed for a GOTO mark application in class 42, covering services related to the “Software as a service (SAAS) feature.” PT ‘ ‘Terbit’s GOTO application was accepted for registration on 25 May 2021 under Reg No. IDM000858218.
In one of its deals for its GOTO platform service, PT Terbit entered into an agreement with PT Paket Anak Bangsa, a payment gateway, and PT Aplikasi Karya Anak Bangsa. PT Aplikasi Karya Anak Bangsa is one of ‘ ‘Indonesia’s largest unicorns – known to the public as Gojek. It is a ride-sharing and digital payment service provider. It merged with a second unicorn PT Tokopedia (an e-commerce marketplace provider), in 2021 to form PT GoTo Gojek Tokopedia (“PT GoTo“) with a market capitalization of nearly US$14 billion.
PT Terbit objected to the use of the GOTO mark by PT GoTo and sued PT GoTo for infringement of its prior registered trade mark. Pt Terbit claimed damages of nearly US$130 million. It is unclear whether GoTo had adequately checked for clearance for their new mark or whether there were other contractual issues with PT Terbit. On 5 March 2021, PT GoTo filed its GOTO plain block-letter-word-mark application in class 42 for e-commerce platform services.
PT GoTo’s defenses comprised principally of arguments concerning formalities errors. On the merits, they argued the services were not similar. PT GoTo argued that PT Terbit, as the plaintiff, had combined two different claims, one for cancellation/invalidation and one for infringement. There is great uncertainty about whether it is lawful to include multiple different claims in one lawsuit. PT GoTo also argued that the Commercial Court does not have absolute competence to review the case since PT Terbit also requested the Commercial Court to order the IP Office to reject all the GOTO pending applications in several classes. PT GoTo argued this is the exclusive authority of the IP office, not the Commercial Court. So, it is beyond the competency of the Commercial Court to order the IP Office to do such. The argument was peculiar. The exception on absolute competence is usually for cases filed in the wrong court. Here the defendant argued that registrability arguments must be taken to the IP Office, not the Commercial Court. Technically the court does have no authority to order that in the Trade Mark Law.
Exceptions for court competence, absolute or relative, are decided early in Indonesian litigation before the evidentiary hearing. Meanwhile, exceptions based on other grounds are decided together with the issuance of the final decision. The court accepted PT ‘ ‘GoTo’s preliminary arguments and so dismissed the case. Therefore, the merits of the case and supporting evidence were not examined.
Meanwhile, the Trademarks Office registered PT GoTo’s GOTO trade mark, which was pending when the infringement action was filed. The Trademark Office stated that services in the same class can coexist if they are different.
PT Terbit chose not to appeal. Instead, they may choose to re-file. Instead of a pure trade mark infringement case, they would probably need to file a case to cancel GOTO’s trad emark. Or maybe a private settlement has been reached. Either way, the similarity of services and their apparent close market position has not been publicly resolved.
The lesson from the case is to prepare cases perfectly, take no risks with Indonesia litigation and ensure your paperwork and procedure are done properly. However, still, uncertainty should be anticipated considering the ‘judges’ authority to expand the scope of the formality procedure.
The matter can be viewed as a David-versus-Goliath case. It might appear harsh to reject important cases on technicalities. Another judge may have been more practical, ignored the technical error in the plaintiff’s claims, and instead focused on the real substantive dispute. Another reading might be that the judges were nervous about finding that one of Indonesia’’ ‘s Indonesia’s most high-profile companies would need to cease using their brand. The case is complicated because the parties have a commercial relationship. There is also the question of why PT GoTo rebranded, knowing another party had a similar name. There were technical errors, but one might wonder if the court missed an opportunity to make an important legal decision on similarity or lack of within classes.
For further information, please contact:
Nick Redfearn, Principal, Rouse
nredfearn@rouse.com
