Recently, the GOTO trademark infringement case in Indonesia fully demonstrated that procedures are superior to entities.
Trademark litigation in Indonesia can be very challenging. Because it is difficult enough for the plaintiff to prove substantive infringement claims, the plaintiff must also deal with procedural or formal challenges from the defendant or a third party. A recent case (GOTO Trademark Infringement Case) involving one of the most important companies in Indonesia exemplifies this point and also shows the challenges of using trademarks in a complex area of commerce.
Procedural obstruction is a common part of the Indonesian litigation process. These impediments may include disputes over court jurisdiction, validity of power of attorney, ambiguous claims (unclear or mixed claims), incompetent litigants (incorrect parties), preliminaries (bringing before the cause of action arises) suit) and ne bis in idem (double jeopardy prohibited). Failing to overcome procedural challenges, the judiciary usually dismisses the case. Indonesian courts usually place great emphasis on procedural issues before considering substantive issues. Factors such as judges’ preferences, subjectivity, bias, and possible discretionary interpretations of the law all increase litigation risk.
The recent GOTO trademark infringement case is an example where the court appears to have broadened the scope of its exception to absolute jurisdiction procedures. PT Terbit Financial Technology” (hereinafter referred to as PT Terbit) is an e-commerce start-up company that provides e-commerce companies with software such as connecting logistics and payment systems. In March 2022, PT Terbit applied for the GOTO trademark in Class 42 of the trademark registration , covering services related to “Software Operations Services (SAAS) Functions.” The application was successfully registered in 2021 with registration number IDM000858218.
In a deal related to the GOTO platform, PT Terbit entered into an agreement with payment gateway company PT Paket Anak Bangsa and one of Indonesia’s largest unicorns, PT Aplikasi Karya Anak Bangsa (publicly known as Gojek). Gojek is a car-sharing and digital payment service provider. It merged with another unicorn, PT Tokopedia (an e-commerce marketplace provider) in 2021 to form PT GoTo Gojek Tokopedia (hereinafter referred to as “PT GoTo”), with a market capitalization of nearly $14 billion.
PT Terbit objected to PT GOTO’s use of the GOTO trademark and sued PT GOTO for infringement of its earlier registered trademark. PT Terbit claims nearly $130 million. It is unclear whether the GoTo trademark adequately checked the licensing of the new trademark. It was also unclear whether there were other contractual issues with PT Terbit. On March 5, 2021, PT GoTo filed a trademark application for “GOTO” solid color letter blocks in Class 42 “E-Commerce Platform Services”.
PT GoTo’s defense focused on contentions related to programming errors. On the substance of the case, the parties argue that the services are not similar. PT GoTo argued that PT Terbit, as the plaintiff, had consolidated two separate requests, one for trademark cancellation/invalidation and the other for infringement. And whether it is legal to include several different requests in one lawsuit is very uncertain. PT GoTo also argued that the Commercial Court does not have absolute jurisdiction to examine the case, as PT Terbit also asked the Commercial Court to order the IP Office to dismiss all pending applications by GoTo in several categories. PT GoTo believes that this is the exclusive power of the Intellectual Property Office, not the Commercial Court. Therefore, asking IP offices to do so is outside the purview of commercial courts. This point of contention is special. The exception to absolute jurisdiction is usually an error of the court in which the action is brought, and in this case, the defendant argued that the dispute over the decision to register must be brought before the IP Office, not the Commercial Court. Strictly under Indonesian law, the courts have no power under the Trademark Act to order this.
In Indonesian litigation cases, the court should have reached a conclusion before the trial on the absolute or relative exceptions to jurisdiction. Meanwhile, exceptions based on other grounds should be decided together when the final award is published. The court accepted PT GoTo’s preliminary opinion and ruled to dismiss the case. Accordingly, the merits of the case and relevant supporting evidence have not been examined.
At the same time, the GOTO trademark application of PT GoTo, which was suspended due to litigation, was registered by the Trademark Office. The Trademark Office stated that if the services are different, even if they are in the same category, the trademark applications can coexist.
PT Terbit has currently chosen not to appeal. However, they may also choose to file a new lawsuit instead of a pure trademark infringement case, and they may need to file an invalidation application for GOTO’s trademark first. There may also be a private settlement between the two parties. Either way, the similarity of services between the two parties, and apparently close market positions, has not yet been definitively resolved.
This case tells us that to file a lawsuit in Indonesia, we must make full preparations and ensure that the documents and procedures are properly handled and arranged to avoid corresponding risks. And considering that “judges” have the right to expand the scope of formal procedures, even with sufficient preparation, things may still change.
This case can be seen as a contest between David and Goliath (paraphrased as the party that does not have the upper hand wins). Dismissing the case on a strictly legal level might seem harsh. If it were replaced by a more pragmatic judge, the procedural defects in the plaintiff’s lawsuit might be ignored directly, and the attention should be focused on the real substantive disputes. Another reading could be that the judges were nervous about ruling against one of Indonesia’s best-known companies and requiring them to stop using their trademark. The case is complicated because there is also a commercial relationship between the two parties. That’s why PT GoTo knows that the other party has a similar name and still uses it. Notwithstanding the legal error, one may wonder whether the court missed an opportunity to make an important legal decision regarding similarity or dissimilarity in trademark registrations of the same class.
For further information, please contact:
Nick Redfearn, Rouse