WHAT HAPPENS WHEN YOUR TRADEMARK LOSES ITS DISTINCTIVENESS?

altTo be caught in a situation where your mark has lost its distinctiveness is truly awful, and potentially disastrous to companies or trademark owners. When you create a mark, with its uniquely coined name and/or logo, and seek protection for that creation, you would surely believe that it is exclusive and that no one else has it, uses it, or can use it.

Having confidence that it is a unique mark, you are eager to develop the goodwill of the mark, and building goodwill – as we all know – requires substantial expenditure, time and effort.

Once your mark has generated goodwill, other parties will be attracted to your mark and may create similar marks to name their products or services, seek protection for it, and in a worst case scenario, get their trademarks registered and accepted by the Registrar.

While this may seem like it is just a story, this is exactly what happened to Toyota in Indonesia. Toyota has a range of world-renown luxury automobiles called LEXUS. Toyota, being the automobile giant that it is, naturally spent a lot to build up LEXUS as a premium brand.

However, the reputation of LEXUS inspired some parties to take advantage of the name and use it on their products. Not only did they use LEXUS for marketing and distribution, but they also sought protection for their LEXUS mark by filing trademark applications.

Problems arose when the Registrar noticed that LEXUS had become a trending name and as a consequence, LEXUS has been registered by many parties in many classes. For example, in class 09, LEXUS is owned by at least 3 different parties:

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Reg. Number

Owner

Class

Trademark

IDM000297188

LIE SUGIARTO

9

LEXUS

IDM000255545

JAYA ISKANDAR

9

LEXUS

IDM000232235

 

PT LEXUS DAYA UTAMA

9

LEXUS + LOGO

 

IDM000249462

LIE SUGIARTO

9

LEXUS + LOGO

IDM000236893

 

SOEBIJONO ISKANDAR

9

LEXUS

 

This was naturally an unfavourable circumstance for Toyota, who consequently sought legal action. The battle against the local owners of the LEXUS marks commenced 2 years ago, when Toyota filed at least 5 cancellation lawsuits against the local LEXUS marks at the Commercial Court and prevailed. More recently, Toyota filed a cancellation action against a LEXUS trademark in class 32, registered under number IDM00351051 in the name of Budi. Based on the previous decisions, it seemed clear that Toyota would prevail here too – and indeed it did, as the Judge held that the other LEXUS mark was riding on the goodwill of the LEXUS mark owned by TOYOTA.

However the battles against the locally owned LEXUS marks are far from over as there are still  more of such registrations in the Register. The journey to overcome this use of LEXUS by other parties will take time, which in turn means more money will be spent to fund the cancellation lawsuits.

Learning from Toyota’s experience, how can you avoid being in a similar situation? It’s simple. First, If your trademark has goodwill and you wish to build your brand internationally, you need to file for protection not only in the classes of goods or services in which you use your trademark, but you may also need to consider filing in other classes to avoid misuse by other parties. For this purpose, you can and should consult with your IP consultant. Secondly, ask your IP consultant to keep an eye on other applications which can be considered imitations (partial or whole) of your trademark, filed in other classes. In Indonesia, you will have the opportunity to file an opposition of another party’s application – even if filed in a different class – based on the popularity and the goodwill of your trademark.

Source: Kass

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