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Mandatory use of Indonesian for trademarks falls short
Previously, there was one main controversy regarding the mandatory use of Indonesian for every agreement involving Indonesian parties. Alas, with the stipulation of the recent language regulation, at least two major problems remain, of which the most current will be discussed more thoroughly.
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For example, whether local transliterations were necessary for international brands like Coca-Cola or KFC to have the broadest protections in certain markets, such as China or Japan. In our case, rather than supporting local brands to secure wider protection, the above regulation is tapering their options to penetrate larger markets. (JP/-)
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t took a decade for Presidential Regulation (Perpres) No. 63/2019 concerning the use of Indonesian to be finally enacted as the implementing regulation of Law No. 24/2009 concerning the national flag, language, emblem and anthem, just to see it fall short of market expectations for solving uncertainties faced by many business and law practitioners.
Previously, there was one main controversy regarding the mandatory use of Indonesian for every agreement involving Indonesian parties. Alas, with the stipulation of the recent language regulation, at least two major problems remain, of which the most current will be discussed more thoroughly.
First is the incomplete solution regarding the use of Indonesian in memoranda. Unlike Law No. 24, the regulation on Indonesian allows contracting parties to agree on the desired governing language. However, it also states that the foreign language is only an equivalent or translation of the Indonesian version.
In the past years, business players entered into an agreement written in a foreign language, mostly English, for the sake of speed and timing, followed by signing the Indonesian version. Although that alternative worked just fine to overcome time constraints and avoid invalidity, it may not be applicable from now on. Strictly reading, parties need to prepare both foreign and Indonesian versions at the same time, which is impractical for transnational transactions when time is of the essence.
Similar to its predecessor, the regulation on Indonesian does not specify implications for violations. Whether noncompliance is considered as a material delict, which will invalidate the lawful cause element of an agreement, or merely a formality breach, is still unclear. Hence, it is just as far as the judge’s interpretation to decide the validity of an agreement due to a mere language incompliance, instead of having law certainties.
Second is the striking mandate to Indonesian for trademarks owned by Indonesian parties. Despite this provision mentioned by Law No. 24 and the fact that Indonesian trademark applications using a foreign language were still granted, the latest regulation reaffirms that previous practices must end.
This creates confusion for future practices not only because the Trademark Law has never required such an obligation but also because this burdens many industries with arduous requirements that might severely impair their businesses in several ways.
