Founding CEO of KontrakHukum.com
Intellectual property protection. (Shutterstock/Chuenmanuse)
One of the main causes of business failure in Indonesia is the failure to protect intellectual property.
One common mistake is to equate intellectual property with copyright. Indeed, copyright is only one type of intellectual property rights.
All businesses have intellectual property. We might not have a patent for our invention, but we all have a brand for our business. It might be an image, a logo or a term used to advertise and represent our products. A brand is a kind of intellectual property right known as trademark.
The legal nature of a trademark is different from that of a copyright. An inventor of creative works automatically owns the copyright to their invention. However, one only owns a trademark when he or she registers it.
Trademarks are issued by the government to those who hold a trademark certificate. Thus, trademarks are owned by those who register them first and not by those who used them first or invented them.
A trademark is a common source of business failure among small and medium- scale enterprises (SMEs) and start-ups in Indonesia. Many entrepreneurs build their brands without registering them. It means that they do not own the property right to their brand.
Indeed, some use brand names that have previously been registered by others, who therefore legally own them. They spend time and money promoting others’ brands and businesses. I remember the case of a well-known Muslim clothing designer who had to change the name of the brand after seven years of promoting it because it had been previously registered by someone else.
There are also similar cases, such cases of the ownership of domain names without registering the brands. In many cases they had already been registered by others. Then-deputy head of infrastructure at the now-defunct Creative Economy Agency (Bekraf) Hari Santosa Sungkari reported that only 11.5 percent of creative economy entrepreneurs had registered for intellectual property rights. This number reflects the low recognition of the importance of protecting business property rights. It is important to note that only those who own them have the rights to monetize them. They may use them in their businesses, license them for royalties or sell them to others.
Using others’ trademarks without their consent is a violation and could lead to litigation. This still holds true even if the violators have used them for a long time and are unaware of the violation. In other words, you could be exploited if someone knows that you have not registered your brand. The person could register it first and offer to sell it to you.
In conclusion, all entrepreneurs should realize that property rights are business assets. They are important parts of a company's valuation. They can also serve as collateral on a debt. A brand is a kind of intellectual property. I strongly encourage all SMEs and start-ups to register their property rights, starting with the registration of their trademarks. (kes)
Rieke Caroline is the founding CEO of KontrakHukum.com, the first Indonesian online platform providing legal services, such as on trademark, contracts, incorporation and consulting. She graduated magna cum laude and as a valedictorian of the School of Law at Pelita Harapan University. She has been named one of the 2019 Inspiring Women by Forbes Indonesia.
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Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.