Use It or Lose It: IKEA's Trademark Battle in Indonesia

Sterne, Kessler, Goldstein & Fox P.L.L.C.

When IKEA opened its first store in Indonesia in late 2014, it wasn't the only IKEA in town. Indonesian furniture company PT Ratania Khatulistiwa registered its IKEA mark (presumably an acronym for Intan Khatulistiwa Esa Abadi) in 2013, after successfully demonstrating that the Swedish retailer had not actively used its mark in Indonesia for commercial purposes for three consecutive years. Indonesia's Supreme Court confirmed last year that IKEA's marks were, in fact, subject to cancellation due to non-use and that PT Ratania Khatulistiwa's registration for the mark was valid.

Non-use of a mark, despite registration, can make a mark vulnerable to cancellation in a number of countries. In Australia, Japan, South Korea, Canada, China, and Russia, for example, registrations can be vulnerable to cancellation after three years of consecutive non-use, despite any future intent to use the mark. In some European countries, the period of non-use is five years.

In the United States, non-use for three consecutive years creates a rebuttable presumption of abandonment of the mark, regardless of whether a mark is registered. A mark owner may make a showing that there is a special circumstance surrounding non-use of a mark under TMEP 1604.11 to rebut the presumption of abandonment. Excusable reasons for non-use include engaging in ongoing negotiations with distributors, the sale of a business, a trade embargo, or other circumstances beyond the owner's control. A trademark owner can also rebut a presumption of abandonment by submitting documents and testimony of its intent to resume use.

Most countries require that a mark is used in a country in order to maintain a registration, but the specifics for cancellation based on non-use vary widely by country and typically require action by a third-party to petition to cancel a mark. Keep in mind, however, that in most countries, grounds for abandonment do not consider the trademark owner's intent, and depend solely on whether a mark has been used.

When filing applications to register marks, a mark owner should consider use requirements in countries of interest, and evaluate anticipated use of the marks in each country. Though IKEA is reportedly still operating its Jakarta store under the IKEA mark and is evaluating its next steps, the cancellation of its trademark registration has undoubtedly created an unnecessary obstacle to its expansion plans in this country.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Sterne, Kessler, Goldstein & Fox P.L.L.C.

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