intellectual property theft

How Two Indonesian Men Stole a 70-Year-Old Sneaker Logo

Famous foreign brands keep losing court battles with tiny Indonesian companies who registered the same name first. Why are the courts legalizing pirates and knockoffs?
June 8, 2017, 6:48am
Photo by 55Laney69/ Flickr CC License

The first Onitsuka Tiger basketball sneaker hit the market in Japan way back in the 1950s. It looked like a weird Chuck Taylor knockoff with tiny octopus-like suction cup things on the sole. In the decades that followed, ASICS, Onitsuka Tiger's parent company, turned the sneaker into one of the world's most iconic running shoes.

In Indonesia, two men, Theng Tjhing Djie and Liog Hian Fa, registered a logo that looks a lot like the one used by Onitsuka Tiger in the 1994 for their own sneaker company.

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So who owns the copyright in Indonesia? A Japanese company that's been around since the 1940s and has sold shoes all over the world, or two men running a small business from somewhere in Jakarta?

ASICS Corporation was wondering the same thing. They brought a lawsuit before the Central Jakarta Commercial Court back in 2010 alleging that the two men stole their brand's logo. The sneaker company demanded Rp 6 billion ($451,000 USD) in compensation from the losses ASICS believes they incurred from having an Indonesian company pushing a knockoff on the same market.

But the commercial court rejected the complaint, ruling that Djie and Fa were the rightful owners of Onitsuka Tiger in Indonesia. The high court did the same thing. And now the Supreme Court, one of the nation's highest legal authorities, again ruled against ASICS.

So Onitsuka Tiger is now legally an Indonesian sneaker company and Japan's ASICS are the knockoffs stealing a registered logo for their own shoes. And it's not just ASICS. Toyota, IKEA, Pierre Cardin, and Polo Ralph Lauren have all lost court battles to reclaim their logos from knockoffs and pirates. In Indonesia, it doesn't matter if you're a giant multinational corporation like IKEA or a mom and pop rattan furniture shop from Surabaya. Whoever registered the brand first locally is the rightful owner.

And, at times, the local trademark holder can win without doing anything at all. When Polo took an Indonesian knockoff shirtmaker to court, the local company's owner didn't even bother to show up for the hearing. Polo still lost.

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It's a system that hurts the country's standing on the global marketplace by effectively legalizing piracy and intellectual property theft. Rulings like these can make foreign companies think twice before they decide to invest in the local market, a decision that leaves Indonesian consumers with a marketplace ruled by cheap knockoffs or expensive imports.

"Cases like these should have been won by the rightful owners [of the brand], especially when it's so obviously blatant who owns it," Hariyadi Sukamdani, the chairman of the Indonesian Employers Association (Apindo) told VICE Indonesia. "It's not right. People should not conduct their business without proper ethics."

It also encourages "squatting," where local businesses registered trademarks and logos of foreign businesses and sit on them until that company tries to set up an Indonesian office. The "squatters" then offer to sell a company back its own brand, at rates that sometimes reach as high as $100,000 USD (Rp 1.3 billion).

"In the realm of brand rights, authenticity cannot be tested" Ragil Yoga Edi, the head of the intellectual property division at the Indonesian Institute of Sciences (LIPI), told VICE Indonesia. "If a brand is registered in one country and due to any form of negligence the company fails to recognize the importance of registering it in other countries, there is a big possibility that someone else will register the same brand name."

But it's unrealistic to ask every major company to monitor their trademarks in every country in the world, said Hariyadi. The Indonesian courts, or the authorities, need to recognize that foreign companies with an established history of using a trademark are the rightful owners, regardless of who registered a knockoff locally first.

"Either the courts or the authorities have to be in favor of the rightful owners of the brands," he said. "It's impossible for those foreign companies to always keep an eye out."

This article was originally published under the headline "Why Do Brands Like ASICS and IKEA Keep Losing Copyright Complaints to Local Companies?"