Trademark Squatting in Indonesia: First to File, First to Strike

The First-to-File Principle

Under Article 4 of Law No. 20 of 2016 on Trademarks and Geographical Indications (UU Nomor 20 Tahun 2016 tentang Merek dan Indikasi Geografis, as amended by the Job Creation Law / UU 6/2023), trademark rights belong to the first party that files a valid application — not the first to use the mark in commerce.

This is fundamentally different from the first-to-use system in the United States. A company that has used a brand globally for decades has zero rights in Indonesia until it files a registration with the DJKI (Direktorat Jenderal Kekayaan Intelektual). If someone else files first, they own it.

The Territorial Principle

Trademark rights do not cross borders. A registration in China, the EU, the US, or anywhere else has no legal effect in Indonesia. Each country is its own jurisdiction. This means multinational companies must file in every single market they operate in — or plan to — and a single missed jurisdiction becomes an opening.

Bad Faith Registration (Itikad Tidak Baik)

Article 4 of UU 20/2016 states that a trademark application filed in bad faith — meaning the applicant knew the mark belonged to someone else — can be invalidated. The burden of proof lies with the challenger, which means they must demonstrate that the squatter had knowledge of the original brand at the time of filing.

In theory, this is a powerful tool. In practice, proving what someone “knew” months or years after the fact is extremely difficult, especially when the squatter can claim they independently conceived the mark.

Well-Known Marks (Merek Terkenal)

Article 21 provides protection for internationally well-known marks even without local registration. If a brand is widely recognized globally, a local registration in bad faith can be cancelled.

The catch: “well-known” is a high bar. The brand must be proven to have genuine fame among Indonesian consumers, not just recognition in its home market. Many international brands that are household names in their countries of origin fail this test in Indonesia.

The Objection Window

When the DJKI publishes a trademark application, there is a public announcement period during which third parties can file objections. This is the cheapest and earliest mechanism to challenge a problematic registration — but it requires active monitoring. Most foreign companies don’t watch DJKI publications for marks they haven’t registered.

Timing

Squatters monitor international trade shows, product launches, and market entry signals. When a foreign brand announces plans to enter Indonesia, the squatter files first. The recent BYD Denza case followed this pattern exactly — PT Worcas Nusantara Abadi registered “Denza” in Nice Class 12 (vehicles) in July 2023, months before BYD’s official Indonesian launch and before BYD filed its own application.

Cross-Class Registration

Squatters often register marks in Nice Classes unrelated to the original brand’s industry, then later broaden their claim. A coffee company registering a vehicle brand name is not unusual in this ecosystem. The Jakarta Commercial Court has seen cases where the registrant’s core business had zero connection to the class they registered.

The Transfer Escape Hatch

This is the most damaging tactic. When the rightful owner files a lawsuit, the squatter transfers the trademark to a third party before the case reaches judgment. This creates what Indonesian courts call “error in persona” — the plaintiff sued the wrong party, so the case is dismissed on procedural grounds without ever examining whether the registration was in bad faith.

This is exactly what happened in the BYD case. PT Worcas Nusantara Abadi transferred the Denza trademark to PT Raden Reza Adi in September 2024. When BYD filed suit in January 2025, they named the original registrant as defendant. The Supreme Court rejected BYD’s cassation petition in April 2026 purely on this procedural technicality — the merits of whether the trademark was registered in bad faith were never evaluated.

IKEA vs PT Ratania Khatulistiwa (2015)

A local Indonesian company registered the IKEA trademark before the Swedish furniture giant filed in Indonesia. The case dragged through Indonesian courts for years. In 2015, the Supreme Court partially cancelled IKEA’s local trademark registration in favor of PT Ratania Khatulistiwa, a stunning decision that sent shockwaves through the international business community.

BMW vs BYD (2025)

In a twist of irony, BMW is currently suing BYD over the M6 nameplate in Indonesia (Case No. 19/Pdt.Sus-HKI/Merek/2025/PN Niaga Jkt.Pst). BMW claims the BYD M6 infringes on BMW’s established naming convention. This case illustrates how trademark disputes can arise even between two sophisticated multinational companies operating in Indonesia.

Other Affected Brands

Several other international brands have faced trademark issues in Indonesia, including fashion labels, technology companies, and food and beverage brands. The common thread: the rightful owner was either late to file or failed to monitor DJKI publications in their target Nice Classes.