Law Enforcement against Counterfeit Goods in Indonesia

The number of counterfeit goods circulated in Indonesia are still huge. Printer ink, apparel, leather goods, and software are the main products that are being counterfeited with more than 30% percentage, according to the data published by MIAP (Indonesia Anti-Counterfeiting Society) through Amcham Indonesia. Then followed by cosmetics, pharmaceutical and lastly, food and beverages products. Broadly speaking, counterfeiters are targeting global well-known brands and unfortunately, counterfeiting activities create impacts on broad scope, which includes:

1. Brand owner loses its brand values, reputation, profits and investment costs;
2. Government loses tax revenue and there are risks of corruption or foul practise;
3. Consumers will have health and safety risks by consuming dangerous pharmaceutical, cosmetics or foods and beverage, and misled by low quality products.

To overcome the counterfeit goods is quite challenging tasks, but it is not impossible. The protection of registered trademarks for brand owner stipulated under Law No. 20 year 2016 on Trademark and Geographical Indication ("Trademark Law") which allows the brand owner or its proxy to enforce its right and take legal actions. Please bear in mind that the protection only covers registered trademarks, so the brand owners are suggested to file trademark application prior to conducting business in Indonesia.

Counterfeiting is a trademark infringement and it carries both civil and criminal penalties. The criminal offense shall convicted the counterfeiter with 5 years of imprisonment and fined a maximum of IDR 2.000.000.000,- (two billion Rupiahs). The brand owner or its proxy is therefore entitled to lodge a criminal complaint to Authorities such as Police or Civil Service Investigator (PPNS) and/or claim for damages to commercial court for the losses suffered as a result of the infringement.

Trademark infringement is a complaint based criminal, thus law enforcement can only be processed if there is a complaint from the brand owner or its proxy. Once the complaint is lodged, the Authorities will examine the case and conduct investigation to obtain evidences, then assure the infringement is still ongoing prior to commencing raid action. In practise, the post-raid step can lead to two options; either the brand owner and the counterfeiter reach amicable settlement through an agreement, in which the counterfeiter shall subject to demands therein, or escalate the case to Prosecution, if amicable settlement is not succeed. The objectives of law enforcement program are to give deterrent effect to counterfeiters and widespread awareness for other crime perpetrators against counterfeits.

Written by: Threeas Novayanti