What Is The Importance of Registering Trademark for Entrepreneurs?

“Registering trademark is important so that entrepreneurs are able to avoid the risk of loss and have the opportunity to develop their business.”

Nowadays, technology development has produced many creative ideas which also can be transformed into a business plan by offering goods or services to the consumer. However, it can still be found that many entrepreneurs are not aware of the risk of loss while running their businesses. One of the causes of the risk of loss in business is being not aware of trademark matters. 

Why is trademark very important for entrepreneurs?

A trademark is something that entrepreneurs should register in order to secure the legal protection of the usage of the trademark. This term is statued on Article 3 Law Number 20 of 2016 concerning Trademark and Geographical Indication (hereinafter mentioned as Indonesia Trademark Law). 

Therefore, the registered trademark will give the trademark holder an exclusive right for using the trademark on behalf of the trademark holder or giving permission to other parties to use his trademark. This protection is valid for 10 years and it can be extended.

The trademark registration is using the “first to file” principle where the first registrant is the party who obtains legal protection for his trademark. 

The application for trademark registration can be done by applying the written application by the registrant or his attorney. This application shall be addressed to the minister whether online or offline (Article 4 Indonesia Trademark Law). 

How to register your trademark in Indonesia?

The online application can be done by visiting the official DJKI’s (General Directorate of Intelectual Property or Direktorat Jenderal Kekayaan Intelektual or “DJKI”)  page on www.dgip.go.id. Meanwhile, the offline application shall be sent to the DJKI office or representative office of the Ministry of Justice and Human Rights of the Republic of Indonesia.

The benefits of registering a trademark

On page 7 of “Modul Kekayaan Intelektual Bidang Merek dan Indikasi Geografis” or Intelectual Property on Trademark and Geographical Indication Module 2019 that written by DJKI, one of the benefits of registering the trademark is entrepreneurs are able to differentiate their owned business from other competitor’s business. Besides that, the trademark also plays its role in giving the quality of goods or services that are offered.

On the other side, registering the trademark can also be advantageous for consumers because the existence of the trademark allows consumers to differentiate the original product from a similar product. Moreover, the consumers tend to feel more satisfied if they buy or use the original product because the original product guarantees the quality of the product.

Read more: Follow These Steps to Register an International Trademark In Indonesia! 

Is there any disadvantage if the entrepreneur is not registering a trademark?

The unregistered trademark will put entrepreneurs in an unfavorable position. For example, since the trademark can be assumed as a high-priced asset so the possibility to abuse the trademark is high. 

Furthermore, an unregistered trademark also allows the competitors to use or modify the identity on the trademark for their businesses. This scene is unfavorable for the actual trademark owner because his market can be stolen by the party who uses or modify his trademark.

Another benefit of registering a trademark

Besides the risk of business loss, registering trademark can give the lawful trademark holder opportunity to conduct a license agreement (Article 41 paragraph (1) article e Indonesia Trademark Law).

Usually, the objective of giving the license is to empower the trademark so that trademark could provide financial profit for the lawful trademark holder. By licensing, the trademark holder has agreed on a written agreement which consists that the trademark holder allows the other party to use his trademark partly or entirely towards every type of goods and services (Article 41 paragraph (1) Indonesia Trademark Law).

However, Indonesia’s Trademark Law does not regulate further regarding the type of license that can be used on optimization in order to get some profit. On page 55 of DJKI’s module titled Advanced Intelectual Property on Trademark and Geographical Indication Module explains that there are five types of license on the trademark that is usually used by entrepreneurs which are:

1. Franchise;
2. Merchandising;
3. Brand Extension;
4. Component Branding; and
5. Co-Branding.

With those five channels, the trademark holder is able to obtain some royalties from his trademark. Even though the five types of the license above are not clearly stated in the Indonesia Trademark Law, the trademark holder can still use the “freedom of contract” principle based on Article 1338 Indonesian Civil Code which allows every party to freely choose what is the form, content of the agreement.

Are You Interested in Register Your Trademark? Please Just Contact SmartLegal.id Through Clicking The Button Below!

Author : Bima Satriojati