Ikea Indonesia loses right to its own name

Ikea Indonesia has suffered a rude shock: Indonesian trademark laws have left the Swedish furniture giant without the right to its own name in the Southeast Asian nation.

A decision of the Central Jakarta Court granting Indonesian ownership of the Ikea brand name to a local business back in September 2014, has been upheld in a majority decision by the Supreme Court.

Commentators and critics of the Indonesian government and the country’s legal system say the court decision should be a warning of “the dangers facing foreign companies” who go to Indonesia.

The Supreme Court says the name Ikea is legally owned by PT Ratania Equator, a Surabaya company which registered the Ikea trademark as an acronym for ‘Intan Khatulistiwa Esa Abadi’.

The real Ikea trademarked its name in Indonesia on october 9, 2006 and again on October 27, 2010. But Ratania lodged claim to the name arguing that Ikea had not actively used its trademark in three consecutive years for commercial purposes. Under Indonesian trademark laws, this means its rights to the brand expire.

That’s why Ratania registered the Ikea trademark on December 20, 2013, and then sued IKEA of Sweden in the Central Jakarta District Court to get it to give up its claims to the trademark.

The September 2014 ruling ordered Ikea Sweden to stop using its own name. Ikea appealed, which led to the Supreme Court ruling this week in Ratania’s favour.

Ikea has yet to announce its next step. It seems likely it will have to either buy its name back or begin trading under another name in Indonesia, neither easily palatable options for a company of its international standing.