Indonesia’s Strict First-to-File System: Why Early Registration Is Non-Negotiable

Indonesia operates one of the most rigid first-to-file trade mark systems in Southeast Asia. Under Law No. 20 of 2016 on Marks and Geographical Indications (the Trademark Law), trade mark rights arise exclusively from registration, not from use. The party that files first with the Directorate General of Intellectual Property (DGIP) obtains exclusive rights — regardless of whether another party has been using the mark in Indonesian commerce for years. For international brands, this means that delay in filing can result in losing control of your own brand name in one of the world’s largest consumer markets.

The First-to-File Principle

Indonesia’s first-to-file system is codified throughout the Trademark Law. Trade mark rights are acquired after the mark is registered; there is no common-law right arising from use alone. If two or more parties apply for identical or similar marks, the earlier filing prevails. This stands in contrast to first-to-use systems (such as the United States or the Philippines) where prior commercial use can establish superior rights even without registration.

The practical consequence is stark: a local party in Indonesia can register a mark identical to a well-known foreign brand, and — absent a successful challenge — the foreign brand owner will have no enforceable trade mark rights in Indonesia. The foreign owner cannot rely on prior use, global reputation, or registrations in other countries to claim automatic rights.

The Limited Role of Prior Use

Prior use of a trade mark in Indonesia offers very limited protection under the current legal framework. Unlike some jurisdictions that allow prior users to continue using their marks even after a third party registers, Indonesia does not provide a formal prior-user defence. A party that has been using a mark commercially in Indonesia without registering it has almost no legal standing to prevent a later registrant from enforcing that registration.

There are only two narrow avenues through which prior use becomes relevant:

• Bad faith challenges: If the prior user can demonstrate that the registrant filed in bad faith — meaning the registrant knew of the prior user’s mark and filed with dishonest intent — the registration can be challenged through invalidation proceedings (discussed in a separate article).
• Well-known mark protection: If the prior user’s mark qualifies as well-known under Article 21(1)(b) and (c), the DGIP may refuse or invalidate a conflicting registration. However, proving well-known status requires substantial evidence of recognition among Indonesian consumers.

In both cases, the burden of proof falls on the prior user, and the proceedings are complex, expensive, and time-consuming. In many cases, the prior user simply cannot meet the evidentiary threshold.

The Squatting Problem

Indonesia’s strict first-to-file system, combined with the limited role of prior use, has made the country a frequent target for trade mark squatters. Opportunistic parties monitor international brand launches, trade exhibitions, and media coverage, then race to register foreign brand names at the DGIP before the legitimate owner files. The squatter then either blocks the legitimate owner from entering the Indonesian market or demands a substantial payment for transferring or surrendering the registration.

This problem is particularly acute for small and medium-sized enterprises (SMEs) and brands entering Indonesia for the first time through e-commerce channels, which may not trigger the urgency of filing that a physical market entry would. By the time the brand owner discovers the squatter’s registration, the mark may already be registered and potentially in use.

The Examination Process

The DGIP’s examination process is structured in two phases:

• Publication for opposition: After an application passes formal requirements, it is published for two months. Any interested party may file an opposition during this period. Oppositions are considered during the subsequent substantive examination.
• Substantive examination: After the publication period lapses (or after oppositions are filed), the DGIP conducts a substantive examination based on Articles 20, 21, and 22 of the Trademark Law. This covers inherent distinctiveness (Article 20), conflicts with prior marks and well-known marks (Article 21), and generic names with distinctive additions (Article 22). The examination should be completed within 150 working days, though in practice it may take longer.

The two-month opposition window is the only opportunity for third parties to raise objections before registration. Once this window closes, there is no extension or late filing mechanism. Missing the opposition window leaves the brand owner with the more costly option of post-registration invalidation proceedings at the Commercial Court.

The Madrid Protocol Route

Indonesia is a member of the Madrid Protocol, allowing international applicants to designate Indonesia through a single international application filed via WIPO. This route offers advantages in cost and administrative efficiency for brands filing in multiple jurisdictions simultaneously. However, the designated Indonesian application undergoes the same substantive examination by the DGIP, and the same opposition and refusal grounds apply.

Strategic Recommendations

• File before entering the market: Do not wait until you have commercial operations in Indonesia. File your trade mark application as early as possible — ideally before any public announcement of your entry into the Indonesian market.
• File defensively across key classes: Register in your core classes and adjacent classes where squatters commonly target. The cost of defensive registrations is a fraction of the cost of invalidation proceedings.
• Monitor the DGIP database: Use trade mark watching services to monitor new filings at the DGIP that are identical or similar to your marks. The two-month opposition window is the most cost-effective point of intervention.
• Do not rely on prior use: Even if you have been selling products in Indonesia for years without registration, your position is weak. Registration is the only reliable protection.
• Use the Madrid Protocol strategically: If filing in multiple ASEAN countries, the Madrid Protocol offers an efficient route for designating Indonesia alongside other member states.

Common Mistakes

• Assuming prior use creates rights: This is the most dangerous misconception. Indonesia does not recognise common-law trade mark rights based on use.
• Delaying filing until market entry: By the time commercial operations begin, a squatter may have already registered the mark.
• Relying on foreign registrations: Registrations in other countries have no legal effect in Indonesia. Each jurisdiction must be filed separately (or via the Madrid Protocol).
• Missing the two-month opposition window: Once the publication period closes, post-registration remedies are significantly more expensive.

Key Takeaway

Indonesia’s first-to-file system means that trade mark rights belong to whoever registers first, regardless of who used the mark first. Prior use offers almost no protection unless bad faith or well-known mark status can be proven — both of which are burdensome and uncertain. For any brand with current or future commercial interest in Indonesia, early and proactive registration is not merely advisable — it is essential. The cost of filing is negligible compared to the cost of losing your brand name to a squatter in one of the world’s fourth-largest economies.