Much like their self-assembled chairs, Swedish furniture store IKEA faces a metaphorical collapse, losing their right to use the name in Indonesia to local furniture-maker, Intan Khatulistiwa Esa Abadi (aka Ikea).

In May last year, Indonesia’s Supreme Court affirmed a District Court decision – that the Swedish business’ trade mark, IKEA could be removed under Indonesian trade mark law for ‘non-use’. The court upheld that IKEA had not actively used the trade mark for commercial purposes for three consecutive years. 

IKEA had registered a trade mark in 2010, and in December 2013, the small Indonesian rattan furniture business registered their trade mark, Ikea. IKEA did not begin building its first and only store in Indonesia until mid-2014, at which point the local small business raised concerns and brought its case before the District Court.

The District Court ruled that the local furniture store owned the trade mark. IKEA then appealed to the Supreme Court, who upheld the decision in May last year, but only published the court reports this week.

Removal for Non-Use in Indonesia

In Indonesia, if a trade mark isn’t actively used for commercial purposes for three consecutive years, it may be removed from the trade marks register. Ikea demonstrated to the Court that IKEA had not been using the trade mark, especially considering they only set up their first store four years after registering the trade mark.

What About in Australia?

The rules for removal of a trade mark for non-use in Australia are similar to Indonesia’s. You must use the trade mark in the course of trade, and IP Australia can remove the trade mark if it isn’t used for a continuous period of three years.

If IKEA hadn’t used their trade mark in Australia, anyone could file an application for non-use to IP Australia on these grounds. IP Australia outlines a clear process for removing a trade mark for non-use, giving the trade mark owner an opportunity to respond and oppose the application. Trade marks can be fully or partially removed, meaning that the trade mark may be associated with multiple goods or services.

What Can IKEA Do Now?

IKEA offers a lesson for many global businesses – their reputation and popularity does not automatically give them a right to own the trade mark. It shows how important it is to secure the trade mark in each country that a business trades in, and to understand the laws which apply.

Although, IKEA is not completely without hope. The Swedish furniture giant could file an appeal to the Supreme Court again, change its name, or pay royalty fees to the owner of the ‘Ikea’ trade mark to use the name.

Interestingly, this type of situation is not uncommon. Celebrities and other bigger, more established businesses have been unable to register their well-known names as trade marks because smaller, lesser-known entities have beat them to it. When it comes to trade marks, you snooze, you lose.

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What do you think? Tag us on Twitter @legalvision_au and let us know or ask our trade mark lawyers on 1300 544 755.

Dhanu Eliezer

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