How a Trademark License Can Protect Foreign Brands from Bad Faith Filings in Indonesia

June 16, 2025
1:05 pm

Foreign brands expanding into Indonesia often face a unique challenge: bad faith trademark filings by local entities. A strong trademark license strategy, when executed properly, is a powerful legal shield to prevent brand hijacking. One of the most recent and relevant examples is the 2025 case involving Chinese beauty brand Florasis, which highlighted the vulnerabilities foreign brands face and how legal preparedness makes all the difference. Businesses looking to enter the Indonesian market must consider both proactive brand protection and legal representation—services that AMR Partnership can provide.

The Florasis Case: A Turning Point in Indonesia’s Trademark Landscape

On May 7, 2025, Florasis, a prominent Chinese cosmetics company, won a critical battle in Indonesia’s trademark court. The company had discovered that a local individual filed for the Florasis trademark, despite having no affiliation or prior use of the brand. This act, classified as a bad faith trademark filing, is a common risk foreign companies face when they delay registering their marks in Indonesia.

The Indonesian court sided with Florasis, affirming the brand’s international presence and reputation, thus invalidating the local filing. However, what made this victory possible was not only the brand’s global standing, but also its proper documentation and licensing agreements that supported its claim to ownership and prior use.

This landmark decision is now a reference point for other foreign companies, emphasizing the importance of having a trademark license in place when entering a market like Indonesia, where first-to-file principles can often disadvantage overseas players.

Understanding the Role of a Trademark License in Cross-Border IP Strategy

A trademark license is a legal agreement that allows one party (the licensee) to use a trademark owned by another party (the licensor) under specific terms and conditions. This is not just a formality—it can be critical proof of brand control and legitimate use, especially in jurisdictions like Indonesia that apply a first-to-file principle.

A well-documented license can:

Serve as evidence in trademark disputes
Support the licensor’s claims of prior use
Establish a timeline of brand activity in the market
Prevent brand dilution and infringement

For foreign brands, assigning or licensing the trademark to a local distributor, subsidiary, or representative can show legal continuity and intention to use the mark in Indonesia. This adds legitimacy when contesting a bad faith registration.

This is why engaging a reputable intellectual property firm like AMR Partnership is so critical. Their team ensures that licenses are drafted, registered, and monitored in compliance with local IP laws. Visit amr.co.id to explore how they can protect your brand’s integrity across Southeast Asia.

Legal Framework in Indonesia: First-to-File and Bad Faith Provisions

Indonesia adheres to the first-to-file principle, which means the first entity to file a trademark application generally secures the rights to that mark. Unlike common law countries where prior use might take precedence, Indonesian law places more weight on who files first—creating an environment ripe for bad faith filings.

To counter this, Law No. 20 of 2016 on Trademarks and Geographical Indications includes clauses that allow trademark applications to be rejected or cancelled if made in bad faith. However, proving bad faith can be difficult without solid documentation—such as licensing agreements, international registrations, or evidence of commercial use.

The Florasis case demonstrates how an international brand, armed with a licensing framework and international IP protection, can effectively nullify a local bad faith registration. Still, it’s a reactive measure. Proactive licensing and early registration are the optimal strategies.

Best Practices for Foreign Brands Expanding into Indonesia

To avoid becoming a victim of trademark squatting or bad faith filings, foreign brands should take the following measures:

Register Your Trademark Early: Don’t wait until entering the market. File in Indonesia as soon as the brand is launched or as part of your global IP strategy.
Use a Trademark License Strategically: Assign or license your mark to a trusted local entity. Make sure it is properly documented and, if possible, recorded with the Indonesian IP Office.
Monitor Your Brand: Set up trademark watching services to track potential infringements or conflicting applications.
Partner with Local IP Experts: Firms like AMR Partnership understand the nuances of Indonesian IP law and can offer tailored advice for your industry and goals.

By implementing these practices, your brand can establish a strong legal foundation to operate confidently in Indonesia.

The Business Impact of Losing a Trademark Battle

Losing a trademark dispute—especially one stemming from a bad faith filing—can have devastating business consequences:

Rebranding Costs: Changing your product name, logo, and packaging can be expensive and confusing for customers.
Loss of Market Access: If you’re barred from using your own brand, your entire expansion plan can fall apart.
Damaged Brand Reputation: Disputes can create uncertainty about brand legitimacy in the eyes of consumers.

In contrast, a strong trademark license shows intent, use, and ownership—strengthening your position against any legal or commercial challenge. With the right legal counsel, like the experienced attorneys at amr.co.id, you can safeguard your brand and avoid these pitfalls.

Licensing Beyond Legal Protection: A Tool for Market Strategy

Trademark licensing isn’t just a defensive legal tactic—it can be part of a broader business strategy. Licensing your trademark allows you to:

Expand faster through trusted local partners
Reduce operational costs while increasing brand reach
Adapt to local preferences while maintaining brand control

When done correctly and with the guidance of trademark professionals, licensing can accelerate market entry while reducing risks. However, improper licensing—unclear agreements, lack of oversight, or unregistered use—can backfire.

This is why businesses trust AMR Partnership. They don’t just handle trademark licensing as a task—they integrate it into a brand’s growth strategy with foresight and legal rigor. Whether it’s drafting license terms, negotiating with licensees, or registering with the Directorate General of Intellectual Property (DGIP), AMR ensures you’re protected at every step.

Why Choose AMR Partnership for Your IP Needs in Indonesia

For over three decades, AMR Partnership has been one of Indonesia’s most respected law firms specializing in intellectual property. Their services go far beyond basic filings—they provide:

Trademark Licensing Strategy and Drafting
Dispute Resolution for Bad Faith Filings
Trademark Monitoring and Watching Services
Cross-border Licensing Support
IP Portfolio Management

Backed by a global network and deep experience in ASEAN IP systems, AMR helps foreign brands navigate the complexities of the Indonesian legal system with confidence and clarity.

Visit amr.co.id today to speak with an expert and protect your brand before someone else files it first

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