B. Trademark Violation by SME

     Certain possibility of the trademark violation and thus, bring injury to the original holder can be described as follows: first, the loss or less distinction ability of the mark, which means that the mark becomes loosing its function.

     Second, there appears confusion for the consumers to identify the products using original mark and those using the counterfeit mark (though in some cases, the counterfeiting products are sold in much lower price than those of the original with lower quality, that enable the consumers to distinguish it easily with the originals.) Such confusion for various reasons will tend to end up in the consumers failure to relate the products to the owner of the mark. This case falls under the act of misleading or deceiving the consumers.

     Third, trademark has selling price and the price is unfairly taken by other parties who at the same time also take over the market of the original marks. In this situation, careful examination has to be taken to conclude whether or not there occurs a different market of the two products, the originals and the counterfeits, due to the different price and purchase power of the consumers. Nevertheless, in spite of the possibility of such assumption, taking benefit of others advantage by illegally overriding the image is regarded as unfair act and violates the exclusive right of trademark holder to use its mark and the image attached to it.

     Fourth, in certain cases, it is possible that illegal use of others trademark will cause the failure for the consumers to associate the quality of counterfeiting products with the originals. The implication of such failure is the damage or the declining of the original mark image. In this point, mark violation, again, brings about injury on behalf the original mark holder.

     Despite all the destructive effect of mark violation, it is a cheap shortcut to get market. For those having not enough capital to carry out product research and invention to discover innovation, overriding attributed in a well known will be a way in reducing of expenditure that might be vital to survive the existence of the business.

     Well known trademarks usually become the main target to be violated and it is very easy to find the false products in the market in much lower price than the original. Such violation ranges from international well known trademark such as Luis Vuiton, Yves Saint Laurent, Gucci or Armani, to local trademark, such as Dagadu.

     One interesting factor is the fact that consumers are willing to buy such products, though they know that the products are not the original. The reason is that certain consumers wish to use well known brand product, because the brand will affect the social status of them. Again, the problem we are dealing with here is culture. Further, then the legal question will be: is that considered as trademark violation, since it does lose the distinguishing power? The quick answer is affirmative based on several considerations:

     first, such act is considered as deliberate and unlawful use of other trademark as referred to in RI Trademark Law (Art. 76 par. 1, 90, 91, and 94).

     Second, such use is based on motive to take benefit from the value attached to the original trademark. The benefit in general can be in form of taking the market of the original and therefore get the benefit from the same price as the original (in this case, loss or less distinction ability of the mark, which means that the mark becomes loosing its function or consumer confusion becomes essential), or get benefit from its own market as a result from providing the value of the original trademark on false but much cheaper product (in this case, such confusion of the consumers does not exist, but the consumers take the product to get the image of the original trademark). The case with regard to certain number of violation committed by SME as described above grounds on the last motive.

     The nest question then, how to eliminate such violation, when the consumers are still there, queuing in the market to get the false products? Hence, trademark law enforcement will also involve a proper treatment to the consumers.

C. Violation against SME Trademark

     In certain cases, though perhaps it is quite rare nowadays, there is possible violation against SME trademark. In Indonesia this issue has been not popular yet, in comparison with the two previous issues. Nevertheless, it is necessary to put further consideration on the potential problems that might emerge with regard to SME trademark protection. As Thomas A. Timberg put:

     “The hypothetical case can be illustrated here: a group of SME serves local market and later on a big company also plan to serve the market. The big company use a trademark that is identical with a trademark belongs to the SME. This company pretend as such that the SME business has been transferred to the company; therefore, there will be no question or doubt regarding the identical trademark of them.”⁴⁷

     The other case emerges when a registered trademark of an SME is violated by another SME, such as violation against Dagadu – trademark of T-shirt from Yogyakarta. Instead of objection of the trademark holder, the violation keeps going.⁴⁸

     This case will be important to be considered, to attain understanding in the future on the need of SME not only to understand the importance of trademark protection and not to violate other trademarks, but also to be protected with regard to its trademark instead.

V. Concluding Remarks

     We have already referred to in the above explanation on the relative merits with regard to trademark law implementation by SME. We have also put emphasize on the significant role of SME in Indonesian economic. Indeed, constant and reliable effort to attain understanding on the characteristics and the needs of SME will be most of all important before taking further step to enforce trademark law. Such effort will involve thorough and conscientious study on economic, social, and legal aspects of SME business.
One considerable factor resulting in the decreasing number of SME registering their trademark is the more high cost procedure. Certain numbers of SME violates trademark law based on particular motive and therefore has particular modus of operandi. And finallyit is necessary to be taken into account SME-trademark violation conducted by bigger enterprise; this seems to be out of concern, but cannot be neglected in the effort to build trust on the equal legal protection for all.
The message is hence clear; the need for the general public to respect the essential function of trademark as part of the endeavour to develop SME is not avoidable. Fairly large in amount of SME contribution in Indonesian economic will be best supported with fair business dealing concerning trademark use and thus, the call for the government role to develop more reasonable effort to improve SME in such respect is deemed necessary

47. Thomas A. Timberg brings analysis on this matter in “Merek Dagang dan Usaha Kecil di Negara-negara Industri – Bagaimana Usaha Kecil Menggunakannya”, loc.cit.

48. http://arkeologi.net/index1.php?id=view_news&ct_news=520