For well-known trademarks, particularly those consisting of two or more words, each part of the trademark can be just as valuable as the others. This was clearly shown in the Gudang Garam vs Gudang Baru case.

In Indonesia, Gudang Garam is a very well-known trademark for rokok kretek or clove cigarettes. Most Indonesians prefer clove cigarettes to the conventional non-clove cigarettes (i.e., Marlboro, 555, Davidoff, etc.), for its strong herb sensation.

The Gudang Garam company was founded by Tjoa Ing Hwie, a Chinese Indonesian who later changed his name into Surya Wonowidjojo. Wonowidjojo’s foray into the cigarette business began when he started working at his uncle’s cigarette factory, Cap 93, and eventually became the Company Director. In 1956, Wonowodjojo left Cap 93 to establish his own cigarette business, initially using “Inghwie” (his Chinese name) as the brand of his cigarette products. After two years, he renamed the company and registered it as Pabrik Rokok Tjap Gudang Garam or Gudang Garam Cigarette Manufacturer.

The name Gudang Garam came to Wonowidjojo in a dream, where the salt warehouses (or gudang garam in Indonesian) across the street from the Cap 93 building were particularly pronounced. Wonowidjojo believed that this vision was a symbol of luck and put a sketch of his vision on the packages of his clove cigarettes. As time passed this belief was proven true and Gudang Garam became one of the biggest cigarette manufacturers in Indonesia.

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As mentioned initially, usually for a well-known trademark, each part of the trademark is just as valuable, presenting a chance for irresponsible third parties to utilize them to their advantage for unfair gain. As a party involved in the cigarette industry, Ali Khosin realized the power of the Gudang Garam name, as seen by Gudang Garam’s domination of the cigarette market in Indonesia. Trying his luck, he named his cigarette products Gudang Baru, and filed trademark registrations for his brand in class 34. This move did not escape the attention of Gudang Garam, as Ali Khosin not only had a similar name but also had two warehouses as part of the logo.

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Believing this could affect their customers’ perception of their product and possibly lead them to have the impression that Gudang Baru is related to Gudang Garam, Gudang Garam filed a trademark cancellation lawsuit against Gudang Baru at Commercial Court in Surabaya. The court decided that (i) Gudang Garam is well-known mark, (ii) the trademark registrations of Gudang Baru have similarities in substance with the Gudang Garam trademark, (iii) Gudang Baru was registered in bad faith, and (iv) the registration of Gudang Baru is to be cancelled.

Ali Khosin, naturally displeased with the decision, filed for cassation at the Supreme Court. At this stage Ali Khosin, represented by the ex-Minister of Justice and Human Rights, went all out to claim his right to the Gudang Baru trademark, and somewhat unexpectedly, the Supreme Court reversed the decision made by the Commercial Court.

Gudang Garam now has a final chance to seek justice by filing a Judicial Review in the Supreme Court. In Indonesia, a Judicial Review is usually filed when (i) the Party has found new evidence (novum), and (ii) there was an error of law in the decision made by the Supreme Court judges contrary to higher legislation. However, there is as yet no indication that Gudang Garam is going to file a Judicial Review.

Learning from this case, for trademark owners or trademark attorneys whose clients are companies with well-known marks, it is advisable to file protection for the derivative terms of the trademarks. This way, we narrow the gaps for parties intending to misappropriate the mark in bad faith.