In a controversial and surprising decision, a court in Indonesia recently dismissed a trademark cancellation action brought by Philip Morris against Japan Tobacco Inc. (“JTI”), finding Philip Morris’ Power of Attorney to its Indonesian counsel defective. However questionable the decision may be, at least one valuable lesson can still be drawn from it—the need to proactively prepare a wide range of evidence when litigating in Indonesia.

The dispute focuses on Philip Morris’ attempt to register the mark MARLBORO CLEARTASTE in Class 34 in Indonesia. This application was rejected by the Indonesian Trademark Office based upon JTI’s prior registration in the same class for CLEAR, which was filed in 2006 and registered on November 5, 2007 (Reg. No. IDM000143879).

In bringing suit before the Jakarta Commercial Court to cancel JTI’s registration for CLEAR based upon non-use, Philip Morris argued that the mark had not been used for at least three consecutive years in trade within Indonesia. If proven, the registration could then be cancelled for non-use under Article 61(2)(a) of the Indonesian Trademark Act.

However, in its decision announced February 11, 2014, the Court ruled on procedural issues against Philip Morris, despite the fact that JTI did not make an appearance and Philip Morris’ allegations went unanswered. According to various Indonesian news reports, Presiding Judge Lidya Sasando stated that Philip Morris’ Power of Attorney appointing its Indonesian counsel was defective. More specifically, the Court ruled that there was not enough evidence submitted to demonstrate that the signatory of the POA had legal authority to appoint Indonesian counsel to bring the lawsuit on Philip Morris’ behalf. Therefore, based upon this finding, the Court dismissed the case.

It will be interesting to see if Philip Morris appeals and if so, what additional information is contained in the appeal brief. It is not uncommon in decisions like this for more to be going on behind the scenes than is disclosed in the court’s ruling. The deadline for filing a Notice of Appeal is 14 working days from the date of the decision, so in this case March 3, 2014.

Although this is not the first case in Indonesia where judges have ruled in this manner, it is still surprising. Often, judges in the Commercial Court, which has jurisdiction over intellectual property cases in Indonesia, will request additional proof that the signatory of the POA has the legal authority to bring the lawsuit and/or appoint Indonesian counsel.

Sometimes, judges will check a party’s Articles of Incorporation to see if the signatory’s name is listed therein. Often, it is not and the judge will threaten to therefore dismiss the case based upon a confused understanding of the standing doctrine unless additional evidence is submitted. Currently, there are no clear guidelines as to what constitutes sufficient proof of authority to authorize the filing of a lawsuit in the Commercial Courts, which only serves to further complicate the problem.

Regardless, it is clear that parties must always be ready to prove their legal authority through any available evidence, be it Board resolutions, website print outs and/or notarized letters from company presidents/CEOs, among others. Indeed, judges will often only give a party less than a week to comply with such requests; therefore, all parties should anticipate these types of issues and prepare such evidence (and their Indonesian translation) well in advance so as to reduce one’s chances of being thrown out of court unexpectedly.