Reliable and up-to-date statistics are not always available when it comes to intellectual property matters in Indonesia. The release of various new trademark statistics by the Indonesian Intellectual Property Office (DGIP)—through its website, official statements and its 2012 Annual report—is therefore very much welcomed.

At a high level, the statistics surprisingly show that trademark applications in Indonesia leveled off in 2013 after years of double-digit increases. Despite the plateau, Indonesia is still the Southeast Asian (ASEAN) country with the highest volume of trademark applications.

Taking a deeper look at these statistics reveals some telling trends and interesting information.

Trademark applications filed with the Indonesian Trademark Office in 2013 totaled 62,813, according to a DGIP spokesman. This represents a miniscule 0.57% increase compared to 2012, when 62,455 applications were filed. What is interesting about this leveling off is that since 2010, trademark applications had increased by at least 11% each year and most recently by 17.4% from 2011 to 2012. And over the past 10 years, the number of trademark applications filed in Indonesia has increased approximately 200% percent, from 20,660 in 2003 to the aforementioned 62,813 in 2013.

Despite this plateau, the most recent numbers solidify Indonesia’s status as the largest trademark jurisdiction in Southeast Asia on a volume basis. For example, according to WIPO, the ASEAN country with the second highest number of applications in 2012 was Thailand with 44,963, followed by Vietnam (34,341), the Philippines (20,202) and Singapore (20,150) (2012 statistics for Malaysia were not available).

Given that Indonesia is Southeast Asia’s largest economy and most populous country, perhaps this should not be surprising, particularly considering the extremely lax enforcement of its trademark use requirements. But a closer look at the source of these applications reveals a very interesting fact.

For each of the four ASEAN countries listed above, the percentage of applications filed in 2012 by non-residents ranged from 34% (Vietnam) to 77% (Singapore). Previous years are quite similar. While statistics for 2012 and 2013 are unfortunately not yet available for Indonesia, previous DGIP statistics indicate that non-Indonesian entities historically have accounted for just 5%-11% of all applications filed. For example, of the 53,196 trademark applications that were filed in 2011, just 2,543 were filed by non-Indonesian entities (approximately 4.8%). While the percentages are slightly higher for previous years, they are still well below their ASEAN counterparts.

There are various implications that stem from these low levels of foreign filings in the face of high rates of domestic applications. First is the ongoing problem of trademark squatting. Indonesians have long understood the value that a trademark can hold, though perhaps too much so in some cases, as the historical problem of trademark piracy and other bad faith registrations continues to this day. With a disproportionately low number of applications filed by non-Indonesians over the years, it is likely that this unfortunate trend of trademark squatting will only continue.

The second implication is the potential for locally owned trademark registrations—made in good faith or otherwise—to increasingly block Indonesian registration of foreign brands. As such, foreign companies may continue to have a difficult time securing registration of their brands in Indonesia.

These situations have the potential to be exacerbated once Indonesia joins the Madrid system in 2015 or sometime thereafter, as foreign filings are expected to increase in the wake of Madrid accession. Therefore, an increasing number of foreign filers may have to resort to trademark cancellation actions to recapture or clear the way for their brands in Indonesia, all at a high cost in terms of time and money to foreign brand owners.

One final set of newly released trademark statistics warrants examination. For the first time, the Indonesian IP Office has released a statistical breakdown of applications based upon Nice Classification.

These statistics, which are only for 2012, show that 4,134 applications claimed goods in Class 25, the most for any single class during this time period. Classes 30 and 35 received the next highest total amounts, with 3,611 and 3,099 applications respectively. Class 09 was the fourth most common Nice Classification claimed in Indonesia for 2012 with 2,847 applications. Finally, Class 05 was the fifth most popular class claimed in 2012, with 2,647 applications.

While these may be considered only limited statistics in other jurisdictions, for Indonesia they constitute the most complete set of trademark statistics currently available. From them, we can not only get a sense of the sheer volume of trademark filings in Southeast Asia’s most populous country, but also who is doing the majority of the filings in Indonesia and in what classes.

And above all else, we can see that foreign filers would do well to proactively file in Indonesia as soon as possible to avoid a host of expensive and time-consuming complications resulting from continued high domestic interest in trademark registrations.