Power Root To Appeal Against RM23 Million Verdict In Indonesian Dispute Over ‘Ah Huat’ Trademark

Photo from Ah Huat White Coffee Facebook Page

Power Root Bhd (Power Root) announced that it will be filing an appeal in due course to the Indonesian Supreme Court to overturn Central Jakarta Commercial Court’s (Commercial Court) RM23 million verdict on its subsidiaries related to the AH HUAT trademark infringement claim by CV Ego Sun Star Sukses Mandiri (CV Ego).

“The Power Root group will rigorously contest any and all claims to protect its trademarks and trade names,” it said in a Bursa filing today (Jan 3).

The group made the decision based on the advice of its Indonesian solicitor K&K Advocates, who is in the view that the group’s subsidiaries Power Root Manufacturing Sdn Bhd (PRMFG) and Power Root Marketing Sdn Bhd (PRMK) have strong grounds to appeal the Indonesian Supreme Court.

The group was advised CV Ego had based the claim against PRMFG and PRMK on the same grounds as the earlier claim by CV Ego (CV Ego claim) on Jan 27, which had been dismissed by the Commercial Court on Aug 3.

“(Additionally), the Commercial Court did not fulfil the procedural requirements in delivering the relevant cause papers and summoning PRMFG and PRMK to appear in the Commercial Court in respect of the Claim against PRMFG and PRMK.

“As a result, PRMFG and PRMK were not aware and were not given an opportunity to present its case in defence of the claim against them.

“In our solicitors’ opinion, the Commercial Court had erroneously proceeded to deliver the Nov 15 verdict in the absence of representations by PRMFG and PRMK, and it is in contravention with applicable procedural requirements under Indonesian law,” it said.

Power Root said its two subsidiaries today (Jan 3) received a notification letter dated Jan 2, 2024 from the Commercial Court, informing that a claim had been instituted by CV Ego against PRMFG and PRMK for trademark infringement at the Commercial Court.

It said the letter also informed on Nov 15, a verdict had been granted by the Commercial Court in favour of CV Ego for Rp. 74.5 billion (equivalent to approximately RM23 million).

Prior to the verdict, PRMFG and PRMK did not receive any written notification or court document from the Commercial Court on the claim against PRMFG and PRMK, which is a procedural requirement under Indonesian law, it added.

The trademark dispute started on Jan 13 this year when Power Root (M) Sdn Bhd (PRM), a wholly-owned subsidiary of Power Root started legal action against CV Ego, a limited liability partnership incorporated in the Republic of Indonesia and its related party Lim Kok Kiong (LKK) an Indonesian citizen and a related party to CV Ego.

The suit (trademark cancellation action) was to cancel the AH HUAT trademark, which was registered and transferred without Power Root’s consent.

The trademark was initially registered with the Indonesian Director-General of Intellectual Property by LKK on Feb 21, 2013 and subsequently transferred to CV Ego on Apr 4, 2022.

The trademark was registered by LKK one day prior to CV Ego’s official appointment as Power Root group’s distributor for Indonesia on Feb 22, 2013.

“The initial registration and transfer of the AH HUAT trademark was made without the Power Root group’s knowledge and consent.

“PRM initiated the suit on the premise that the AH HUAT trademark was registered in bad faith by LKK and CV Ego, whilst CV Ego was the group’s distributor for Indonesia and was done with full awareness that the AH HUAT brand is owned internationally by the group and that such registration was done without obtaining the consent of PRM,” Power Root said.

In response to the trademark cancellation action, CV Ego institute a claim for trademark infringement against the group’s Indonesian subsidiary, PT Natbio Marketing Indonesia on Jan 27 for damages, also amounting to Rp. 74.5 billion (equivalent to approximately RM23 million).

On Aug 3, the Commercial Court awarded a judgment in favour of PT Natbio Marketing Indonesia, dismissing the CV Ego claim. CV Ego did not file an appeal against the dismissal of its claim.

On Oct 31, the Commercial Court dismissed the suit (started on Jan 13) on technical grounds as it ruled that LKK is no longer a relevant party as AH HUAT trademark is held under CV Ego.

The group said following this PRM has filed the appeal on Nov 13, as the group’s solicitors is in the view that PRM has strong grounds to overturn the dismissal of the suit, on appeal to the Indonesian Supreme Court.

It was advised that as the party who first registered the AH HUAT trademark in Indonesia, LKK is relevant to be included as party to the trademark cancellation action to complete the facts and evidence gathered to strengthen the argument that the registration was made in bad faith.

“Indonesian jurisprudence has shown that the courts have previously allowed claims where previous trademark owners had been included as party,” it added.

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