Malaysian-based Power Root Sdn Bhd were recently ordered by an Indonesian court to pay RM23 million (US$4.88 million) to an Indonesian company for alleged infringement of an Indonesian trademark of its own ‘Ah Huat’ brand for coffee and tea beverages. The court made the final decision without giving the company the opportunity to defend its case.
Power Root will appeal as part of its effort to regain control of its own brand ‘Ah Huat’ in Indonesia, which was registered by another company there without its permission.
Going back to history, Power Root officially appointed Indonesian company, CV Ego Sun Star Sukses Mandiri as its official distributor for Indonesia in February 2013. However, just a day before the appointment, an Indonesian person Lim Kok Kiong, a related party to CV Ego, registered the ‘Ah Huat’ trademark in Indonesia with the Indonesian Director-General of Intellectual Property. Subsequently, in 2022, Lim transferred the ownership of the ‘Ah Huat’ trademark to the company CV Ego.
Throughout the whole process, Power Root was unaware of the above events which took place without its approval.
In January 2023, Power Root (M) Sdn Bhd filed a legal action at the Central Jakarta Commercial Court in Indonesia to cancel the trademark ‘Ah Huat’ initially registered by Lim and later transferred to CV Ego. The decision to cancel was because it was registered in ‘bad faith’ by Lim and CV Ego. Ah Huat brand is renown internationally and owned by the Power Root Group.
Before the above case is concluded, CV Ego filed a separate court action just 2 weeks later to claim RM23 million (US$4.88 million) in compensation from Power Root’s fully-owned Indonesian subsidiary, PT Natbio Marketing Indonesia for alleged infringement of the ‘Ah Huat’ trademark. But the Commercial Court in Indonesia on August 2023 dismissed CV Ego’s attempt to claim compensation and ruled in favour of Power Root’s Indonesian subsidiary PT Natbio. This is because Power Root Group had first filed the ‘Ah Huat’ trademark in Malaysia and several other countries on April 2012 as compared to CV Ego’s trademark which was filed in February 2013.
In addition, the lawsuit is premature due to ongoing court case to cancel CV Ego’s ‘Ah Huat’ trademark in Indonesia. Unfortunately, in October 2023, the Commercial Court in Indonesia dismissed Power Root (M) Sdn Bhd’s lawsuit for the cancellation of the trademark ‘Ah Huat’ in Indonesia, based on technical reasons as it ruled that former trademark owner Lim is no longer a relevant party to the court case as the ‘Ah Huat’ trademark is now held under CV Ego.
Power Root (M) Sdn Bhd had filed an appeal in November 2023 to the Indonesian Supreme Court. Meanwhile, Power Root Bhd’s 2 fully-owned subsidiaries were instructed to pay RM23 million (US$4.88 million) to CV Ego.
Power Root Group said its Indonesian lawyers K&K Advocates has advised that CV Ego’s RM23 million claim against Power Root’s two Malaysian subsidiaries was based on the same grounds of CV Ego’s previous failed claim against PT Natbio (which the Commercial Court dismissed on August 2023). The Indonesian lawyers also said the Commercial Court had failed to fulfil the procedural requirements of delivering court papers and asking the 2 Malaysian subsidiaries to appear in the court in Indonesia, saying that this resulted in the 2 companies being unaware and not given an opportunity to present its case in defence of the claim.
The Power Root Group will rigorously contest all claims to protect its trademarks and trade names. Established in 1999, Power Root is a leading regional beverage player, with brands including Alicafe Ah Huat, Extra Power Root, Frenché Roast, Oligo and Per’l Café. It recorded sales revenue of RM455.76 million (US$97 million) in its latest financial year ended March 2023.
