Monday, September 04, 2017
Collective Trademarks Promoted as Solution for UMKM Entrepreneurs
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Prayogo Serevin Wisnumurti, Cr-24

ojk

 

 


 
The Padjajaran Alumni Club (PAC) in conjunction with the University of Padjajaran Faculty of Law (Fakulta Hukum Universitas Padjajaran - FH Unpad) held a national seminar under the theme “The Utilization of Collective Marks for Cooperative and Micro-, Small- and Medium-Scale Business (Usaha Mikro, Kecil & Menengah – UMKM) Products in Order to Increase National Economic Growth” on Tuesday 29 August in Bandung.
 
During the seminar PAC and FH Unpad agreed that cooperatives were a form of economic activity which were deeply rooted in Indonesian culture and the sovereignty of the Indonesian people, and were in accordance with the national guiding ideology of Pancasila. Moreover, the mandate set out under Article 33 of the 1945 Constitution states that the economy shall be organized as a common endeavour, based upon the principles of the family system.
 
Article 33 is considered to be the primary basis for Indonesia’s economic and social systems and states that cooperatives are a fundamental pillar of the economy which are distinct from other business entities. On this basis, cooperatives should act as a counterweight to other sections of the national economy, specifically State-Owned Enterprises and Privately Owned Enterprises.
 
“Cooperatives are considered by many to be highly compatible with the culture and lifestyle of the Indonesian nation, as they encompass principles of self-help, cooperation for the common good (gotong royong - mutual aid) and various other ethical components,” PAC explained in a recent press release.
 
In order to restore the position of the cooperative as a central pillar of the national economy, a blueprint is to be introduced which will act as a set of guidelines for the effective and efficient management of Indonesian cooperatives during the carrying out of their professional activities. The goal is to create independent, high-quality and sustainable cooperative growth.
 
According to PAC, Indonesian cooperatives are currently having little significant impact upon the national economy, despite the fact that their numbers reach 209,000, the highest figure in the world. It is thus seen as imperative that cooperatives be better managed so that in time they will be able to make a contribution to the national economy which emulates that made by Denmark’s cooperatives, which currently contribute a full 68% of the country’s total Gross Domestic Product (Produk Domestik Bruto - GDP).
 
During the recent seminar, Mrs Dewi Tenty Septi Artiany, a notary who works with Indonesian cooperatives and UMKM revealed data for the year 2016 which showed that cooperatives made a contribution to national GDP amounting to 4.4% for the year. “Although the largest number of cooperatives in the world can be found in Indonesia, this amount is not balanced by the amount of income that these cooperatives are making to the state and the national economy, with the largest contribution being made by savings and loan cooperatives,” explained Mrs Artiany.
 
 
The Importance of Product Identity
 
In order to maintain competitiveness, PAC and FH Unpad agreed during the recent seminar that cooperatives should pay greater attention to a number of important areas, specifically product-identity issues which include trademarks, logos, packaging, labels, tastes, standardization, quality certification and patents.
 
FH Unpad dean, Prof. Chandrawulan, asserted that the seminar was being held not only in the context of the 60th Unpad Dies Natalis but also represented Unpad’s contribution to cooperatives and UMKM and its desire to help boost the growth of the national creative economy.
 
PAC chairman, Mr Ary Zulfikar, explained that according to data issued by Bank Indonesia in 2015, the creative economy contributed up to IDR 850 trillion per year in GDP through the fashion and culinary industries, employing approximately 15 million workers in the process. Furthermore, Cooperatives and UMKM are seen as a priority for various ministries, institutions and other relevant parties.
 
“Under the terms of Investment Activities in accordance with the Negative Investment List [Daftar Negatif Investasi – DNI], cooperatives and UMKM are given the opportunity to undertake certain activities that may only be entered into by UMKM. This proves the Government's commitment to support the development of the country’s creative economy through cooperatives and UMKM,” Mr Zulfikar asserted.
 
According to Mr Zulfikar, in order to become competitive within the realms of various economic activities, both nationally and internationally, cooperatives and UMKM should be able to face global challenges, such as product and service innovations, the development of human resources and technology, and the expansion of marketing areas. This bid for competitiveness also encompasses the use of collective marks as a branding strategy, so that products which are produced by cooperatives and UMKM can ultimately become more competitive across national and international markets.
 
During the seminar, PAC and FH Unpad also offered several reasons as to why manufacturers incorporated into cooperatives had made little effort to bolster the potential of their products through the registration of trademarks. Firstly, many manufacturers remain unaware of the issues surrounding Intellectual Property Rights, particularly trademark protection. Secondly, many cooperatives are fearful of the expenses that will be incurred during the registration of any trademarks.
 
One way of reducing costs and offering protection as regards the trademarking of goods which are produced by members of a manufacturers’ cooperatives is through the use of collective marks. Such collective marks enable cooperative members, as collective mark applicants, to bear the costs which arise from any collective brand registration process jointly.
 
The use of such collective marks is believed to offer significant benefits to UMKM business parties, especially those which are incorporated into cooperatives, as a single trademark can be jointly incorporated into a Business Group (Kelompok Usaha Bersama - KUBE) or a manufacturers’ cooperative can be established for the purpose of the joint use of a given trademark.
 
 
(ap/sp)