Patent Law in the Republic of Indonesia

Patent law in the Republic of Indonesia

The Republic of Indonesia is the largest economy in Southeast Asia and the 16th largest worldwide. It is also the most populous country in the region with an estimated total population of over 255 million and represents a huge market opportunity for European trade.

Despite its size and status as ASEAN economic heavyweight, Indonesia is currently just the EU’s fifth largest trading partner in the region. This being said, growth in Indonesia-EU trade is steady, with EU imports to Indonesia rising 5.2% and Indonesian exports to Europe by 16.5% between 2009 and 2013[1], total trade in 2013 reaching EUR 24.1 billion.

Indonesia represents a growing potential market for EU products and services, with rapid economic development, increasingly technological complexity in industry, and increasing disposable income leading to increased demand for quality machinery and products. Chief imports include high-tech machinery and equipment, chemicals, fuels, and foodstuffs.The Indonesian government has also highlighted the importance of development in certain sectors and is actively supporting and promoting growth in fashion, ICT, film, publishing, music and R&D, thus creating potential markets for EU imports and investment in these areas. Finally, as disposable income rises smartphone and other electronic device penetration of the market is on the rise and Indonesia’s large population is a significant contributing factor to predictions that Southeast Asia is set to be the largest growth market for the smartphone and app markets in coming years.

Indonesia is also a manufacturing base for textiles and (semi) manufactured goods, offering attractive savings on labour comparative to EU based manufacturing.

IP law in Indonesia

Indonesia is a member of the World Trade Organization (WTO), and has ratified the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs Agreement) along with the Paris Convention for the Protection of Industrial Property[2].

As a result of accession to these international agreements, together with extensive domestic legislation, Indonesia’s IPR protection is considered to be comprehensive, providing appropriate levels of protection for all rights in accordance with international standards. However, this being said, there has been some criticism of enforcement mechanisms in the Republic, with international pressure for strengthening for an effective enforcement regime.

What are patents?

A patent is a right granted to an inventor to commercially exploit his or her invention to the exclusion of others. It can be obtained for a new or improved machine or process, article of manufacture, or chemical composition.

Patents in Indonesia

Indonesia operates its patent system on a ‘first-to-file’ system, meaning that the first person to file a patent application in the Indonesian jurisdiction will own that right once the application is granted.

Two types of patent are recognized in Indonesia;

• Standard Patents – These cover products and processes which are new, have a practical use, and demonstrate an ‘inventive step’ in development from similar applications.
• Simple Patents – Valid for products or devices which are new and have a practical use, but do not necessarily represent an ‘inventive step’.

In theory the application and examination process for simple patents is shorter, although the term of protection is shorter, lasting just 10 years from the filing date, subject to annual payments. Standard patents are valid for up to 20 years, subject to annuity payments, although the application process is usually longer.

For all applications, applicants are required to specify the scope of protection sought and to explain how the invention functions through provision of technical descriptions and drawings.

Registering patents in Indonesia

The inventor of a patent or his attorney can file a patent application. Where assignment of the patentable rights has taken place, the application must include a statement from the inventor, together with adequate supporting evidence to show that the applicant is entitled to the invention. All applications must be filed in the Indonesian language, Bahasa Indonesia.

Registrations can be filed with:

The Directorate General of Intellectual Property Rights
Ministry of Law and Human Rights
Administrative of the Directorate of Patent
Jalan H.R. Rasuna Said, Kav 8-9
Jakarta Selatan 12190, Indonesia
Tel: +62 21 579 05619

Applications are submitted to the Directorate General of Intellectual Property Rights. The documents required for filing are as follows:

• Patent specification (in Bahasa Indonesian) including description, claims and drawings
• Application form
• Power of Attorney in the name of the local law firm and patent agency, if the application is filed by the attorney
• Declaration of ownership
• Assignment of Invention (to be executed by the inventor where appropriate)

No legalization or notarization of documents is necessary.

Simple patents can take 2-3 years to process and standard patents usually take 3-5 years from date of filing. Standard patents applications are published in the Official Gazette (usually around 18 months from date of filing) and opened up to inspection and opposition claims from any third parties for a period of 6 months. After this 6 month publication period, the inventor must formally request a substantive examination (this must be done within 36 months of the date of filing). Simple patents are published 3 or more months after the date of filing and are examined following publication.

As a Convention country, applicants can claim the ‘priority date’ of a previous application in a member county up to 12 months after this initial application has been made.

Approximate fees for patent applications are as follows:

Official fee / EUR 47
Agent fee / EUR 580-800
Translation costs / EUR 10-40 per A4 page
Likely costs to be paid over the course of the application process / EUR 2,000-3,000
Inclusive of the following:

• The official fee to request for examination
  - Approx EUR 100
• Arrangement fees for publication
• Overcoming objections and amendment of specification
• Certificate collection and checking
  

It should be noted that at present Indonesia’s patent framework is still in developmental stages and there are still some issues which EU SMEs will need to be aware of when making applications. These will be discussed in more detail in the next section.

Issues and developments in Indonesian patent law

Listed below are some of the issues and upcoming developments pursuant to the Indonesian patent law system.

Patent searching is recommended so as to avoid possible infringements on any valid and existing patents. However it should be noted that full searches are still not yet possible as patent records are still not fully computerised. As such, searches can be only made into basic bibliographic data and abstracts of inventions, but not complete specifications.

Most patent applications are granted based on corresponding applications of foreign grants. This is primarily because local examiners are still not equipped to undertake independent full search and examination procedures yet. Such foreign grants can be included with the application and should be from patent offices that are known to conduct independent examination.

Indonesia is a member of the ASEAN Patent Examination Co-operation (ASPEC), a regional patent work sharing programme involving 9 of the 10 IP offices in the ASEAN member countries (only Myanmar is not yet involved). This cooperation agreement aims to reduce complexity, save time on applications and improve the quality of search and examination. Through this mechanism references made to an earlier examination, already performed in one IP office will help an examiner in the other IP office to better understand the invention claim, reduce search volumes and develop a more comprehensive examination strategy. In theory this would result in expedited applications for patents in Indonesia, where a patent is already held in another ASEAN country. Indonesia is also party to the Japan Patent Office Prosecution Highway in which the examination report issued by the Japan Patent Office can be used to expedite the examination process of a corresponding patent applications by the Indonesian Patent office.

It should be noted that all patent specifications need to be translated into the local language and care should be taken to avoid translation error. This is a common issue, with translations often being too literal. This problem is compounded by the lack of procedures to correct such errors once a patent is granted. Especially great care should be taken when translating the individual claims as these tend to be the most important part of the document.

When it comes to issues of infringement or invalidation claims, judges in Indonesia are still not familiar with patent matters and rely heavily on the Patent Office. Though not binding, results of overseas litigations on the same patent can be useful in helping judges make a decision in Indonesia and provision of these details can help expedite the litigation process.

Finally, Indonesian patent law is still very much a developing framework and SMEs are encouraged to check for recent developments on the relevant section of the WIPO website[3] and seek professional legal advice where appropriate.

Enforcement

Whilst the IP laws in Indonesia are largely seen to be compliant with the Republic’s obligations under the Agreement on Trade-related Aspects of Intellectual Property (TRIPs), the enforcement and border protection systems have yet to develop sufficiently to present an effective control on IP infringement and infringement rates remain high.

SMEs working on a budget should first consider private mediation via legal professionals as a first stop solution for approaching infringers. This is especially attractive for SMEs as it is far less costly and time consuming than alternative actions.

In theory there is also a usable criminal enforcement system, however in practice such actions have been difficult for foreign companies due to lack of transparency in police procedures, among other factors. A new enforcement agency, the Directorate of Investigation, has recently been set up, however it still lacks the resources required to be effective in combatting piracy issues and generally only handles around 30 cases a year usually restricted to Jakarta.

Patent infringements are ‘complaint-based’ crimes, requiring IP owners to file a formal complaint with the police before any action is taken.Initiating criminal proceedings with the police can also be very costly, with raids costing between EUR 8,000-19,000. As such, these actions should be reserved for targets which would generate maximum publicity, and therefore act as deterrent for other existing and potential infringers. Most raid simply result in the confiscation of the infringing goods with no further action. IP laws provide for substantial fines and prison sentences for infringers, up to EUR 350,000 and seven years imprisonment. However, only minor fines are usually given and there are large inconsistencies in the sentencing practices of criminal courts.

Civil litigation, is even more expensive than criminal raid actions, and is only generally preferred for patent cases as the issues involved can be more complex. Good evidence preparation is essential when dealing with the Indonesian civil system in IP cases. This can involve evidence from prior raid actions and interviews, surveys, investigator reports, testimonies, video or tape recordings. Overseas evidence will need to be legalised. As discussed in the previous section, the Indonesian judiciary is still fairly inexperienced in handling patent cases and any official case reporting of similar actions in other jurisdictions can also help strengthen a case.

Even if an action is successful however, the legal costs are not recoverable and any awards may not cover the whole cost of the action as principles for calculating damages are not yet established and vary wildly from court to court.

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email () and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The South-East Asia IPR SME Helpdesk is co-funded by the European Union.

To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at .

[1] DG Trade, European Commission

[2] For more information on these treaties visit the World Intellectual Property Organization (WIPO) website:

[3]