Following a parliamentary committee review of draft legislation circulated earlier this year, the Indonesian Parliament passed a new Patent Law on 28 July 2016.
The new law, which will come into effect on, or before, 27 August 2016 depending when it is signed by the President, removes some of the shortcomings of the current legislative framework and will generally improve Indonesia’s patent regime.
Applications filed before the commencement of the new Patent Law will not be affected by the new Law: they will continue to be examined pursuant to the provisions of the old Patent Law No. 14 of 2001.
The key changes introduced by the new legislation are set out below.
| Previous Law excludes the following | New Law exclusion |
| Rules and methods related to computer programs | Rules and methods that only comprise computer programs. |
The explanatory note for this exclusion suggests that computer programs with technical effect can be granted a patent.
Second medical use excluded
New exclusions include:
a. New use of a known product.
b. New form of a pre-existing compound which does not offer significant increase in efficacy
Under the new Law, employees are entitled to compensation "based on agreement, having consideration to economic benefit obtained from invention". Under the old law, employees were entitled to compensation that was "fair, having consideration to the economic benefit obtained from invention."
The new Law recognizes that employee compensation can now be based on agreement between the parties. The word "fair" is no longer used.
Previously, simple patents were restricted to products. This restriction is now removed, which means that patent protection can now be extended to processes.
Article 20 provides that the patent holder must make the product or use the process in Indonesia. It further provides, in Article 20(2), that such manufacture, or use of a process, shall support technology transfer, attracting investment and/or providing employment.
It is provided in Article 132 that the patent may be revoked for non-compliance with Article 20 although the parties that may apply for revocation on this ground are - the public prosecutor or party representing national interest or compulsory-Licensee.
With a view to expediting the application process, the time limit for completing substantive examination has been shortened to 30 months from the time the request is made. Under the old law it was 36 months. In the case of simple patents, the time limit for completing substantive examination is 12 months from the filing date, reduced from 24 months under the old law.
A statutory time frame for responding to office action has been introduced. This is in contrast to the current framework in which the time frame is set, with some degree of flexibility, by the Patent Office.
| New Patent Law Article 62 | |
| Time to respond office action | Three months |
| First Extension | Two months |
| Second extension | One month subject to fee payment |
| Third and further extension | Up to six months subject if there is an emergency* |
* The "emergency grounds" for the final extension is explained to include "force majeure situations" such as wars, revolutions, riots, strikes, natural disasters and other similar situations. Final extension requests should be supported by evidence.
The new law introduces a post grantamendment procedure to correct errors in specifications. Requests must be made within three months of the notice of grant.
Under the new law, the grace period for late payment has been significantly shortened. The patent is deemed cancelled if the annuity is not paid by the due date. The patentee may, however, request an extension of up to 12 months. The request must be filed at least 7 days before the due date and the appropriate extension fee paid.
Under the old law, a patent will only be cancelled after three consecutive years of unpaid annuity. The downside to this is that the annuity continues to be payable for the three year period, even if the patent is subsequently cancelled. This has caused some difficulty to patent holders who had not filed a formal request to cancel their patents on the assumption that they could simply allow the patent to expire after the three years. They have been faced with claims for the unpaid annuity. Unfortunately, the new law will apply only to applications filed after the law comes into effect; it does not have retrospective effect.
The new law includes provisions dealing with the grant of compulsory licences in relation to the export of patented pharmaceutical products to developing or under-developed disease-afflicted countries in need of certain pharmaceutical products.
Under the old law, it is a defence to criminal proceedings for a third party to import a patented pharmaceutical product for the purpose of seeking marketing approval during the last two years of the patent term. The new law increases this period to five years and provides a defence in relation to both criminal and civil actions.
Criminal sanctions for patent infringement have doubled to IDR 1 billion (approx. US$76,000) and IDR 500 million (US$38,000) respectively.
The new patent law also introduces enhanced punishment in cases where the infringement results in damage to health and/or environment - up to seven years’ imprisonment and/or a maximum fine of IDR 2 billion; when death results, the punishment is further enhanced to up to 10 years’ imprisonment and/or a maximum fine of IDR 3.5 billion.
