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      Indonesia: New amendments to IP laws

      Published on 03 Nov 2020 | 3 min read

      In October 2019, the Indonesian President highlighted in his inauguration speech the need to revise several laws that hinder foreign investments and job creation. The process of drafting a reform bill called the Omnibus Bill on job creation started immediately thereafter.

      Last month the Indonesian Parliament approved the passing of the Omnibus Bill which revised in total 76 laws. This is a significant achievement considering it usually takes years for a particular law to be passed and reflects the urgent need for reforms to spur economic recovery.  

      On November 2, 2020 Indonesia’s President Joko Widodo signed and endorsed the Omnibus law on the Job Creation and the Government issued the same under the name Law No.11 of 2020 concerning Job Creation (“Job Creation Law”), which took effect on the same day. 

      Here is a summary of the changes to the IP laws.   

       

      Patents 

      Under Chapter VI on Ease of doing Business, Article 107 of the Job Creation Law amends certain provisions in the Patent Law No. 13 of 2016.  

      Article 20 of the Patent Law obliged patent holders to manufacture the product or use the process in Indonesia within 3 years of grant date. Other than the risk of compulsory license or cancellation of patent in case of breach of the article, the provisions of the Patent Law were also not in line with the TRIPS Agreement and could not be applied to all types of technology.   

      While it was hoped that article 20 would be deleted entirely, a compromise appears to have been reached in that the use of the patent is no longer restricted to only production in Indonesia. The importation or licensing of the patented product/process would also be considered as implementation of the patent in Indonesia.  

       

       

      Article 82 of the Patent Law on compulsory licensing has also been amended to be consistent with the wider definition of use of the patent in Indonesia.   

      We understand that as a result of the amendments which address the concerns of some patent owners, the Patent Office may no longer be accepting any new request for postponement to use the patent. Therefore, patent owners who are unable to demonstrate that they are producing/importing/licensing the patent in Indonesia after 3 years from grant, still face the risk of a cancellation action/compulsory licensing. 

       

      Simple Patents 

       

      There has been an increase in number of simple patent applications in Indonesia and the amendments above are efforts by the Patent Office to try and clarify the scope of what qualifies as simple patents and distinguish them from patents.   

      To speed up examination and decision to reject/grant of simple patents, these are the additional amendments:

      • Request for substantive examination must be submitted simultaneously at the time of filing the simple patent  
      • Simple Patent will be published within 14 days of filing and the publication period is only for 14 days following which it will proceed to substantive examination  
      • Any opposition during the 14-day publication period will not be considered as additional material during the substantive examination. (This suggest separate proceedings so as not to delay the start of substantive examination) 
      • Decision as to approve or reject the simple Patent application is shortened from 12 months to 6 months from the filing date.

       

      Trade Mark  

      Article 108 of the Job Creation Law amends Law No. 20 of 2016 on Marks and Geographical Indications by providing as follows:  

      • an additional absolute ground in article 20 (g) - a trade mark cannot be registered if it contains a shape that is functional.   

      While the Trade Marks Law recognizes 3D marks, there have been various applications recently that are not particularly distinctive and really should be free for use by others. The Trade Marks Office has rejected these applications on the lack of distinctiveness and usually will not consider acquired distinctiveness through use to overcome the objection. With this new ground, the basis for rejection of purely functional shape marks is now clear and brand owners should review to see if a combination of colour, mark and shape may be an alternative form of some protection for the packaging at least. 

      The other amendment is that Substantive examination is now shortened from 150 days to 90 days.  

      Overall, the changes to the IP laws are a positive catalyst for foreign investment in Indonesia. Together with other reforms, the new law may redefine Indonesia’s competitive position in the ASEAN and contribute to long-term economic development.  

      For more information, please contact us at jakarta@rouse.com 

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      Principal
      +632 403 1686
      Principal, Indonesia Head of Patent Agency Group
      +62 21 769 7333
      Principal, Indonesia Head of Trade Marks
      +62 21 769 7333
      Principal
      +632 403 1686
      Principal, Indonesia Head of Patent Agency Group
      +62 21 769 7333
      Principal, Indonesia Head of Trade Marks
      +62 21 769 7333