How Indonesian Government Tackles the Challenges of Patent Implementation

According to Law No. 13/2016, patent is an exclusive rights given by the state to investors for their inventions in technology and to carry out the invention by themselves or to give consent to others to carry it out for a specific period of time. In 2016, according to the data from the Directorate General of Intellectual Property of the Ministry of Justice and Human Rights (Kemenkumham), the total number of applicants from Indonesia was only 940, compared to a total of 5854 overseas applicants.

The graph below shows that most patent holders in Indonesia came from foreign countries such as Japan, USA, Germany, Switzerland, and others. Meanwhile, patent owners from Indonesia only add up to 14% from the total number.

Some issues appeared in the article 20 from Law No. 13/2016, which stated that patent holders to either manufacture their patented products in Indonesia or to use their patented processes in Indonesia. The manufacturing of the products or the use of the processes should support the transfer of technology, drive investment absorption and/or provide job opportunities.

The bright side is the regulation can give a protection for Indonesia’s assets. However, the regulation creates so many challenges for the investors, particularly foreign investors.

It was known that the US Chamber of Commerce represented many companies to present their objection on Law No. 13/2016 article No. 20. According to them, the regulation was not practical and against the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

With many companies facing the challenges to implement their patent, the Ministry of Law and Human Rights released the Ministerial Decree No.15/2018 which is designed to explain the bureaucratic system and the flow of patent implementation that must be pursued by the patent holder. Below is the chart which explains the regulation:

Based on the Ministerial Decree, we can analyze the impact of the patent law with the following SWOT (strength, weakness, opportunity and threat) analytic:

Strength

• The the Ministerial Decreeinforms patent owners about what to do next if they do not meet the requirement of patent implementation.
• The transfer of technology gives benefits for Indonesia’s business development in a long term.

Weakness

• The decreeis not written in detail (no explanation related to “use of process,” no approved appraisal indicator, no indicator related to requirement value).
• There is no explanation related to the bureaucratic procedure of patent implementation if it has been eligible.

Opportunities

• It can help the potential investor in assessing feasibility and preparing patents in Indonesia.
• It will strengthen community’s participation in the implementation of patent in Indonesia.

Threat

• There is no limitation for the postponement of patent implementation. It can be used unwisely by patent owners.
• Corruption by the investor or agency during bureaucracy processis likely to happen.