Intellectual Property Rights
General Overview of Intellectual Property Rights
After World War II, there was a significant increase in cross-border exchanges of goods, services, capital, and knowledge. The upward trend of cross-border exchanges initially caused the lack of protection for human creations. Such problem was exacerbated by the rapid development of technology, allowing many people to use other people's inventions by multiplying them arbitrarily to get the maximum benefit. With this concern, the international community has been pushing the agenda to prevent commercial exploitation of the invention and give the creators and owners the exclusive right to benefit from their invention through IPR.
Agreement on Trade Related Aspects of Intellectual Property Rights
In the 1990s, the international community initiated a series of negotiation to support IPR as the production of counterfeit products had increased and hurt the economy. Finally, on 1 January 1995, along with the WTO Agreement, the TRIPs Agreement entered into force. TRIPs Agreement establishes the standard protection under national law, minimum international standard, mechanism to resolve the disputes between WTO Members and establish certain common procedural basis relating to the protection of intellectual property.
In particular, Indonesia has made her commitments to comply with the overarching international demand by ratifying the Paris Convention for the Protection of Industrial Property dated 20 March 1883 as amended several times with the latest was on 14 July 1967 in Stockholm, and the Convention Establishing the WIPO 1967 through the PD No. 24/1979 has ratified these two conventions. Further, in relation to the TRIPs Agreement, Indonesia officially became a WTO member on 2 November 1994 by ratifying the WTO Agreement through Law No. 7/1994. Under the WTO Agreement, the TRIPs Agreement is one of the mandatory agreements are mentioned under Annexes 1, 2, and 3. Thus, Indonesia has an obligation to comply with the international obligation under the TRIPs Agreement and ensure its compliance.
Object and Purpose of Intellectual Property Rights
The protection of IPR has few considerable practical usages, particularly in the perspective of companies. For instance, since companies are protected as the rightsholder, they are free to pursue economic interest. Moreover, IPR also prevents the violations of the rights of others since it delineates which IP is protected and off-limit. The enforcement of IPR can also lead to increase in competitiveness and innovation in the market.
It is also the aim of IPR to ensure that creators can enjoy the fruits of their labor. In the case of copyrights, for instance, it offers moral and economic benefits as a reward for their labor in creating art and literacy. Without the protection of copyrights, it is difficult for artists alike to enjoy the economic return from their artwork while having to be cautious of who might claim them as their own.
The protection of novel inventions and creations provides an incentive for the market to be more innovative. In the case of patents, the market would be discouraged to invest in research and development without the protection of IPR. This is because any novel creation entering the market would be duplicated by their rivals, and the company would be unable to recoup the initial cost of invention. Through the enforcement of IPR, the competitiveness of the market will be retained without sacrificing the right to recoup profit.
Another example is the role of industrial design protection. It essentially protects the external appearance of a product which distinguishes it from the rest of the market. Industrial arrangement, along with trademark and service mark, allows companies to establish an identity for marketing and commercial purposes.
Intellectual Property Rights under Indonesian Law
Reflecting on Indonesia’s commitment to the TRIPs Agreement, since its ratification in 1994, Indonesia had issued several laws and regulations relating to IPR. Intellectual property law in Indonesia covers 7 (seven) objects: (i) patents through Law No. 13/2016; (ii) marks and geographical indications through Law No. 20/2016; (iii) copyrights through Law No. 28/2014; (iv) trade secrets through Law No. 30/2000; (v) industrial designs through Law No. 31/2000; and (vi) layout of integrated circuit through Law No. 32/2000. In addition to the IPR mentioned in TRIPS Agreements, Indonesia also recognize the protection of the breeding of special variety of plants through Law No. 29/2000 on Protection of Plant Varieties.
The core of IPR lies upon the protection of exclusive rights granted to each rightsholder. These rights may include moral right, a right which is incumbent upon the creators or inventors of their creations throughout their lives, and economic right, the right to enjoy the economic benefits as the fruit of their labor. IPR also recognizes priority right which entails the right for IPR holders registered in another country, which are signatories to either the Paris Convention for the Protection of Industrial Property or the WTO Treaty, to demand the expediting of their intellectual property registration in Indonesia.
As previously mentioned, intellectual property law in Indonesia covers 7 (seven) objects. Further explanation on the said objects is elaborated below.
Patents
In Indonesia, the development of technology in various fields has been so rapid that it is necessary to have stronger protection for inventors and patent holders in order to motivate inventors to generate more inventions in terms of quantity and quality to improve national welfare as well as to create fair business competition. Invention means an idea of an inventor embodied into a specific problem solving activity in the field of technology in the form of product or process, or refining and developing product or process. Upon the result of their invention in the field of technology, an exclusive right is granted by the state to the inventor for a definite period of time to exclusively implement his/her given invention or to give consent to other party, namely patent. Further explanation regarding patents is described below.
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Object of Patent
Patent protection includes:
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patent, which is granted for: (i) a novel invention; (ii) involving inventive steps; and (iii) susceptible to industrial application; and
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simple patent, which is granted for a novel invention, an improvement from existing product or process, has practical uses, and susceptible to industrial application, includes: (i) simple product; (ii) simple process; or (iii) simple method.
In the light of point (1) above, further explanation on the characteristic of patent can be seen in the table below:
Characteristic of Patent
Source: Law No. 13/2016.
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Subject of Patent
The party entitled to patent is: (i) the inventor, which means the person or persons collectively executing an idea in an activity to produce an invention; or (ii) person, which means a natural person or legal entity, who further receives the rights of the relevant inventor. If the invention is produced jointly by several persons, the right of the invention is jointly owned by all relevant inventors, for instance, the child of the patent holder may also jointly own the patent through inheritance. It is worth to note that unless proven otherwise, party deemed to be the inventor is a person or persons firstly declared as the inventor of the application
Furthermore, patent holder means the inventor as the owner of patent, recipient of such right from the owner of patent or a subsequent recipient of patent from the person mentioned above who is registered in the General Register of Patents. The parties who become patent holders on inventions produced by inventors in official and work relations are different, which can be seen in the following table.
The Difference of the Right Holder to a Patent Created in an Official and Work RelationsSource: Law No. 13/2016.
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The Rights and Obligations of the Patent Right Holder
A patent holder has exclusive rights to exploit their patent and prohibit other party(ies) without their approval from:
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making, using, selling, importing, renting out, delivering, or supplying for sale or rental or delivery of the patented product in the event of product-patent;
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in the event that process-patent: uses the patented production process to make products or conducts other activities as referred to in point (1) above.
However, In the event of educational, research, experimental, or analytical purposes, the said prohibition may be exempted as long as it does not prejudice the proper interests of the patent holder and is non-commercial.
Patents that must be implemented in Indonesia, covers:
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the implementation of a product-patent which includes manufacturing, importing, or licensing the patented product;
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the implementation of a process-patent which includes manufacturing, importing, or licensing products generated from the patented process; or
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the implementation of a method-, system- and utilization-patent which includes manufacturing, importing, or licensing products generated from the patented method, system and utilization.
Every patent holder or licensee is required to pay annual fee. Licensee is a party who receive an authorization by the patent holder to carry out the rights on patent which its explanation is elaborated in Section below.
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Filing an Application for the Patent
In order to obtain a right on patent, an application for registered patent shall be submitted by following the procedure below:
The Procedure for the Patent Application
Source: Law No. 13/2016.
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Terms of the Patent Protection
The period granted for patents and simple patents is different, namely:
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A patent is granted for a period of 20 (twenty) years as from the filing date and cannot be extendable. The date of filing and expiry is recorded in the General Register of Patents and published in electronic media and/or non-electronic media.
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A simple patent is granted for a period of 10 (ten) years as from the Filing Date and cannot be extendable. The date of filing and expiry is recorded and published in electronic media and/or non-electronic media.
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Transfer of Patent Rights
Rights on a patent may transfer or be transferred in whole or in part due to: (i) inheritance; (ii) donation; (iii) testament; (iv) waqf; (v) written agreement; or (vi) other recognized reasons in accordance with the prevailing laws and regulations. As an exclusive right, a Patent may be transferred by the Inventor or by those entitled to the Invention to an individual or to a legal entity. The element of “may transfer or be transferred” is only for economic rights, while moral rights remain intact to the inventor. The transfer of rights over a patent must be carried out before the notary (authentic deed).
The transfer of rights of patent must be supplemented by the original patent documents together with other rights pertaining to the relevant patent. All forms of transfer of rights of patent must be recorded and published subject to fees.
Marks
In the global trade era, marks play essential roles particularly in sustaining fair, equitable business competition, consumer protection, as well as protection for domestic UMKM and domestic industries. Several countries rely on their economic and trade activities on products that are produced based on human intellectual capabilities by using marks. Further explanation regarding marks is described below.
Object of the Protected Mark
Mark means any sign capable of being represented graphically in the form of drawings, logos, names, words, letters, numerals, colors arrangement, in 2 (two) and/or 3 (three) dimensional shape, sounds, holograms, or combination of 2 (two) or more of those elements to distinguish goods and/or services produced by a person or legal entity in trading goods and/or services. Pursuant to Article 2 (2) Law No. 20/2016, marks comprises:
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Trademarks, means any mark used for goods traded collectively by a person or several persons or a legal entity to distinguish other similar goods; and
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Service marks, means any mark used for services traded by a person or several persons collectively or legal entity to distinguish other similar services.
Besides trademarks and service marks, Law No. 20/2016 also recognizes collective marks. Collective mark means any mark used for goods and/or services entailing similar characteristics concerning nature, general characteristic, quality of goods or services as well as supervision that will be traded by several persons or entities to distinguish with other similar goods and/or services.
A right on mark, the exclusive right granted by the state to a registered mark owner for a definite period to use their mark or authorize others to do otherwise, is obtained after the mark is registered. One of the important things to note in registering mark to be able being protected by law is the element of distinctive. This is because the main function of a mark is so that consumers can characterize a product (both goods and services) owned by the company so that it can be distinguished from other similar or identical products of other companies owned by its competitors. Signs are deemed to have no distinctiveness if they are too simple, such as a line or a period, or are too complex so that they are not clear.
Subject of Mark
Mark owner is a party who has right on registered mark granted by the state to use their own mark for a definite period. Moreover, other parties may also use the registered mark in the event that they are authorized by the mark owner.
Filing an Application for the Mark
It is worth to note that a mark cannot be registered, or its application is rejected in the event that such mark falls under certain conditions, which is elaborated on the table below.
Non-registrable and Rejected Marks
Source: Law No. 20/2016.
Furthermore, the procedure for the mark application can be seen in the following graph:
The Procedure for Mark Application
Source: Law No. 20/2016.
Terms of the Mark Protection
A registered mark shall receive legal protection for a period of 10 (ten) years from the filing date and may be extended for the same period. The extension application shall be submitted electronically or non-electronically in Indonesian by the mark owner or their proxy within a period of 6 (six) months prior to the expiration of the protection period for the registered mark and shall be imposed on a fee. However, the extension application may still be submitted within a maximum period of 6 (six) months after the expiration of the protection period for the registered mark with the imposition of a fee and a fine in the amount of the extension fee.
Transfer of Mark Rights
Registered mark rights may be transferred or transferred due to: (i) inheritance; (ii) testament; (iii) waqf; (iv) grant; (v) agreement; or (vi) other reasons which are justified by laws and regulations. The transfer of registered mark rights by the mark owner who owns more than one registered marks which has similarity in its essence or in its entirety to similar goods and/or services may only be undertaken if all of the registered marks are transferred to the same party. The transfer of registered mark rights shall be applied for the recordation to the MoLHR. The transfer of registered mark rights that has been recorded shall be announced in the Official Gazette of Marks.
Geographical Indications
Aside of marks, geographical indications also play essential roles in the global trade era particularly in sustaining fair, equitable business competition, consumer protection, as well as protection for domestic UMKM and domestic industries. Geographical indications are national potentials that may become superior commodities, both in domestic and international trade. Further explanation regarding geographical indications is described below.
Object of the Protected Geographical Indications
Geographical indication is any indication which identifies goods and/or a product as originating from a particular region of which its geographical environment factors including nature, labor, or combination of both factors are attributable to a given reputation, quality, and characteristics of the produced goods and/or product. Geographical indication is protected upon being registered by the MoLHR. Upon such geographical indication, an exclusive right granted by the state to the registered geographical indication owner, provided that its reputation, quality and characteristics of which serve as the ground for granting protection of geographical indications subsist.
Subject of Geographical Indications
As previously mentioned, right on geographical indication is granted to the registered geographical indication owner. Before obtaining such right, the geographical indication owner shall file an application to the MoLHR first. The geographical indication owner as the applicant comprises:
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any entity representing a society in certain geographical area producing goods and/or products which constitute: (i) natural resources; (ii) handicraft; or (iii) industrial products;
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provincial government or regency/municipal government.
Moreover, Law No. 20/2016 also recognizes geographical indication users. Geographical indication users are any party having authorization from owner of the right on registered geographical indications to process and/or market goods and/or products of geographical indications.
Filing an Application for the Geographical Indication
It is worth to note that geographical indications cannot be registered or its application is rejected in the event that such mark falls under certain conditions, which is elaborated on below.
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Non-registerable Geographical Indication
A geographical indication cannot be registered if it:
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contradicts to the state ideology, laws and regulations, morality, religion, decency, or public order;
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misleads or deceives the public concerning reputation, quality, characteristics, source of origin, manufacturing process, and/or its usage; and
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constitutes a name that has been used in plant variety and used for similar plant variety, unless any additional term to indicate factors of similar geographical indication.
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Rejected Geographical Indication
An application is rejected if the geographical indication is substantively similar to or identical with:
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the document describing geographical indications is not verified; and/or
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it has substantial similarity with a registered geographical indication.
Furthermore, the procedure for the geographical indication application can be seen in the following graph:
The Procedure for the Geographical Indication Application
Source: Law No. 20/2016.
Terms of the Geographical Indication Protection
Geographical Indications are protected as long as their reputation, quality, and characteristics serving the grounds for granting protection of geographical indications to certain goods remain exist.
Industrial Design
To advance an industry which is competitive both in the national and international trade, it is necessary to create a conducive climate for the creations and innovations of the people in the field of industrial designs as a part of an intellectual property rights system. An industrial design is a creation on the shape, configuration, or the composition of lines or colors, or lines and colors, or the combination thereof in a two or three dimensional form which gives an aesthetic impression and can be realized in a two or three dimensional pattern and used to produce a product, goods or an industrial commodity and a handy craft. Further explanation regarding industrial designs is described below.
Object of the Protected Industrial Design
The right to an industrial design shall be granted for an industrial design that is new. Such right to an industrial design shall be granted for an industrial design that is new. An industrial design shall be deemed new if on the filing date, which is the date of receipt of an application that has fulfilled administrative requirements, the said Industrial Design is not the same as any previous disclosures. The previous disclosure shall be one which before: (i) the filing date; or (ii) the priority date, if the application is filed with priority right has been announced or used in Indonesia or outside Indonesia.
In addition, an industrial design shall not be deemed to have been announced if within the period of 6 (six) months at the latest before the filing date, such an industrial design: (i) has been displayed in a national or international exhibition in Indonesia or overseas that is official or deemed to be official; or (ii) has been used in Indonesia by the designer in an experiment for the purposes of education, research or development. The right to an industrial design shall not be granted if an industrial design is contrary to the prevailing laws and regulation, public order, religion, or morals.
Subject of Industrial Design
Those entitled to receive the right to an industrial design shall be (i) the designer, who is a person or several persons who produce an industrial design; or (ii) those who receive the right from the designer. In the event that the designer comprises several persons jointly, the right to an industrial design shall be granted to them jointly, unless agreed otherwise.
Furthermore, the right holder to an industrial design created in an official and work relations are different, which can be seen in the following:
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Industrial Design Made in an Official Relation
Official relation is an employment relation between civil servants and their agencies.
In the event that an industrial design is created by another party on the basis of an order carried out in an official relation, the right holder to an industrial design shall be the party for whom the industrial design is created, unless there is another agreement between both parties without detracting from the right of the designer if the use of the industrial design is expanded beyond the official relation.
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Industrial Design Made in a Work Relation
Work relation is a working relation in the private sector, or a relation due to an order for Industrial design by a private institution, or an individual relation with a designer.
In the event that an industrial design is created under a work relation or on the basis of an order, the party that has created the industrial design shall be deemed as the designer and the right holder to an industrial design, unless otherwise agreed by both parties.
Additionally, this shall not nullify the right of the designer to have their name mentioned to the certificate of industrial design, in the General Register of Industrial Designs and in the Official Gazette of Industrial Designs. Mentioning the designer’s name in the General Register of Industrial Designs and in the Official Gazette of Industrial Designs is a common thing in the field of Intellectual Property Rights, known as moral right.
The Rights of the Industrial Design Right Holder
Moreover, the right holder to an industrial design shall have the exclusive right to exploit his industrial design and to prohibit others who without his consent make, use, sell, import, export and/or distribute the products that have been granted the right to the industrial design, except that the use of the industrial design is for the purposes of experimentation and education, provided that such use does not damage the normal interest of the right holder to an industrial design.
Filing an Application for the Industrial Design
The right to an industrial design shall be granted on the basis of an application for registration of an industrial design that is filed at the DGIPR. However, the right to an industrial design shall not be granted if an industrial design is contrary to the prevailing laws and regulation, public order, religion, or morals. Furthermore, the procedure for the industrial design application can be seen in the following chart:
The Procedure for the Industrial Design Application
Source: Law No. 31/2000.
It is worth to note that if there are more than 1 (one) applicant files an application jointly, such application shall be signed by one of them by attaching a written agreement from the other applicants.
Terms of the Industrial Design Protection
The protection of the right to an industrial design shall be granted for 10 (ten) years commencing from the filing date. The date of commencement of the protection period shall be recorded in the General Register of Industrial Designs and announced in the Official Gazette of Industrial Designs.
Transfer of Industrial Design Rights
The right to an industrial design may be transferred by: (i) inheritance; (ii) donation; (iii) testament; (iv) written agreement; or (v) other reasons recognized by the law, for instance the court decision on bankruptcy. The said transfer of right to industrial design shall be accompanied with the document regarding the transfer. All forms of transfer of a right to an industrial design shall be recorded in the General Register of Industrial Designs at the DGIPR with the payment of a fee as prescribed in Law No. 31/2000 and announced in the Official Gazette of Industrial Designs.
Copyrights
Object of the Protected Copyrights
Compared to other intellectual property rights, copyrights have the most diverse and extensive modes of protection. Copyrights are afforded to various lines of creations, which includes works in the areas of science, art, and literature which were produced with the inspiration, ability, thought, imagination, dexterity, expertise, and were expressed in a tangible form.
There are 11 (eleven) broad categories of creations that are protected by law, which can be seen in the graph below:
Objects of Copyrights
Source: Law No. 28/2014.
On the other hand, the creations which are not protected by copyrights includes: (i) a creation which has not been made tangible; (ii) every idea, procedure, system, method, concept, principle, finding or data even if it’s been disclosed, declared, illustrated, elaborated, or incorporated with a creation; and (iv) tool, thing, or product created for the sole purpose of solving a technical problem or the shape is made for functional purpose.
Lastly, there is no copyrights at all for: (i) the result of an open meeting of a state institution; (ii) laws and regulations; (iii) a formal state speech; (iv) court judgement or decision; (v) holy scripture or religious symbol.
Subject of the Protected Copyrights
Under copyrights law, the holder of copyrights is the creator of any form of works recognized by copyrights law. The creator is defined as someone who, unless proven otherwise, is mentioned in the creation; declared as the creator of a creation; mentioned in the records of creations; recorded in the creations general gazette as the creator.
Furthermore, in case where a creation was created by 2 (two) persons or more, the creator is the person who leads and oversees the completion of the creation. However, if that role was not filled with anyone, without diminishing the rights of the rest to the creation, the person who gathered the creation shall be considered as the creator. In case where the creation was designed and realized by persons under the leadership and oversight of a designer, the designer shall be deemed as the creator.
Unless there is an agreement that arranges otherwise, in case of a co-creation with the government, the government institution shall be credited as the creator. In that arrangement, if the creation is used commercially, the co-creator will be entitled to rewards in the form of royalty. However, if the creation was produced as a result of a work relation or by order, unless agreed otherwise, the creator is the person who produced the creation.
In case a legal entity announces, distributes, or communicates a creation which comes from the legal entity, without mentioning a name as the creator, the legal entity shall be deemed as the creator.
Furthermore, in case of expression of traditional culture, the copyrights rests with the State, which has the obligation to guard and keep that expression of traditional culture. The use of traditional culture shall heed to the living values of the society that holds it.
The state shall also hold the copyrights of a creation with an unknown creator, for the interest of the creator. If the creation was announced, but the creator is still unknown, and the only known name is their alias, the announcer of the creation shall hold the copyrights for the interest of the creator. In case of a published creation, but the creator and the announcer is unknown, the copyrights rests with the state for the interest of the creator. However, if the creator can prove their ownership of the creator, the copyrights will be duly returned to them.
Aside from the creator’s, other related parties are also entitled to copyrights. These parties include: (i) show performers; (ii) phonogram producers; (iii) broadcasting institution.
The Rights of Copyrights Holder
The rights incumbent upon copyrights holders are two-fold: moral right and economic right. The moral right to a creation shall include the rights to: (i) include or not include their name in the copy of the creation in its public use; (ii) use their alias name; (iii) change their creation in accordance with the standards of public decency; (iv) change the title or subtitle of the creation; (v) to defend their rights in case of distortion, mutilation, modification of their creation, or an event which violates their dignity or reputation.
Moral rights are not transferable, unless by will or inheritance in accordance with the prevailing laws and regulations. This arrangement, however, can be rejected or released by the recipient through written statement.
As to economic rights, it includes the rights to gain economic benefits from the creations, which could come from: (i) publishing; (ii) duplication in any form; (iii) translation; (iv) adaptation, arrangement; or transformation; (v) distribution of the original and copies; (vi) showcase; (vii) announcement; (viii) communication; and (ix) rent. Any party who wishes to do any of the protected economic activities above shall obtain a license from the creator or the copyrights holder, without which any commercialized duplication and usage shall be prohibited.
Terms of Copyrights
The time limit of copyrights is distinguished according to the two types of rights. For moral rights to use their name or their alias, and to defend their rights, shall not have an expiry date. However, the right to change the creation or the title thereof shall only be allowed so long as the copyrights belongs to the creator.
On the other hand, the terms of economic right to a creation requires a lot more elaboration than moral rights. For creations in the forms of: (i) books, pamphlets, and all other forms of papers; (ii) lecture, speech, and other similar creations; (iii) educational props; (iv) song or music with or without text; (v) drama or musical drama, dance, choreography, puppetry, and pantomime; (vi) physical arts in forms of painting, drawing, carving, calligraphy, sculpture, statue, collage, and applied art; (vii) Architecture; (viii) Map; (ix) batik; the copyrights shall remain with the holder their whole life and 70 (seventy) years after their death starting from the first day of the following year. In case there were more than one creator, the post-mortem right is activated after the last creator died. If the creator were a legal entity instead of a natural person, the right shall remain with the legal entity for 50 (fifty) years after the first announcement.
For creations in the form of: (i) photography; (ii) translations, interpretations, alterations, anthologies, and other transliteration works; (iii) cinematography; (iv) video game; (v) computer program; (vi) layout of published paper; (vii) translation, adaptation, arrangement, transformation, or modification of traditional culture expression; (viii) compilation of creations or data, whether in computerized format or other media; and (ix) compilation of traditional culture expression so long as it is still the original creation, shall remain with the creator for 50 (fifty) years since the first announcement. For applied art, the term shall extend for 25 (twenty-five) years since the first announcement.
For rights to traditional culture expression which are hold by the State shall have no expiry date. For rights to creations which have been published but the creators were unknown, and the rights were subsequently held by the state, shall remain with the State for 50 (fifty) years after the first announcement. In the same case, but for rights held by the announcer, shall remain with them for 50 (fifty) years after the first announcement.
Filing an Application for Copyrights
The procedure for the copyright application can be seen in the following chart:
Filling an Application for Copyrights
Source: Law No. 28/2014.
Transfer of Copyrights
Even though copyrights are an intangible matter, it is still possible to transfer the right, whether partially or completely. The transfer is done through: (i) inheritance; (ii) grant; (iii) waqf; (iv) will; (v) written agreement; (vi) other causes stipulated by law. Moreover, so long as the transfer does not completely remove the copyrights from the creator or right holder, they shall retain the copyrights. Secondary transfer of an already transferred right is also not allowed. In case of a transfer of ownership through trade of books, songs, and all variations of both, the copyrights shall return to the creator 25 (twenty-five) years after the transaction.
The inheritor of a late creator shall obtain the copyrights in case the creation has not been, has been, or was not announced, distributed, or communicated after the death of the creator. Furthermore, it is allowed to use a copyright as a fiduciary guarantee, which must be subjected to the laws and regulations concerning fiduciary agreement.
Trade Secrets
Trade secret is an IPR that protects confidential information in the field of technology and business. The regulation on trade secret was formulated to accommodate and create a conducive climate for the creations in the rapid competitive nature in national and international trade. The main objective of the trade secret is to prevent any business espionage and any former employees disclosing confidential information of the business, which would create any kind of commercial disadvantage
Object Protected under the Trade Secret
The scope protection of trade secret arranging from production, processing, sale, or other confidential information. Under Law No. 30/2000, to qualify as a trade secret, it must contain three elements: (i) the information is confidential because it can only be identified by certain parties and cannot be identified by the public; (ii) has economic value because it is useful for commercial business activities and can economically increase profit; and (iii) the confidentiality is maintained because the owner of the trade secret taken proper and reasonable steps to ensure its secrecy.
Rights of the Trade Secret Holder
The trade secret owner has the right to use the trade secret and to grant licenses to any third party for commercial gain or to prohibit any third party from using the trade secret. If there is someone who deliberately discloses the trade secret or breaks the agreement, or the obligation, either written or not, to maintain the confidentiality of the relevant trade secret will be constituted as the infringement of trade secret.
Filing an Application for Trade Secret
As the nature of trade secret is very confidential, many countries do not require the trade secret to be registered but still protected against unfair competition. Similar to the common practice, Indonesia does not require the trade secret to be registered to maintain the secrecy of the rights.
Transfer of Trade Secret
Trade secret may be transferred to a third party by (i) inheritance; (ii) donation; (iii) testament; (iv) written agreement; or (v) other reasons by the law. To transfer the rights, the transfer must be stated in the documents agreed by the owner and must be recorded by the DGIPR with the payment of the fee that can be accessed in DGIPR. Further, the transfer will be announced in the Official Gazette of Trade Secret and considered legally enforced to the third party.
Layout Design of Integrated Circuits
The IPR on LDIC aims to protect the inventor’s rights and encourage technology development. In practice, the IPR of LDIC is protected under copyrights or special law. In Indonesia, the rights of LDIC mean an exclusive right granted to the designer for the creation within a certain period to use it.
Object Protected under the LDIC
To understand the object that is protected in LDIC, it is essential to first understand what the layout design and the integrated circuit is. The integrated circuit is a finished or half-finished product containing various elements with at least one active element that is partly or entirely interconnected and integrated into a semiconductor to produce electronic function. While the layout design is defined as three-dimensional creation formed by many elements that consist of at least one active part: the interconnection in an integrated circuit and the process of making the integrated circuit.
The right to LDIC can only be granted to the LDIC that is considered original. In order to prove the originality, such design must be created by the designer independently and the LDIC has not been common/known amongst the designers. And for the LDIC to be protected, it must be in line with the prevailing laws and regulations, public order, religion, and morality.
Subject of LDIC
The main beneficiary of the protection is the creators of the layout, whether individually or collectively, unless agreed otherwise. Where the layout was created in an official relationship, the holder of the right shall be the party for whom the Layout was made for, unless agreed otherwise. This arrangement does not remove the right of the designer to have their name credited in the certificate, the general record, or the official gazette for LDIC. In a commercial or occupational relationship, the designer and creator of the Layout shall hold the right thereof, unless agreed otherwise.
The Rights of the LDIC Holder
The beneficiary of the right shall have exclusive right to execute the layout and to prohibit other parties, without their express consent, to create, use, sell, import and export, and/or distribute goods containing, partially or entirely, the layout which has been protected. Exception to this prohibition, however, is granted to the use of layout for research and educational purposes so long as it does not unfairly harm the interest of the right holder.
Terms of the LDIC
The protection shall be granted to the right holder at the first moment of commercial use or since the date of receival in the registration process, which extends for 10 (ten) years. The dates of these events must be registered in the general record and published in the Official Gazette of LDIC. As a note, once it has been commercially used, the Layout must be registered within two years since that date.
Filling an Application for LDIC
For the LDIC rights to be recognized, it has to submit the application to DGIPR, with the following procedure as follow:
Filling an Application for LDIC
Source: Law No. 32/2000.
Transfer of LDIC
LDIC rights may be transferred to a third party by (i) inheritance; (ii) donation; (iii) testament; (iv) written agreement; or (v) other reasons by the law. The transfer of right itself must be stated in the documents agreed by the owner of the LDIC and must be recorded by DGIPR along with the payment required. Further, the transfer will be announced in the Official Gazette and considered legally enforced to the third party.
Plant Varieties
Considering the biodiversity of Indonesia, and to stimulate competition and economic progress in the agricultural sector through the cultivation of varieties which have a high yield possibility, the PVP was introduced. Despite not being included in TRIPs Agreement, PVP is still recognized by Indonesia as an intellectual property to protect the breeders’ economic rights as a reward for their intellectual undertaking.
Object Protected under the Plant Varieties
The PVP is afforded to plant varieties which are: (i) new; (ii) distinct; (iii) uniformed; (iv) stable; and (v) given a denomination. The novelty of a variety depends on whether at the moment of PVP application approval, the propagation material or the harvested products have not been traded in Indonesia, or only have been traded for less than a year or have been traded overseas for less than 4 (four) years for seasonal plants and 6 (six) years for annual plants.
The distinct characteristic of a variety depends on the distinguishable features of the variety compared to other plants at the time of approval. A variety is deemed uniformed when its main or principal features are proven uniformed, although varied, as a result of change in planting method and environment. The stability of a variety depends on the consistency of the main features of the variety after repeated cultivation or multiplication in large quantities.
Lastly, a variety must be given a denomination under these conditions: (i) the given name can still be used following the expiry date of the protection; (ii) the given name should not cause confusion about the characteristics of the variety, which could be rejected by PVP Officer if it does not satisfy this condition; (iii) the denomination should be registered by the PVP Holder to the PVP Office; (iv) the denomination has not been used by other varieties; and (v) the denomination may be registered as a trademark in accordance to the prevailing laws.
The Subject of Plant Varieties
The holder of PVP shall be the breeder, or any person or legal entity who receive further rights. In case of a variety produced under an occupational contract, unless agreed otherwise, the employer shall retain the ownership of the right so long as the rights of the breeder are not compromised. In case of a commissioned work, the party who commissioned the breeding shall retain the ownership of the right so long as the rights of the breeder are not compromised. Nonetheless, the breeder is entitled to a fair compensation in consideration of the economic benefit that may be gained by the commercialization of the variety.
PVP also extends not only to the principal variety, but also: (i) essentially derived variety that originates from a protected variety; (ii) a variety that cannot be clearly distinguished from a protected variety; and (iii) a variety that is produced by repeatedly using a protected variety.
Rights of the Plant Varieties Holder
A PVP holder shall have the exclusive right to use and execute the rights contained thereof, and to give permission to any party or legal entity to use the varieties in the form of seeds and harvested products for the purpose of propagation. The rights may include: (i) production and multiplication of seeds; (ii) preparation for propagation purposes; (iii) advertisement; (iv) offering; (v) selling or trading; (vi) exporting; (vii) importing; and (viii) any preparation of the activities mentioned in the previous points.
Terms of PVP
The PVP right shall protect the variety for 20 (twenty) years for seasonal plants and 25 (twenty-five) years for annual plants, which are only enforceable after the official PVP has been issued. However, a temporary protection shall be granted during the application process.
Transfer of Plant Varieties
PVP rights may be transferred to a third party by (i) inheritance; (ii) donation; (iii) testament (iv) written agreement; or (v) other reasons by the law. The transfer of right itself must be stated in the documents agreed by the owner of the PVP and must be recorded by PVP Office along with the payment required. Further, the transfer will be announced in the Official Gazette and considered legally enforced to the third party.
Licensing Agreement of Intellectual Property Rights
The development of IPR is manifested in the need for legal protection which is based on the recognition of IPR and the right to exploit commercialization or to enjoy the object of intellectual property itself for a certain period. Nevertheless, in the event that anyone beside the intellectual property holder intends to enjoy or exploit the said intellectual property, they must obtain an authorization from the intellectual property holder. Therefore, the protection and recognition of IPR are only given exclusively to the intellectual property holder. Based on the description above, one way that business actors can develop their business through the commercialization of intellectual property rights is by granting a license based on a license agreement.
License means any permit granted by the intellectual property holder, either exclusively or non-exclusively, to licensee based on a written agreement to exploit a protected intellectual property for a certain period and certain requirements. The said definition can be found in the laws of IPR: (i) Law No. 13/2016; (ii) Law No. 20/2016; (iii) Law No. 28/2014; (iv) Law No. 30/2000; (v) Law No. 31/2000; (vi) Law No. 32/2000; and (vii) Law No. 29/2000.
According to the laws of IPR, the right holder to an intellectual property right shall have the right to grant a license to any other party on the basis of a licensing agreement in order to perform all acts in accordance with the rights given in respective intellectual property right, unless agreed otherwise. Moreover, even though the right holder to an intellectual property right has granted the right to grant a license to any other party, they may still personally exploit the industrial design or give a license to a third party to exploit the intellectual property right, unless agreed otherwise.
The licensing agreement must be recorded in the general register of respective intellectual property right at the DGIPR with the payment of fee and announced in the official gazette of respective intellectual property right. In addition, a licensing agreement shall not contain any provisions that may damage the Indonesian economy or any provisions that can create unfair competition, as regulated in the prevailing laws and regulations. Nonetheless, toward the recordation of licensing agreement in the sector of plant variety shall be conducted at the PVP office.
Financing and Development of Intellectual Property-Based Marketing System
As a form of support for the development of creative economy, Law No. 25/2019 was enacted to regulate intellectual property-based financing schemes. Based on Article 16 of Law No. 25/2019, the government facilitates intellectual property-based financing schemes for creative economy actors and to facilitate the development of marketing systems for intellectual property-based Creative Economy products.
As the implementing regulation, Article 1 (3) of GR No. 24/2022 defines ‘financing’ as the funding that is based on an agreement or a loan and credit agreement between banking financial institutions or non-banking financial institutions and other parties which requires the financed party to return the funds or bills after a certain period of time by providing compensation in the form of interest or profit sharing. Intellectual property-based financing schemes is a financing scheme that utilizes intellectual property as an object of debt collateral for banking financial institutions or non-banking financial institutions in order to provide financing for creative economic actors.
Based on Article 4 (1) of GR No. 24/2022, the government will facilitate intellectual property-based financing schemes through bank financial institutions and non-bank financial institutions for creative economy actors. Such facilitation is carried out through (i) the utilization of intellectual property with economic value; and (ii) intellectual property valuation. Facilitation in this sense is conveyed in the form of (i) facilitation in the process of applying for recording or registration of intellectual property in accordance with the provisions of laws and regulations in the field of intellectual property; and (ii) optimization of the utilization of intellectual property as an object of debt collateral.
The request for intellectual property-based financing is to be submitted by creative economy actors to bank financial institutions or non-bank financial institutions. The requirements for applying of such consists of at least (i) a financing proposal; (ii) owning a creative economy business; (iii) an existing agreement relating to the intellectual property of creative economy products; and (iv) owning a registration letter or intellectual property certificate.
Banking financial institutions or non-banking financial institutions must conduct the following in providing intellectual property-based financing: (i) verification of creative economic businesses; (ii) verification of recording letters or certificates of intellectual property used as collateral that can be executed in the event of a dispute or non-dispute; (iii) valuation of intellectual property used as collateral; (iv) disbursement of funds to creative economic actors; and (v) receipt of return of financing from creative economic actors according to the agreement.
In the implementation of intellectual property-based financing schemes, banking financial institutions and non-banking financial institutions use intellectual property as an object of debt collateral. In this case, the object of debt collateral above is implemented in the form of (i) fiduciary guarantees of intellectual property; (ii) contracts in creative economic activities; and/or claims in creative economic activities. Additionally, the Intellectual property that can be used as an object of debt collateral are intellectual property in the form of (i) intellectual property that has been recorded or registered at the ministry that administrate government affairs in the field of law; and (ii) intellectual property that has been managed either independently and/or transferred its rights to other parties.
The government may develop alternative sources of financing outside the mechanism of financing institutions which include (i) information technology-based joint funding services; and/or (ii) securities offerings through information technology-based crowdfunding services. However, a license from OJK must be obtained prior the usage of information technology-based joint funding services and securities offerings through information technology-based crowdfunding services.
Should financing dispute occurs, dispute resolution can be carried out through litigation or non-litigation method. Furthermore, non-litigation dispute resolution in banking financial institutions and non-bank financial institutions is carried out by an alternative dispute resolution institution with a prior approval from the OJK. Such provision is subject to POJK No. 61/2020 related to alternative dispute resolution institutions in the financial services sector. Furthermore, non-litigation dispute resolution that does not involve banking financial institutions and non-bank financial institutions can be resolved through other dispute resolution institutions.
In addition to financing, the provisions of GR No. 24/2022 also regulate the marketing system of intellectual property-based creative economy products, in which defined as a marketing system that prioritizes the utilization of intellectual property. The Government and/or Regional Governments facilitate the development of marketing systems for intellectual property-based creative economy products through (i) licensing; (ii) franchising; (iii) technology transfer; (iv) joint branding; (v) transfer of rights; and/or (vi) other forms of partnership. In the event that the intellectual property is used commercially, the owner and/or right holder shall receive compensation in the form of royalties or other forms in accordance with the provisions of laws and regulations in the field of intellectual property.
The facilitation provided by the Government and/or Regional Governments, which can also be jointly provided with other parties, in development of marketing systems for creative economic products based on intellectual property could be provided in the form of (i) technical guidance; (ii) business licensing services and/or integrated registration electronically; (iii) access and/or assistance to financing; (iv) business information/consultation services; (v) marketing promotion assistance; (vi) provision of digital collective management systems; (vii) access to marketing; (viii) marketing incubation through designated institutions; (ix) assistance in calculating intellectual property valuations; and/or (x) legal assistance and assistance services.
