The European Business Chamber of Commerce (EuroCham) produces a quarterly magazine covering business related issues in Indonesia “with a distinctly European flavor”.
The publication is distributed to the European business community in Indonesia and to stakeholders such as relevant Indonesian Government officials, International organisations and European embassies. The following is a reproduction of my article on intellectual property rights issues in Indonesia.
The original is available here and here.
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Moving in the right direction
Indonesia has long been regarded as ‘The Wild West’ when it comes to the protection of intellectual property (IP). While trademark piracy and copyright and design infringement remain major concerns, the improving legal environment offers a good opportunity for IP owners to revisit these issues.
What you need to know
Some might be surprised to hear that Indonesia has a comprehensive legal IP framework, which has significantly improved over the last decade. The government regularly reviews trademark, copyright, industrial designs and patent legislation, offering interested parties such as the legal profession and the Indonesian Intellectual Property Society the opportunity to comment and propose amendments. The most recent review began in 2007 and will see new legislation introduced to the House of Representatives in 2009. That said, there are a number of limitations that IP owners should keep in mind:
Registered rights are king
Only registered rights are enforceable. In terms of trademarks and designs, such rights can be enforced only if they are registered in Indonesia.
Well-known marks
The Trademark Law does not prohibit the use of well-known or famous marks - unless they are also registered. In addition, it is difficult to stop others from registering your well-known mark for dissimilar goods or services.
Trademark licences
It is not possible to record record trademark licensee interests against a registration (even though this is required under the law). This creates a dilemma for IP owners: how to ensure that use attributes to a licensee, and avoid the risk of deletion for non-use?
Unfair competition
Indonesia has no specific unfair competition or trade practices law. This means that IP owners must rely on the IP laws to prevent the misuse of IP rights or conduct that would otherwise be considered misleading and deceptive.
Litigation is often the only option
Once a trademark, design or other IP right is registered, that right can only be challenged in the courts. This can make it expensive to delete or cancel a misappropriated or wrongfully registered IP right.
The courts are still relatively inexperienced
Despite the prevalence of infringement, IP litigation is still rare. This means that judges are often deciding a legal issue for the first time.On the fl ip side, this and the fact that the Indonesian judicial system does not apply the principle of judicial precedence, generally means that the law will be applied as written - creating a level of legal certainty. However, it is also means that IP owners need to be familiar with the vagaries of the Indonesian legal system - particularly IP office peculiarities.
Slow but steady progress at the IP office
Under the care of Andy Sommeng, the Director-General of Intellectual Property Rights, the IP office has seen slow but steady progress on a number of key issues, including the process of computerising its systems and the launch of the Intellectual Property Digital Library.
The TMO has started accepting geographical indication (or GI) applications as well as plant variety rights applications. So far only a handful of applications have been received, mostly from Indonesia, but there is considerable interest from the European Union.
Proposed amendments to the IP laws (if approved by government) will see further improvement in the legal environment for IP owners, including broadening the definition of trademarks to some non-traditional marks and an increase in the maximum jail sentences and fines. The Director-General has also proposed a raft of amendments that are specifically designed to speed up the registration process.
Bold steps
The past year has seen the Director of Trademarks take the unprecedented step of exercising its legislative discretion to delete a disputed trademark registration, helping end a long-running dispute between a local electronics manufacturer and Intel over its house-brand.
The courts have also successfully handle an increasing number of complex IP cases, including the first patent revocation case in Indonesia, brought by national carrier Garuda Indonesia Airlines in respect of its online ticketing and payment system.
The number design infringement cases handled by the courts has increased significantly, such as a design revocation case brought by Honda against a local manufacturer with respect to the design of its motor scooter lamp.
Progress with Police
Police raids continue to be difficult, primarily because of the inadequacy of Police budgets. This means that rights holders need to provide the Police with operational assistance, in the form of facilitation payments. While these payments are permissible under Indonesia’s and most foreign anti-corruption laws, carrying out Police raids requires careful planning.
Nevertheless, the Police have made considerable progress over the past , particularly in regard to optical discs and illegal drugs. The police continue to target large DVD factories and raid shopping malls selling pirated DVDs and software. The Police have conducted several high-profile raids, including what is believed to be the largest-ever seizure of illegal drugs. It is estimated that as much as 40 percent of drugs in Indonesia are counterfeit or are distributed without the proper permits.
What’s next?
IP enforcement continues to be the biggest challenge for IP owners in Indonesia. The National IP Taskforce acknowledges the difficulties IP owners face. Solving this will require a co-ordinated effort on behalf of Indonesia’s Police, the Customs Department and the Courts. Until that time, IP owners need to take care when planning their IP strategies for Indonesia.