In the past few years, Indonesia has made some progress in strengthening its IP protection regime by passing new laws and regulations. While, trade mark piracy and copyright and design infringement remain major issues for IP owners, the improving legal environment offers a good opportunity for foreign IP owners with IP rights disputes in Indonesia to re-visit these issues.
Solid legal framework
Indonesia has a comprehensive legal framework, which has significantly improved over the course of the last decade. The Government regularly reviews the Trademark, Copyright, Industrial Designs and Patents Laws offering the legal profession and the Indonesian Intellectual Property Society, among others, the opportunity to comment and propose amendments. The most recent review was started in 2007.
There are several notable limitations in the Trademark Law, which have all been the subject of review by the Indonesian Government recently. Most notably, the Trademark Law does not prohibit the use of well-known (but unregistered) trademarks. At present, a trademark cannot be enforced in Indonesia unless it is registered in Indonesia.
In addition, rights holders are restricted in their ability to prevent others from registering well-known marks for dissimilar goods/services. Although the Trademarks Law prohibits the registration of well-known marks for dissimilar goods and services, the implementing government regulation remains outstanding.
Other limitations include the inability to record trademark licensee interests against a registration (even though this is required under the Law itself) and, until recently, the absence of protection for geographic indicators.
Despite these limitations, the number of trademark applications filed in Indonesia continues to rise, from approximately 38,000 in 2001 to over 54,000 in 2006.
This has caused significant delays in the prosecution of trade marks at the Trademarks Office. The registration process can take as long as three years. The Trademarks Office has begun the process of computerizing its systems, including the launch of the Intellectual Property Digital Library, but a fully digitalized system is still a long way off.
Indonesia still faces persistent problems with the piracy of well-known marks. Intel was recently defeated in the Supreme Court by a local electronics manufacturer using its house mark. In applying the deletion for non-use provisions of the Trademark Law, the Commercial Court and, on appeal, Supreme Court held that, to succeed, Intel must prove the date the defendant ceased using the mark, even though all evidence indicated that the defendant had never used the mark. This sets a dangerous precedent for owners of well-known marks and the decision is under appeal.
In terms of enforcing IP rights, the Indonesian Police continue to focus the bulk of their efforts on copyright infringers, particularly in terms of optical disc piracy. In 2007, the Police made a large number of high profile raids. This has in part helped Indonesia in it’s removal from the United States Trade Representative’s Priority Watch List.
Even so, copyright piracy remains high. Despite numerous Police raids, the Courts are yet to convict a software pirate in Indonesia as all cases to date have been settled. This will be an area to watch in the future if Indonesia intends to stay off the Priority Watch List.
Patent litigation remains rare in Indonesia, with very few cases making it to the Commercial Court. 2007 saw Indonesia’s first patent revocation case brought by national carrier, Garuda Indonesia Airlines, in respect of its online ticketing and payment system. Garuda successfully revoked the patent on the grounds that the patent sought to protect a business method (which cannot be protected in Indonesia), lacked novelty and did not contain an inventive step.
Industrial design applications, by local and foreign applicants, continue to increase. Until 2005, there was no substantive examination of design applications, which led to the registration of many designs lacking novelty. This changed in 2005 and now all applications are substantively examined. This has slowed the registration process, which now takes around 18 months.
As with trademarks, there is a growing number of “design pirates”, who register third party designs, thereby obtaining the exclusive right to use the relevant design in Indonesia.
The relatively recent practice of examining design applications will to some extent provide a check against this practice, though ultimately it is the responsibility of the rightful rights holder to watch for and take action against pirates.
IP infringement gives rise to both criminal and civil liability. However, the vast majority of actions tend to be criminal. In terms of trademark infringement, a criminal action is commenced by filing a complaint with the Police.
The Police have made considerable progress, particularly with optical discs. However, the majority of Police action is confined to copyright infringement and the penalties prescribed in the various laws are not significant and do not act to deter infringers.
A significant limitation in the judicial process is the absence of interim relief, particularly interim injunctions. This limits the effectiveness of both criminal and civil proceedings.
2007 saw several high profile raids, including what is believed to be the largest seizure of counterfeit and smuggled drugs. In July, the National Police, with the assistance of the National Agency for Food and Drug Control (BPOM) seized drugs with a market value of 25 billion IDR (US$2.6 million). The raid followed a comprehensive survey of 600 stores. It is estimated that as much as 40% of drugs in Indonesia are counterfeit or distributed without the proper permits.
As a result of the separation of Timor Leste (East Timor) from Indonesia in 1999, Indonesian trade marks no longer have effect there, though the Indonesian Trademark Law of 1992/1997 remains in effect. Timor Leste’s Ministry of Justice has allowed the re-registration of Indonesian trademarks since 2006 and the Central Jakarta Commercial Court continues to hear trademark disputes. Approximately 70 cases have been heard to date.
In 2006 the National IP Taskforce was established by presidential decree to address IP enforcement in Indonesia. The Taskforce is a multi-disciplinary body, comprised of representatives from various Ministries which deal with IP policy and enforcement. These include the Ministry of Law and Human Rights, the National Police, Customs, Attorney General's office and Ministry of Trade. The taskforce has its own budget to further its mandate.
In 2007, the Indonesian government’s refusal and reluctance to share sample of the Avian Flu H5n1 virus helped highlight the concerns of nations who provided samples to the World Health Organization but were not guaranteed the vaccines derived from their samples. Through meeting and cooperation with other countries, it was agreed that a framework for the equitable and appropriate distribution of effective pandemic influenza vaccines that will be applied if a pandemic occurs.
2007 also saw some uncertainty with the the Directorate General of Intellectual Property Rights, with significant changes in personnel, most notably the Director of Trademarks and the Director-General.