CASRIP Newsletter - Winter 2006, Volume 13, Issue 1
Intellectual Property Registration in Indonesia: The Problems and Possible Solutions
By Leo Tukan[*]
Indonesia signed “the Trade Related Aspect of Intellectual Property Rights and Counterfeit Goods (TRIP’s)” in 1994. As a result of Indonesia’s acceptance of TRIPS, it became obligated to harmonize its existing intellectual property laws in conformance with the TRIP’s Agreement, and at the same time to establish new intellectual property regulations not then in existence. Twelve years later, Indonesia has had some success in its amendment and establishment of intellectual property laws; however, it still struggles with its intellectual property registration processes as well as the public’s education and acceptance of a more strident intellectual property regime. This article endeavors to illuminate the basis for these weaknesses in the Indonesian system and to propose some solutions.
Until 1997 Indonesia had only three laws related to copyright, trademark and patent. These laws had existed since Indonesia was under Dutch colonial rule. For example, the copyright under Dutch was titled, “Auterswet of 1912.” In 1982 this “Auterswet” was amended by Law Number 6 of 1982. Because it was later deemed to be ineffective, in 1987 it was revised by Law Number 7 of 1987 and later it was revised by Law Number 12 of 1997.
The law related to trademark under Dutch Colonialism was known as the “Reglement Industriele Eigendom of 1912.” The “Reglement” has been adjusted several times. First it was changed by Law Number 21 of 1961 and then by Law Number 19 of 1992. In 1997 it was revised with Law Number 14 of 1997.
The law related to patent, also established under Dutch colonial rule, was called “Octrooiwet of 1910.” Similar to the trademark and copyright laws, this law also has been changed several times. The first change came in 1989 by Law Number 6. The second change came with Law Number 13 of 1997.
Since signing the TRIPs Agreement in 1994, Indonesia had 10 years under the Agreement to harmonize all of its IP laws, including launching new laws for other sectors of IP such as trade secret, industrial design and integrated circuit lay-out. All of these laws were required to be available at least by the end of 2004. By the year 2000, the Indonesian government successfully launched three new laws: Law Number 30 of 2000 for trade secret, Law Numbers 31 and 32 of 2000 for industrial design and integrated circuit lay-Out respectively.
Meanwhile, the three existing laws for copyright, trademark and patent also had to be adjusted to accord with the TRIP’s requirements. The copyright, patent and trademark laws haven revised with the new Laws Number 14 and 15 of 2001 for patent and trademark respectively, while copyright law was revised in 2002 by Law Number 19.
II. IP Registration in Indonesia
The extent of intellectual property protection in Indonesia is closely related with the development of the intellectual property laws and the IP registration system. The change in the registration system from a “First to Use” system to a “First to File” system has strongly influenced and defined the development of IP protection in Indonesia.
Indonesia discovered that by following the “First to Use” system, wherein registration promotes only a declarative right for the right holder, there were many problems occurring in the process of IP protection, especially in connection with business and trade activities. Under this paradigm, the government could not control the availability of the IP itself, whether it was copyright, trademark or patent rights. On the other hand, by utilizing the “First to File” system, registration established constitutive rights, and thus the government could more easily control all of the IP in Indonesia.
Therefore, the function of IP registration is to obtain a specific IP right. Accordingly, the IP right holder would receive the proportional protection under the law when using that IP in business. In this context, the IP right is not a grant or a bonus from the government. To clarify, the right is only obtained by the IP holder by applying to the government for registration. Thus, someone cannot claim an IP right because s/he already uses it; the right is only obtained through the application for registration. This is the real consequence of the change in the IP registration system to a “First to File” system.
Through this registration system, someone can only claim his/her rights when using the IP in his/her business and trade activities after obtaining the granted application in an IP Certificate of Registration. When another infringes an IP right, the IP right holder can claim protection through civil or criminal means.
III. Problems and Solutions
A. The registration system is cumbersome, inconvenient and expensive
Indonesia can learn from Japan’s and the United States’ experiences and practices. In these countries, application for IP registration is completed through a paperless system. This is due to the great support of the development of information technology in these countries and the online systems developed to support the application process for IP registration.
In Indonesia, in contrast, all applications for IP registration must be in paper and the documents can be very complicated. For example, a trademark application must be manually typed with 25 copies. The document must: identity the applicant or the applicant’s attorney; include a power of attorney letter; include a document of incorporation if the application is applied for in the name of a specific entity; and include a declaration letter that the trademark is not an imitation. All these documents must be completed and attached to the application form when it is submitted to the appropriate IP registration institution. If the documents are not completely or properly prepared, the application may be rejected or it may be pending, which takes more time to process.
In Indonesia, an application for IP registration must be submitted to the competent institution for IP registration, which is the Directorate General of Intellectual Property (DGIP), a special directorate under the Department of Laws and Human Rights of the Republic of Indonesia. This institution is the only one and it is located in Jakarta, the central city of Indonesia. Temporarily, its branch offices in all provinces of Indonesia have been empowered only to receive the application, not to review it and to reach a decision. The documents must be sent to Jakarta for IP registration. Accordingly, every legal problem related to the IP application and registration process must be settled in the DGIP office in Jakarta.
This inconvenient situation, the difficulties inherent in preparing the application documents and the paper-based system all greatly impact the low rate of applications for IP registration in Indonesia. Many people still view the IP application and registration system as a confusing and uninviting process. One potential solution to these problems is to follow the Japanese and American systems of a paperless process.
B. High application costs deter applicants
An online registration system could also alleviate some of Indonesians’ additional concerns that the application process as unduly time consuming and expensive. Applicants frequently complain about the time and expense involved in obtaining a certificate of registration, which create additional barriers to IP registration. Many applicants think that they have paid the entire application fee, but then discover additional, unexpected expenses. For example, additional costs arise from transportation and accommodation expenses and fees for an expedited process.
The official payment for registration is not overly expensive, however, because all of the processes related to the application and registration take place in Jakarta, additional costs arise and application becomes more expensive that the first official payment. Official payment for a trademark registration is only Rp.450.000, or equivalent to U.S. $45.00. But, when an applicant completes the process of application, the costs are higher than this amount. Taking into account the official fee for the service, transportation and accommodation expenses, the cost actually totals around Rp.1.500.000 or equivalent to U.S. $150. This total assumes that there are no problems with the registration process. The amount will only increase if the application attracts complaints from other parties.
The best solution for this problem is that before providing documents for an application, the applicant must conduct searches for the IP product. By doing this, they can potentially avoid the problem of paying more costs because they may steer clear of future complications leading to additional expenses. A paperless system could also lower this total by eliminating some travel and accommodation expenses.
C. Indonesian society needs education on the new IP laws
In addition to the aforementioned situation, there are several critical problems related to Indonesian society’s low understanding of intellectual property, whether related to the IP application and registration process or to the meaning and importance of IP itself. This is because the IP laws are relatively new for many people, both educated and uneducated citizens alike. With the exception of copyright, trademark and patent, the IP laws were all formed within the part five years. Even the existing laws have been amended several times, leading to potential confusion.
Because the laws are new, inadequate time has passed for society to adjust; hence most people do not understand IP or its significance in business. Therefore, Indonesia needs more time to introduce the new laws to people so they can better understand the laws and the meaning of IP for businesses.
In my opinion, IP registration under the Indonesian system is extremely important. It is essential to provide legal protection for the IP right holder while conducting his or her business. Registration might also make the product have an increased competitive power in the marketplace. For example, when someone tries to imitate the product, which has been protected by the registration, then he or she can be sued by the IP right holder. The IP right holder can seek protection from the court and the certificate of registration will provide the best evidence of ownership and entitlement. This evidentiary power elevated with Indonesia’s adoption of the “First to File” system.
However, Indonesia still battles against society’s low understanding of IP registration, IP laws and IP rights. This is true of university-educated individuals as well as entrepreneurs. Therefore, the Indonesian government needs to implement a campaign to educate its citizens about IP rights and the registration process. This education should lead to an increase in the rate of IP applications and registration for local people in Indonesia.
However, education alone is not enough. There also needs to be improvements made in the IP registration infrastructure. Improvements in the registration process would include the development of IP technology and movement to a paperless system. These improvements would attract people to apply for IP registration because they would cut the lifetime of the process as well as the costs.
[*] Mr. Tukan is a Lecturer and Person in Charge of IP Center, School of Law, Diponegoro University-Semarang Indonesia. Mr. Tukan was also an attendee of the 2005 CASRIP Summer Institute.