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On November 2, 2020, the Omnibus Law on Job Creation through Law No. 11 of 2020 (Job Creation Law) was passed and became effective immediately.  Chapter VI on the Ease of doing Business, Article 107 of the Job Creation Law amends certain provisions of the Patent Law No. 13 of 2016 (Patent Law).  The main amendments to the Patent Law are directed to: (i) the working requirements; (ii) compulsory licensing; and (iii) simple patents.

Working Requirements

Up until the passage of the Job Creation Law, under Article 20 of the Patent Law, patent holders were required to manufacture a patented product or use a patented process or method in Indonesia within three years from the date of grant or face the possibility of a compulsory license and/or cancellation of a patent.  Now, amended Article 20 provides several ways in which a patent can be worked in Indonesia.  These include:

  1. Product patents: Making, importing or licensing a patented product
  2. Process patents:  Making, licensing, or importing products resulting from a patented process
  3. Method patents: Making, importing or licensing products resulting from the patented method, system and use.

Note:  According to Article 19 of the Patent Law, a “product” patent includes an apparatus, a machine, a composition, a formula, a product produced by a process, a system, etc.  A “process” patent includes a process, a method, or a use.  Although “method” patents were originally included in the definition of “process” patents, “method” patents have now been grouped separately according to the Job Creation Law and are intended to cover a method, a system, and a use.  We expected the Indonesian Government will soon draft and pass a regulation to clarify the definition of “method” to provide a clear understanding of the differences between a “process” and a “method”.

Additionally, patent holders will be able to submit a written request to postpone fulfilment of the working requirement. If approved, compliance with the working requirement may be postponed for a maximum of five years.  It may be possible for patent owners to obtain further postponement beyond the maximum five-year period citing valid reason(s) for the delay.  A request for postponement must be filed within three years from grant of the patent.  Article 45 provide transitional provisions for requesting such postponement. Specifically, any pending request for postponement filed before October 31, 2019 but for which no decision has yet been issued, will be processed according to the previous regulation (Regulation No. 15/2018).  For patents granted under the previous regulation but before the new regulation (Regulation 30) became effective and require a postponement for working, patent holders must file a request for postponement within three years from October 31, 2019, namely, by October 30, 2022.

Compulsory License

Article 82 of the Patent Law has been amended to be consistent with the amendments to Article 20.  Specifically, if an invention is not worked, a third party can file an application for a compulsory license thirty-six months after the date of grant.  Prior to this amendment, a third party could file an application for a compulsory license if the patent owner did not manufacture the product or use a process or method covered by the patent within thirty-six months after grant. As a result of this amendment, patent holders can avoid compulsory licensing by importing a product or licensing a product, process or method.

Simple Patents

In many jurisdictions, simple patents are commonly known as a utility model, petty patent or innovation patents.  Due to an increase in the number of simple patent applications being filed in Indonesia, the Patent Office sought to clarify the scope and distinguish simple patents from patents.  Previously, a simple patent could be granted for a new invention or development of an existing product, process or method that was industrially applicable.  As a result of the Job Creation Law, Article 3 of the Patent Law has been amended to recite that a simple patent can be granted for any invention which is a novel development from an existing product or process having practical uses that can be applied in industry and is “a simple product, a simple process, or a simple method”.  Currently, it is unclear how this additional further definition will affect prosecution of simple patents.

Additional amendments have also been made to accelerate the examination of simple patents.  As a result of these amendments:

  1. A request for substantive examination must be submitted simultaneously at the time of filing of a simple patent.
  2. A simple patent will be published within 14 days of filing. Once published, the application will proceed to substantive examination.
  3. Any opposition during the 14-day publication period will not be considered during substantive examination (suggesting that an opposition will constitute a separate proceeding so as not to delay the start of substantive examination).
  4. A decision to approve or reject a simple patent application is shortened from 12 months to 6 months from the filing date of the application.

Please continue to watch BRICS & Beyond for updates on Indonesia’s patent law.

This post was written by Lisa Mueller and Indah Handayani from Tilleke & Gibbins.

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