Tag: Indonesia

Important Amendments made to Indonesia’s Patent Law

November 13, 2020

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.

Unpaid Annuity Payments For Abandoned Patents in Indonesia Could Jeopardize Future Filings in Indonesia

November 16, 2018

In August 2016, a new amended patent law took effect in Indonesia which removed the obligation of patent owners to pay annuities on patents that lapsed through non-payment of earlier annuities.  However, despite this change, patent owners in Indonesia remain liable for any “annuity debt” that accrued under the old law.  Unless any such debts are settled in full by February 16, 2019, the Directorate General of Intellectual Property (DGIP) will refuse to accept any new patent applications from that patent owner.

Background

In many jurisdictions it is possible to abandon a patent simply by stopping annuity payments.  However, under the old Indonesian patent law (pre-2016), a patent could only be deemed abandoned, and no longer subject to annuity payments, if a patent owner submitted a request of abandonment to the DGIP. As such, patent owners who attempted to abandon their patents by non-payment of annuities without submitting an abandonment request still owe an obligation of annuity payment to the DGIP.

Indonesia’s New Patent Law Does Not Eliminate the Obligation of Annuity Payment Under the Old Law

On August 16, 2018, the DGIP issued a circular providing guidance with respect to the payment of outstanding patent annuities accrued under the old law.  The circular mandates that all patent owners should pay any outstanding annuities that have accrued by February 16, 2019.   Patent owners who fail to do so will face significant consequences.  Specifically, the DGIP has stated its intention to refuse any new patent application filings from patent owners who fail to satisfy their annuity payment obligation.  Essentially, such patent owners will be barred from obtaining patent protection in Indonesia from February 2019 on.

Additionally, it appears that the August 16th notice serves to clarify an earlier notice by the DGIP issued on December 28, 2017 which related to the revival of patents that were abandoned due to non-payment of annuities. In view of this latest notice, it appears that old patents can be revived if the payment of outstanding annuities is accompanied by a request to revive the patent and a declaration by the patent owner stating that they will not take any legal action against any parties that infringed the patent rights during the lapsed period.  Patent owners will be able to take legal action against any parties infringing any patent rights after restoration.

Thus, although the DGIP approach may be a burden for patent owners, it could equally represent a win-win, whereby payment of outstanding annuities will secure future filing rights, and, if desired, restore lapsed patent rights.

Next Steps for Patent Owners

Guidance is not yet available on how the DGIP will screen new applications for outstanding annuities from an applicant, the process for refusal of a new filing, and what (if any) grounds an applicant has to object to the refusal (particularly if the filing deadline has passed).  As a result, patent owners should carry out a review of their Indonesian patent portfolio to minimize the risk of a refusal in the future by confirming:

  • The status of all Indonesian patents in the patent register in the name of the patent owner;
  • Whether abandonment requests were submitted for abandoned patents;
  • That the Indonesian patent register is up to date and correct in respect of their patents; and
  • Whether any abandoned patents are worth reviving.

For patent owners with high amounts of unpaid annuities, it may be prudent to undertake a cost-benefit analysis and to ascertain if Indonesia remains a country of commercial value to seek patent protection in the future.

Please continue watch BRICS & Beyond for further updates on annuity payments in Indonesia.

This post was written by Lisa Mueller and Adam Denley, Desmond Tan and Karen Bentley of FPA Patent Attorneys.

 

Implementing Regulations Provide Clarity on the Working Requirement in Indonesia

September 21, 2018

Article 20 of Indonesia’s Patent Law requires patent owners to either manufacture their patented products in Indonesia or use their patented processes in the country.  Although controversial, the purpose of this working requirement is to drive foreign technology transfer, investment, and stimulate local employment opportunities within the country.

If an invention is not worked within thirty-six (36) months of grant, a third party can file an application for a compulsory license pursuant to Article 82, which is reproduced below:

Article 82
(1) A compulsory license shall constitute license to implement a patent granted by the Minister upon request by reason of:
a. Patent holder does not fulfill the obligation to make the product or using the process in Indonesia as referred to in Article 20 (1) within a period of 36 (thirty-six) months after being granted patent;
b. Patents have been implemented by the patent holder or licensee in the form and manner that is detrimental to the public interest; or
c. A patent resulting from the development of a patent that has been previously granted cannot be implemented without using another party’s patent that is still under protection.
(2) An application for a compulsory license referred to in paragraph (1) is free of charge.

As discussed above, an application for a compulsory license for failure to work an invention can be filed immediately after the expiration of 36 months from grant.  However, an application for a compulsory license can be filed at any time if the patent owner implements the patent in a form and manner that is detrimental to the public interest or if the development of a patented product could not be implemented without the use of another party’s patent which is still under protection.  According to Article 96, any person may apply for a compulsory license.

According to Article 83, examination of an application for a compulsory license is done by a team of experts assembled ad-hoc by the Ministry of Law.  Once the experts provide the results of their examination, the patent owner is given a period of time to respond.  When providing its response, the patent owner is afforded an opportunity to provide its own experts.  If the patent owner does not respond to the opinion of the experts, or does not do so timely, then the compulsory license will be approved.

On July 11, 2018, Implement Regulations were issued by the Indonesian Patent Office to provide more clarity on the working requirement.  Specifically, these regulations allow patent owners that are not yet able to work their inventions to postpone the obligation to do so for a maximum period of five years by submitting an application to the Ministry of Law along with the reason(s) for postponement.  Additionally, further postponement beyond the maximum period of five years may be granted upon request.  A fee may be required for filing a request for postponement.  However, whether a fee will be required and, if so, the exact amount, have not yet be announced.

Procedurally, according to Indonesian Patent Law No. 13 (2016), an initial request for postponement must be submitted by a patent owner within three years from the date of grant.  Because the working requirement just recently came into effect on August 26, 2016, the three-year period to submit a request for postponement would be (at the earliest), August 26, 2019.  However, the Indonesian Patent Office appears to have a different opinion regarding the date for the filing of such postponements.  Specifically, according to the Indonesian Patent Office, because the Implementing Regulations are effective from the date of promulgation (namely, July 11, 2018), a patent owner can file a request for postponement beginning July 11, 2018.  What this means is that all patents having a grant date after July 11, 2015 are subject to this requirement.  However, readers should be aware that the procedures for filing such a request are still under discussion.

While it is presently unknown what language will be accepted when filing a request for postponement, some examples of suggested wording to consider is provided below:

  1. If the product/process of the patent has not been used at all in Indonesia: “The patented product or process needs further development.”
  1. If the product of the patent has been imported or distributed in Indonesia but has not been manufactured domestically: “The patented product has been imported and distributed in Indonesia. However, taking into consideration the value of our product sales so far, the patent owner has not been able to make investment to bring the manufacturing technology into Indonesia.”
  1. If the patent relates to a process or method: “The patent owner does not have the facilities to implement the patented process, and until now, they do not have any cooperation or agreements with any local companies that are interested in using their patented process.”

Unlike the working requirement in India where patent owners and licensees are required to submit Form 27 by the March 31st every year detailing whether a patent was worked in India, there is no requirement under Indonesian Patent Law for patent owners and licensees to provide the Indonesian Patent Office/Ministry of Law with evidence that a patent is being implemented in the country.  However, a patent owner will be expected to prove that his invention has been implemented in the event that an application for a compulsory license is filed by a third party.  Therefore, it is important for patent owners to keep track and docket the 36 month deadline for working and timely request postponement of this requirement if necessary.

There are other consequences for not complying with the working requirement as well.  According to Article 132, a patent can be revoked for non-compliance with the working requirement.  However, only a public prosecutor or “other party that represents national interests” (and no other person) can request revocation if an invention is not worked.  Interestingly, it appears that not working an invention will not automatically result in a revocation.  Moreover, it seems unlikely that a public prosecutor will bring a revocation action against a patent unless it is against public interest.  Nonetheless, it will be interesting to watch the case law develop in this area.

Please continue to watch BRICS & Beyond for an update on the working requirements in Indonesia.

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