GovWire

1. Introduction

IP enforcement remains a business concern in Indonesia. The inadequacy of IP enforcement information and resulting lack of transparency is a barrier for foreign investors. This Manual on IP enforcement in Indonesia has been developed for businesses operating in or planning to expand into Indonesia. It aims to provide foreign businesses with a picture of how the IP enforcement system works in Indonesia. It includes details of the laws and regulations as well as the IP enforcement procedures in Indonesia. It uses a definition of enforcement that parallels the World Trade Organisations Trade Related Aspects of Intellectual Property (TRIPS) Agreement.

This means it focuses on trade mark and copyright enforcement procedures which in common parlance means trade mark counterfeiting and copyright piracy. The types of enforcement systems used to deal with these two issues are most commonly criminal, administrative, including Customs, as well as the civil courts. Other forms of IP exist (e.g. patents, designs) but their enforcement is more usually limited to or appropriate for civil court systems only.

The Manual is up to date as of 30 April 2020. The Manual is for informational purposes only so users of this Manual should take local legal advice on specific IP cases.

2. Overview of Indonesias legal and IP system

Businesses including foreign investors need to engage with legal systems for many reasons. It is especially challenging for foreign businesses to engage with complex, unfamiliar foreign legal systems. Therefore, simpler judicial procedures, efficient enforcement systems and clear and effective legal remedies are needed. The protection of IP is a particularly challenging and technical area. It usually requires a blend of civil court remedies (e.g. to claim damages), criminal procedures (e.g. to stop counterfeiting), and administrative remedies (e.g. Customs IP border protection systems).

IP must be recognized and protected first. This usually means registering trade marks, designs, and patents at the government IP office or providing protection for unregistered rights like copyrights and trade secrets under international treaties. Indonesia has relatively well-established systems to do this. But mere registration of IP is not a business goal. What matters is how businesses can make use of their IP commercially, and whether a country provides a system for IP protection and enforcement and how effective that is.

IP enforcement systems are a subset of a countrys legal system. It is therefore necessary for foreign businesses to understand the strength and independence of a countrys legal system before looking at how well the IP enforcement procedures operate.

Indonesias legal system draws on traditional/customary/adat law, Islamic law (sharia) and Dutch colonial law (a constitutional system) and then, post-independence, additional laws were laid on top of these. This created a complex plural legal system. Since then several reforms have been undertaken to improve the quality of the legal system. It is an ongoing challenge for the government to upgrade the legal system.

Indonesia is a civil law country based on a Constitution. This means Parliament makes all the laws; there is no common law. Government and Ministries can make regulations and there are subsidiary rules below that. The Supreme Court is the highest court above the high courts and then the district courts. There are a number of specialist courts such as the Commercial Courts that hear Bankruptcy and IP cases. Indonesian courts use a non-adversarial system with Judges having a proactive role in cases.

Lawyers or Advocates can be engaged to handle legal issues and the legal profession is governed by the Advocates Law and the bar association called the Perhimpunan Advokat Indonesia (PERADI)

Indonesia like many developing countries faces various challenges with its legal system. The World Justice Project Rule of Law Index 2020 ranks Indonesia 59/128. The areas it identifies most in terms of legal weakness in Indonesia include the Civil Justice system, Criminal Justice system and Corruption. The Ease of Doing Business index by the World Bank Group ranks Indonesia 73/190with legal issues being one of the biggest challenges. Transparency International placed Indonesia at a rank of 85/180 countries in its Corruption Perceptions Index for 2019. It noted in the Report that despite a very slight improvement in Indonesias score, it continues to struggle to tackle corruption. It reported corruption in all branches of government including IP and the legal system.

IP system

IP is a technical area of law. While many general lawyers do practice IP law, in many countries there is a separate IP profession. In Indonesia, IP Consultants are lawyers who advise on and register IP. Indonesian Intellectual Property Association is the IP law professions industry associationin Indonesia.

IP systems can be broken into three components:

• registration and protection system. This refers to the registration system operated by the Directorate General of Intellectual Property (DGIP), a department at the Ministry of Law & Human Rights. AtDGIPone can register trade marks, designs and patents and there is also a voluntary Copyright recordal system.DGIPalso has various policy functions
• commercialisation of IP. This typically means IP contracts such as licenses, assignments, and other commercial agreement involving IP
• enforcement through the civil and criminal courts and administrative routes

DGIPs role is generally to manage the registration systems, but they also have an enforcement function. However, it has a limited role with the courts.

In addition to the technical nature of IP, issues that arise in IP registration and protection, deployment of IP assets through contracts as well as the enforcement of IP make it a complex area for the novice. Typically, specialist external IP attorneys assist businesses in all aspects. Many larger corporations have specialist in house IP attorneys.

In recent years, Indonesias IP system has undergone a number of improvements. The amendment of the IP laws is the major reason for this. IP is governed by individual laws which cover Trade marks, Designs, Patents, Copyright, Trade Secrets and so on.

The EU Commissions Report on the protection and enforcement of IP rights in third countries 2020 cites Indonesia as a Priority 2 country, due to concerns in the area of IP protection and enforcement such as high levels of trade mark counterfeiting and copyright piracy, lack of customs IP protection, weak civil court enforcement systems and a lack of dedicated criminal IP enforcement units. Indonesia remains on the US Governments Priority Watch List under the 2020 US

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