As a response to many critics of Article 20 of the Law No. 13 Year 2016 on Patents (Patent Law), the Government of the Republic of Indonesia has finally issued a draft Presidential Decree on the Implementation of Patents by Patent Holders. As you may be aware, Article 20 of the Patent Law puts an immense pressure on the Patent Holder to either use the patented process or manufacture the patented products in Indonesia. Failure to do so, the patent registration may be subject to invalidation.
While Article 20 of the Patent Law may be seen to have noble purposes – such as to speed up the transfer of technology and to incentivize foreign direct investments in Indonesia, this Article was proven to be one of the Articles many Patent Applicants and/or Holders – especially from the pharmaceutical industry – criticized since in actual business practice, setting up manufacturing plants is not always feasible given many factors such as cost, labour law, and restrictions on shares that may be owned by foreign entities in particular industries.
Article 3 of the draft Presidential Decree stipulates that Patent Holders that have not manufactured their patented products or use their patented process are able to request the postponement of the implementation of a Registered Patent as stipulated in Article 20 of the Patent Law as long as the Patent Holder meets the following conditions:
- The Patent Holder does not have the capability to implement the patent and/or
- The implementation of the patent does not have justifiable economy value.
The Patent Holder may request the postponement after 24 months at the earliest and 30 months at the latest effective from the Registration Date. The postponement request shall be granted after 36 months from the Registration Date.
Kindly be advised that the Ministry will conduct an examination and there is still a chance that they will reject the request.
Please bear in mind that the draft will be subject to revisions. We will inform you once the Presidential Decree has been finally passed.