A registered Patent not only grants the Exclusive Right to its owner to prohibit others from using the invention but also imposes an additional obligation to implement the Patent. This obligation is regulated under Law Number 13 of 2016 concerning Patents, as well as Law Number 65 of 2024 concerning the Third Amendment to Law Number 13 of 2016, which has been in effect since October 28, 2024.
How is the obligation to implement a Patent regulated, and what are the legal consequences if a Patent is not used under the latest Patent Law? Here’s the summary!
Previously—and still applicable—Article 20 of the Patent Law has regulated the obligation to implement Patents in Indonesia as follows:
- Product Patent:
Obligated to manufacture, import, or license the product.
- Process Patent:
Obligated to manufacture, license, or import the product resulting from the patented process.
- Method, System, & Use Patents:
Obligated to manufacture, import, or license the product resulting from the method, system, or use.
Obligation to Implement Patents in Indonesia
In this third amendment, Article 20A has been added to the Patent Law, stipulating that every Patent holder is required to submit a declaration of Patent use in Indonesia and report it to the Minister through Directorate General Intellectual Property (DGIP) at the end of each year, accompanied by proof of implementation. The implementation of the Patent may be carried out either by the Patent holder or by a third party under license from the Patent holder. The objective of this provision is to encourage technology transfer, investment, job creation, and tangible economic growth for Indonesia.
Forms of Patent implementation may include:
- Manufacturing goods or utilizing processes protected by the Patent in Indonesia.
- Transferring technology to third parties in Indonesia.
- Collaborating in manufacturing with local companies.
Consequences of Non-Implementation of Patents
In this latest amendment, provisions regarding consequences such as compulsory licensing or Patent revocation, which were previously regulated under Articles 82 and 130 of the Patent Law, have been removed.
Instead, the annual reporting obligation as stipulated in Article 20A serves as an instrument for the government to monitor Patent utilization in Indonesia.
Although administrative sanctions for non-compliance with the reporting obligation are not explicitly regulated yet, this obligation opens the possibility for the government to issue further implementing regulations or administrative policies in the future.
Acceptable Reasons for Delayed Implementation
Previously, the Patent Law allowed Patent holders to provide legitimate reasons for not yet implementing their Patent, such as:
- Force majeure circumstances.
- Regulatory or licensing obstacles to production.
- Production still in preparation stages.
In the amended Patent Law, although these reasons are no longer explicitly listed, Patent holders may still include such reasons in their annual reports as part of the explanation or justification in cases where implementation has not been optimal.
You might also want to read:
5 Stages of Patent Registration Process in Indonesia
Should you need further information regarding the Patent implementation in Indonesia and Its consequences if the Patent is not used, feel free to contact us at [email protected].
