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. For more information regarding Patent Law and Patent Practice in Indonesia, please contact us at [email protected].

Following several protests from various Chambers of Commerce around the world, the Government of the Republic of Indonesia is set to issue implementing regulation of Article 20 of Law No. 13 Year 2016 on Patents. The article stipulates that the Patent Holder shall manufacture the patented products or to use the patented process in Indonesia. The aim of this provision is not other than to support technology transfer and to increase the level of Direct Foreign Investment in Indonesia. This provision is meant to reflect the content of Article 7 of the TRIPS Agreement which stipulates that the IP enforcement shall contribute to the promotion of innovation and the dissemination of technology.   While the draft content remains out of public sight, we are adamant that the content of the Regulation will revolve on the authority of the Ministry of Law and Human Rights to form a specialized unit which role is to decide whether or not the Patent Holder can delay the manufacturing or the use of Patented Invention in Indonesia or not.   We shall update you with the draft bill once it is made available to public.   Should you have any question please contact us at [email protected] or visit our website for future updates regarding Patent Law in Indonesia.