Justification of IP Protection and Recent Developments in Indonesia

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Justification of IP Protection and Recent Developments in Indonesia
4 May 2023

The World Intellectual Property Organization ("WIPO") first commemorated April 26 as World IP Day in 2001. However, intellectual property ("IP") dates back much further, to at least Gutenberg's printing press, and it has rapidly developed ever since and become embedded in many aspects of everyday life.

This article is a reminder to relevant stakeholders of the importance of IP and a look at recent developments related to IP in Indonesia.

Justification of IP Protection

First, we will look at the justifications for IP rights to subsist. There are several different theories, including (i) the natural rights theory of John Locke that holds that IP rights should be granted to authors, inventors, creators, and designers for their intellectual labours; (ii) the personality theory of Hegel that views IP rights as beneficial to safeguard one's self-actualisation, personal expression, dignity and recognition of said individual; and (iii) human rights theory, which is encapsulated in Article 27 of the United Nations' Universal Declaration of Human Rights, that everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.

Such justifications for IP protections led to the formation of WIPO, several international conventions, and national laws and regulations governing IP protections. In Indonesia, IP protection has proven to be of great importance as it brings many benefits to the nation, including creating a fair business environment for domestic and foreign parties to conduct business in Indonesia.

The general justifications for IP protection also apply to Indonesia. Law No. 20 of 2016 regarding Trademark and Geographical Indication, as last amended by Law No. 6 of 2023 regarding the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 regarding Job Creation to Become a Law ("Job Creation Law") ("Trademark and Geographical Indication Laws") states that trademarks and geographical indications are crucial in safeguarding healthy and fair business competition, consumer protection, and micro, small, and medium enterprises, as well as domestic industries in general.

Law No. 13 of 2016 regarding Patent, as last amended by the Job Creation Law ("Patent Law"), states that patent protection is pivotal for motivating inventors to increase their work and promote the welfare of the nation and the state, as well as creating a healthy business climate. Similarly, Law No. 28 of 2014 regarding Copyright ("Copyright Law") stipulates that copyright protection has a strategic role in supporting the nation's development and promoting general welfare. Other IP laws and regulations, namely Law No. 30 of 2000 regarding Trade Secrets, Law No. 31 of 2000 regarding Industrial Design, Law No. 32 of 2000 regarding Layout Designs of Integrated Circuits, and Law No. 29 of 2000 regarding Plant Variety Protection, as amended by the Job Creation Law (these laws, as well as the Trademark and Geographical Indication Law, Patent Law, and Copyright Law, are collectively referred to as the "IP Regulations"), express a similar motivation to support the nation's development and promote general welfare.

Recent Developments in Indonesia

IP protection is perhaps even more relevant today than ever. The advancement of technology and the Internet of Things calls for increased scrutiny and a fresh way of looking at how IP can be used to safeguard rights holders and, at the same time, not hinder the promotion of general welfare. In some cases, new technologies may give rise to discussion of whether amendments to the IP Regulations are required.

IP as Collateral

Government Regulation No. 24 of 2022 regarding the Implementing Regulation of Law No. 24 of 2019 regarding Creative Economy ("GR 24/2022"), which was promulgated on July 12, 2022, was issued by the government to support creative economy actors and their IP-related business. GR 24/2022 contains provisions on how IP can be used as collateral.

Although it is still a work in progress to establish an ecosystem that allows the use of IP as collateral, the government has taken a step in the right direction in utilizing IP to enhance right holders' businesses.

For more information, see our article New Regulation in Indonesia Focuses on IP Financing.

IP and Artificial Intelligence 

The rise of artificial intelligence ("AI") technologies calls for discussion of whether the existing IP Regulations need reform. AI, by its nature, is a product of innovation resulting from the labours of human minds. Therefore, provided that it fulfils the formal and substantive requirements, there is no question that AI may be eligible for IP protection. Among the different types of IP, patents and trade secrets that protect technologies would be the most appropriate types of IP to protect AI. However, AI can also create subsequent innovations, not only in the technological realm but also in literary and creative works, designs, and logos. So, the question is whether IP protection can subsist in AI-generated products.

There is no uniform answer when it comes to the different types of IP. Some IP rights, such as patents, copyrights, industrial designs, and layout designs of integrated circuits, cannot, because of their nature, be extended to protect AI-generated inventions, works, or designs, at least if AI is solely responsible for generating such inventions, works, or designs. As for other inventions, works, or designs that AI generates with human intervention, it is debatable if the existing IP Regulations adequately address these questions related to AI, so changes to these regulations may be required.

Until the IP Regulations adequately address the intersection between IP and AI, and supplement IP protection, it is advisable to look at the personal data protection and consumer protection regulations to strike a balance between IP holders and users of AI technologies.

POP Merek

Applause must be extended to the Directorate General of Intellectual Property ("DGIP") of the Ministry of Law and Human Rights ("MOLHR") for many of its innovations in making the process of obtaining IP rights protection in Indonesia easier. One of these innovations is called POP Merek. This is an integral part of the DGIP's Trademark Registration Portal that allows for the process of trademark renewal, obtainment of official citation of trademark registration, and the recording of trademark license to be done in an instant. With POP Merek, applicants can obtain trademark renewal certificates, official citations, and certificates of the recording of trademark licenses within a few minutes.

IP Marketplace

In addition to easing the process of obtaining IP protection, the DGIP also introduced the IP Marketplace to ease the commercialization of IP. The IP Marketplace is designed to allow IP holders to promote, sell, and license their IP rights to potential investors.

E-Court System for Commercial Court

The Central Jakarta District Court has also introduced a new system to help IP holders enforce their IP rights in Indonesia. On January 18, 2023, the Head of Central Jakarta District Court introduced the e-Court Registration System for the Commercial Court of the Central Jakarta District Court. The new system was introduced through Decree of the Head of Central Jakarta Special Class IA District Court No. W10-U1/05/KP.00.3/I/2023 of 2023 regarding the Implementation of e-Court Registration at the Special Civil Registry (Commercial/PHI) at the Central Jakarta Special Class IA/District Court.

Commercial Courts, specific chambers of District Courts, hear the civil proceedings for most types of IP (except for trade secrets and plant variety protections, which District Courts hear), including IP cancellation, deletion, infringement, and appeals of decisions of the Trademark Appeal Commission and Patent Appeal Commission. Also, IP civil proceedings involving parties domiciled abroad are brought to the Commercial Court of the Central Jakarta District Court. The introduction of e-Court Registration at the Central Jakarta District Court provides a simplified filing system for civil IP proceedings at the Central Jakarta District Court.

If these new trends making it easier for IP holders to protect, commercialise, and enforce their IP rights are maintained and improved, it will benefit the social, cultural, and economic life of Indonesia. When such an environment is established and nurtured, in line with the justification of its subsistence, IP can benefit not only rights holders but all Indonesians.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user’s own risk. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.

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