Indonesia’s growth in recent years has been impressive. While it has experienced a slight slow-down, it remains the largest economy in the Association of Southeast Asian Nations (ASEAN). The country’s Gross Domestic Product (GDP) is the 8th largest in the world in terms of purchasing power parity (PPP) and its Gross National Income (GNP) per capita has risen by around EUR 537 over the last 8 years.
Between 2009 and 2013, the average growth rate of EU imports to Indonesia was 5.2%; by 2013, EU goods exported to Indonesia totaled EUR 9.7 billion. The EU is Indonesia’s fourth largest trading partner after Japan, China and Singapore. The EU’s exports to Indonesia are typically high tech goods, transport and aviation equipment manufacturing goods and chemicals. The Indonesian government is attempting to reduce its reliance on palm oil and fossil fuel exports and is encouraging foreign investment in the manufacturing sector.
Why should I be interested in IPR?
Indonesia offers attractive prospects for EU SMEs seeking to expand their businesses in South-East Asia. It accounts for one third of South-East Asia’s GDP. It offers a growing consumer base, comparatively cheap labour and raw materials, and a favorable environment for foreign direct investment (FDI) as a result of the Indonesian government’s “Masterplan for the Acceleration an Expansion of Indonesia’s Economic Development.”
Companies spend a considerable amount of time and financial resources on international expansion. Researching a local market, designing business tactics, identifying local partners, intermediaries and distributors and understanding consumer patterns and demands in a new market involve significant investment. Each of these stages of business development can therefore be considered as IP assets.
IP includes more than technological inventions. It includes expertise, products, processes, trade marks, designs, written material, business strategies, sounds and smells – and more. IP includes anything that distinguishes your business from another, your unique selling points (USPs), so to speak.
Taking time to understand the IP landscape in the country that you intend to do business in can both save and make you money, and can help you avoid the pitfalls associated with another country’s legal system. IP is key to the competitiveness of your business in today’s global economy.
Does Indonesia’s IPR comply with international standards?
Indonesia is a member of the World Trade Organization (WTO), and has sanctioned the Agreement on Trade-related Aspects of Intellectual Property (TRIPs Agreement). Indonesia has also ratified the Paris Convention. What this means for EU SMEs is that, generally speaking, Indonesia’s IP legislation is now fairly comprehensive, and covers all aspects of IP protection in accordance with international standards. However, IP enforcement mechanisms in Indonesia need strengthening, since IP laws are not yet matched by an efficient criminal enforcement or customs border protection system and there is little confidence in Indonesia’s civil court system. More information on each treaty can be found on the World Intellectual Property Organization (WIPO) website.
What should I watch out for in Indonesia?
- It is possible (though not compulsory because protection arises automatically in Indonesia) to apply for recordal of a copy right at the Copyright Office. Recordal serves as evidence of ownership (unless proven otherwise).
- Although there is no requirement to register copyright in order for the work to be protected it is still advisable for European SMEs to register copyrights in Indonesia. One reason for this is that police commonly ask for evidence of recordal (or registration in another Berne member country) before they will proceed with criminal enforcement action.
- Most patent applications are granted based on corresponding applications of foreign grants. Such foreign grants should be from patent offices that are known to conduct independent examination; these can be in any Patent Cooperation Treaty (PCT) country.
- Patent specifications need to be translated into the local language and translation error is common. It is recommended that applicants pay special attention to the translation of the independent claims as these are the most important part of the document.
- Industrial designs need to be new when the application is filed. If a design has already been disclosed to the market through production and sales, some IP owners try to protect their designs as copyright.
- Because of the bad-faith registration risk, you should consider registering your most important trade marks in Indonesia even before you commence business dealings there.
- Indonesia applies a ‘first-to-file’ system, meaning that trade mark rights arising from first use are not recognised.
- Bad faith arguments can be successful where there is evidence of a relationship between the concerned parties, or if it is clear that a well-known mark has been copied.
- In a trade secrets case it is necessary to prove that the trade secret has been taken by the suspected party, and to establish that the trade secret has been maintained (kept secret) by its owner.
- Proceed with caution when engaging investigators. Indonesian law accords certain privacy rights, and infringers themselves could complain in a criminal case that their own privacy rights were infringed.
Specific information about protecting your copyrights, patents, industrial designs, trade marks and trade secrets in Indonesia can be found in our Indonesia country factsheet.
With thanks to our Indonesia Expert, Andrew Conduit, for Indonesia-specific IPR advice and policy updates.