Government to Work on a New Presidential Decree Draft on Patent Law Implementation

Ministry of Law and Human Rights is trying another approach to fix the patent law

By Gilang Ardana
Monday, December 18, 2017

The Ministry of Law and Human Rights, through its Director of Patents, Integrated Circuit Layout Design and Trade Secrets Dede Mia Yusanti, said that it is not going to revise the law to address issues over the implementation of Article 20. Instead, it will work to improve the presidential decree/draft implementing regulation.

The previous draft decree was returned by the Ministry of State Secretariat as it was considered “not investor friendly.” It was earlier reported that the law ministry would revise the law, but this was later reversed as the team feels it does not make sense to revise the whole law just because of one article.

Article 20 of the Patent Law mandates that the patent holder shall manufacture the product or use the process in Indonesia. The article also mandated that such a process should support the transfer of technology, the absorption of investment and/or the provision of employment. This has raised concerns from US, Japanese and European businesses over the complicated and discriminatory practices it will create for investors and existing foreign businesses in Indonesia.

As reported by Bisnis Indonesia, Dede said the patent implementing regulations are still the top priority for both the Coordinating Ministry for Economic Affairs and the Cabinet Secretary. However, in a separate interview, coordinating ministry Deputy for International Economic Cooperation Rizal Affandi Lukman, said that the Ministry of Law and Human Rights should not be in a rush to issue the implementing regulations so the policy outputs will not violate international treaties, which will further impact investor confidence in legal certainty in Indonesia.

Regarding Article 20, Rizal said that although there is a strong nationalistic influence on the Patent Law, it still follows international policy on patents.

"For our sake indeed we want to have investment with technology transfer, but it should be done carefully because another treaty (the Agreement on Trade-Related Aspects of Intellectual Property Rights – TRIPS) states that there should not be discrimination,” he told Bisnis Indonesia. 

AmCham Indonesia has been very active raising concerns over the Patent Law over the past two years. Our focus is to ensure the implementing regulations do not worsen the business climate. Aside from Article 20, AmCham also has shared input on Article 4 (on the feasibility of patent subjects); Article 78 (on commercial licensing) and Article 82-120 (on compulsory licensing) through letters, our investment initiative programs and a series of engagements with related government agencies.

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