On Dec. 28, 2018, the Ministry of Law and Human Rights released Regulation No. 39 of 2018 concerning the Procedures for Granting of Compulsory Licensing (CL). The regulation is one of the implementing regulations for the Patent Law (Law 13/2016) released back in 2016.
The regulation came as a surprise for many companies, especially as there was no prior consultation with the private sector in its drafting process. Initial reading shows the regulation needs further clarity in terms of scope, urgency and technical guidelines as some articles contain very general and/or vague provisions related to CL implementation. It’s also not yet known what prompted the Ministry of Law and Human Rights to release the regulation.
According to the regulation, the application of CL may be granted to a third party if:
- The patent holder does not perform its obligation (as mandated by the Patent Law) to manufacture product(s) or use process(es) in Indonesia within 36 months after the patent is granted
- The patent has been implemented in a form and manner detrimental to society
- The patent cannot be implemented without using other patent which is still under protection.
The application of CL will be assessed by an ad-hoc expert team appointed by the Minister of Law and Human Rights.
Article 22 of the regulation specifically governs the use of CL for pharmaceutical products, which states that the Minister of Law and Human Rights may grant CL to produce, import and export pharmaceutical products with patents in Indonesia for the purpose of “curing human disease.” There are no further details in the article on how it will be implemented.
The release of the regulation also potentially contradicts Ministerial Regulation No. 15 of 2018 on the postponement of local manufacturing requirements, which allows patent holders to delay the implementation of local manufacturing for five years, and can be extended. The release of the CL regulation opens up a greater risk for patent holders applying for a postponement that their product will be requested for CL.
