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Indonesia – Patent Working Requirement

Since 26 August 2016, all patent holders are obliged to “work” their patented invention in Indonesia, by either manufacturing their patented products or using their patented processes within 36 months from the date the patent is granted – article 20 of Law No 13 2016 on patents (‘the new law’).

There are consequences for not complying with this “working requirement”. Notably, “non-working” of the patented inventions will open up an opportunity to any interested person to apply for a compulsory licence. Any person can apply for a compulsory license for failure to work an invention immediately after the expiration of 36 months from grant and with no official fees payable – article 82 of the new law. The Ministry of Law examines applications for compulsory licences and informs patent holders of the outcome. Generally, the patent holder will be given a chance to respond, for example, by producing evidence that the patented invention has been worked in Indonesia within the prescribed time period, so that the application for the compulsory licence can be refused. Nonetheless, if the patent holder fails to submit a timely response, the patent holder will be deemed to have agreed with the granting of the compulsory license.

Additionally, a patent can be subject to revocation by the Indonesian government if the patent holder fails to ‘work’ the invention as claimed in the granted patent within the prescribed time period.

In order to provide a reasonable timeframe for patent holders to comply with this newly implemented ‘working requirements’, a postponement regime was introduced by the Indonesian Government on 11 July 2018 under the Implementing Regulation No 15 of 2018. This postponement regime allows patent holders, especially who have yet to work their patented inventions in Indonesia, to defer their obligations by submitting a written request to the Ministry of Law along with reasons for the postponement. If approved, a postponement period of not exceeding 5 years may be granted. A further postponement (i.e. beyond the initial five years) may also be possible.

Several reasons for the postponement of “working” of a patent have been suggested, and which may deem to be acceptable, including:

1. the patented process or product needs further development;
2. lack of facilities to implement the patented process or products within 36 months from the grant of the patent; and
3. lack of investment to bring the manufacturing technology into Indonesia.

The implementation regulation includes a time limit for submitting an initial request for postponement. The initial postponement request has to be submitted within three years from the grant of a patent, accompanied by an official letter requesting the postponement of implementation of the patent under article 20 of the new law along with (i) an instruction letter from the patent holder indicating a valid reason for postponement, (ii) an original copy of a duly stamped Power of Attorney and (iii) an annuity payment receipt. It is important to note that postponement requests do not require any official fees and are only applicable to patents granted on or after 26 August 2016.

By: Denise Mirandah and Tai Yoke Yee

A version of this article was first published in the membership journal of the Chartered Institute of Patent Attorneys – see more at http://www.cipa.org.uk/.