Category Archives: Indonesia

Indonesia Issued Regulations on Recordal of IP License Agreements

Understanding of Enactment

In order to make registered IP agreements to be fully effective, Indonesian government has issued regulations for Recordation of Intellectual Property License Agreement. This enactment will enable the licensor to easily license their Trademarks to the third Party.

Benefits from Agreement

This recordation of IP agreements shall benefit the Businesses through stable royalty structure of their IP license agreements and will enable to enter into other sectors which are out of their forte. This can result in increase of sale and public awareness on new business lines.

To avoid disputes and keep healthy relationship between the parties, all parties have to abide terms and conditions that are set in Trademark License Agreement which will be recorded with Directorate General of Intellectual Property Rights (DGIP), which falls under Article 43 (3) of the Indonesian Trademark Law (“GR No. 36/2018). If License agreement is not recorded as per prescribed guidelines- It can result in Cancellation of Trademark and will not hold any legal effect towards third party.

The record of license agreement may be made against any of the intellectual property field like copyright and other related rights, patent, trademarks, industrial design, integrated circuit layout design, trade secret, and plant varieties.

 The following are few of the general requirements for recordation of license agreement GR No. 36/2018 :

  1. The licensor should not grant license to the licensee if terms of protection have lapsed or IP registration is withdrawn.
  2. License agreement must be written in Indonesian language
  3. Agreement cannot include provisions that may Harm Indonesia’s economy or national interests or result in unfair business competition or conflicts with prevailing laws, religion, morality and public order.

 For recordation of License, either the licensor or the licensee may file IP license agreement with DGIP.

An IP license agreement should consist of:

  1. Date, month, year, and location where license agreement was signed
  2. Name and address of the licensor and licensee
  3. Object of the license agreement
  4. Provision on whether the license is exclusive or non-exclusive, including sub-licensing
  5. Term of the license agreement
  6. Territorial scope of the license agreement
  7. The party who will make annuity payment, in the case of patent

In such cases where licensor or licensee are Foreigners and domicile outside territory of the Republic of Indonesia, then application for recordation should be filed through a local registered IP Consultant.

Recordation process can be filed either manually or electronically, by attaching the following required documents:

  1. Copy of the license agreement
  2. Official excerpts of the relevant IP certificate, or proof of ownership of copyright or related rights
  3. Power of attorney, if such application is filed through a proxy
  4. Payment receipt of the official fee for recordation.

Once the application is submitted, examiner will review the application and verify all documents.

Once the application is complete, the examiner will inspect the authenticity of documents within five days of submission. Post verification, Letter of recordation for license agreement will be issued which will also be recorded with the relevant IP registry and the recordatoin shall be published in the relevant official gazette.

In case of incomplete documentation, examiner will issue a written notice to the applicant for providing requested documents or rectify any shortcomings within 30 business days after the notice is received. Failure to do so will lead to withdrawal of application.

 Reordation Period

Recordation of a license agreement will be valid for the term of five years, after expiration of this term; the applicant can re-apply for recordation.

The issuance of this regulation is a welcome development considering that a license holder does not have a recognized right in Indonesia to enforce the licensed intellectual property rights against an infringer in the absence of such recordal. Moreover, the license holder’s use of the IP will not be recognized as “actual use” by the IP owner if the license agreement is not recorded with the DGIP.

For applications which were filed prior to the issuance date of the Regulation No. 8 Year 2016 must request for recordation of an IP license agreement and shall be processed in accordance with the above regulations.

Author: Ms. Deepika Sharma, Sr. Patent Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at  deepika@iiprd.com.

References:

[1]https://id.rajahtannasia.com/media/3110/ahpclientupdate-06september2018.pdf

[2]https://www.tilleke.com/sites/default/files/IC_Nov%202018

[3]http://www.asiaiplaw.com/article/41/2635/

[4]http://www.gbgindonesia.com/en/main/legal_updates

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100 and counting: Indonesia joins Madrid Protocol

The Madrid Protocol is an international treaty which simplifies the procedure for international registration of trademarks by filing a single application along with onetime payment fee. The protocol was adopted at Madrid on June 27, 1989, amended on October 3, 2006 and further amended on November 12, 2007 [1]. The Protocol provides for convenient and effortless managing and registration of trademarks worldwide. A landmark moment in Madrid System history was October 2, 2017 as Indonesia officially became 100th member of the Madrid Union on this day. The instrument of accession to the Madrid Protocol with WIPO’s Director General was completed through the issuance of the Presidential Decree No. 92 of 2017. The Protocol will become effective for Indonesia on 2 January 2018 [2].

Indonesia is one of fastest growing top five G20 economies and a leader in global marketplace and membership in   Madrid Union opens up a direct path for Indonesian enterprises in new marketplaces like US, China, Europe and Japan. Indonesia is the eighth member of the Association of Southeast Asian Nations (ASEAN) to join the Madrid System after Vietnam which became member in 1995 [4]. It further reinforces the motto of ASEAN, to promote technology transfer throughout the region and stimulate innovation through strengthened IP-rights co-operation.

Once the Madrid Protocol comes to force, local economic growth will be stimulated as the Indonesian nationals will be able to seek protection of their trademark in the territory of other member countries. Likewise, the owner of an existing International Trademark Registration (IR) will be able to expand the scope of their protection by filing a subsequent designation to its existing IR, in order to seek additional protection in Indonesia.

The Presidential Decree No. 92 of 2017 provides that Indonesia has made the following declarations in regard to its accession to the Madrid Protocol [3]:

  1.  With respect to Article 5 (2)(b) of the Madrid Protocol, time limit of 18 months will be given to notify a refusal to the International Bureau against an international application made under the Madrid Protocol.
  2. With respect to Article 8 (7)(a), the Government declares its rights to receive fees produced from supplementary and complementary fees, in the event:
  • An international trademark application is intended for Indonesia
  • Indonesia becomes the next appointed country in the international registration
  • A renewal for an international registration is intended for Indonesia.
  1. With respect to Rule 20 bis(6)(b) of the Common Regulations (recording of licenses in the International Register), further on it will not have any effect in Indonesia.

The Madrid Protocol after gaining instrument of accession from Indonesia becomes the fifth WIPO administered treaty after the WIPO Convention, the Paris Convention, the Berne Convention and the PCT. Indonesia’s entry into the Madrid system as its 100th member clearly showcases its significance of being a key component of global protection of trademarks. It also highlights a cost-effective and reliably convenient solution it provides to global brand owners.

For an applicant to apply for trademark protection in Indonesia, he/she must browse the Global Brand Database which has almost 870,000 marks currently registered in that market before he/she files an international application.

Just before Indonesia entering into the Madrid system, Thailand became the 99th member of the Madrid System. The Protocol will enter into force for Thailand on November 7, 2017 [5]. This development can be seen as indication of news from remaining two ASEAN members, Malaysia and Myanmar.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

 [References]

[1]http://www.wipo.int/treaties/en/text.jsp?file_id=283484

[2]http://www.wipo.int/madrid/en/news/2017/news_0020.html

[3]http://www.wipo.int/madrid/en/members/declarations.html

[4] https://www.state.gov/p/eap/regional/asean/

[5]http://www.wipo.int/madrid/en/news/2017/news_0015.html