According to Indonesian Patent Law (Article 20), patent owners are obligated to make products or use processes that are covered by their patent in Indonesia in order to support technology transfer, investment and/or local employment.
If the invention is not worked (i.e. the patent owner does not carry out the obligation to make products or use processes covered by the patent) within 36 (thirty six) months after grant, a third party can file an application for a compulsory license (Article 82). The Ministry of Law will decide whether or not to grant the compulsory license based on the facts of each case.
To provide more clarity on the working requirement, implementing Regulations were issued on 11 July 2018. Importantly, the Regulations allow patent owners that are not yet able to work their inventions to postpone the obligation for a maximum period of five years by submitting an application to the Ministry of Law along with reason(s) for the postponement. Further postponement (i.e. beyond the maximum period of five years) may be granted upon request.
The initial request for postponement must be submitted by patent owners within three years from the date of grant. Since the law on working requirement only came into effect on 26 August 2016, the three-year period to submit an application for postponement would (at the earliest) be 26 August 2019.
We believe the following reasons for not implementing an invention may be acceptable:
(i) lack of ability or facility to commercially implement the patent within the period of 36 months
(ii) manufacturing or production might not be of an economical scale to the benefit of the community
We are of the understanding that it is not necessary to regularly provide the Indonesian Patent Office / Ministry of Law with evidence that the patent is being implemented. The patent owner will be expected to prove that his invention has been implemented in the event that an application for a compulsory license is filed by a third party.
Since the law on compulsory licensing only came into effect on 26 August 2016, the three-year period for requesting for compulsory licenses would (at the earliest) be 26 August 2019.
Furthermore, a Public Prosecutor or “other party that represents national interests” (and no other person) can request for an Indonesian patent to be revoked if the invention is not worked. We are of the understanding that not working the invention will not automatically result in revocation. In particular, a patent may be revoked if a Public Prosecutor or “other party that represents national interests” files the request for revocation. In our opinion, it is unlikely that a Public Prosecutor will file a request for revocation unless non-implementation of the patent is against national interests (e.g. non-working of a patented drug that is needed during a national emergency).
Should you have any questions in regard to this update, please don’t hesitate to contact us.