Patent protection system application

Patent protection system application

This is the second article on patent protection in Indonesia
by James B. Lumenta, a senior intellectual property lawyer of
Amroos Law Consultants in Jakarta. He is currently a researcher
on Asia Pacific Intellectual Property Law, at Murdoch University
in Perth.

PERTH (JP): To help the patent office acquire more information
required in dealing with a thorough examination of a proposed
patent, the deferred examination system adopted by the 1989 law
will remain unchanged, except for the patent office's time period
of publication, which had aroused strong protest in the past.

Under current provisions, the patent office is obliged to
publish a preexamined patent application within six months from
the filing date of the patent application or 12 months from the
priority date, in the case of a convention application.
Interestingly, the statutory period has now been changed to 18
months. Such a publication will stand for six months for those
interested in public inspection and opposition.

A request for a substantive examination should be filed in
writing within 36 months of the filing date of the patent
application, but not before the expiration date of the six-month
statutory period for opposition (Article 55 and 56).

For the purpose of a substantive examination, it further
provides that the Indonesian patent office may request for the
assistance from foreign experts or make use of the facilities of
"other patent offices" through international patent cooperation
(Article 58).

No later than 36 months after the date on which a request for
examination is received, the Indonesian patent office shall be
obliged to render its decision as to whether the patent applied
for is to be granted or refused (Article 61).

A patent shall be issued upon grant and recorded in the patent
rolls, thereafter published in the patent's official journal
(Article 64).

In the event of refusal, the applicant may appeal to the
Patent Appeal Commission within three months from the date of
refusal (Article 70). Any decision handed down by the Patent
Appeal Commission shall be final and conclusive. In other words,
under no circumstance can it be subject to judicial review
(Article 71).

Since it is a decision issued by an administrative body of the
executive branch, it is not surprising for it to be classified
unconstitutional and against both the civil rights and judiciary
power of the Supreme Court.

Apart from the above academic objections, it is nothing worse
than the fact that there has never been an existence of such a
Patent Appeal Board in the history of Indonesian patent practice.
Consequently, if there is any refusal, no one, including the
officials, knows what recourse is available.

To comply with Article 33 of the TRIPs Agreement, the duration
of a patent for a invention under the forthcoming statute shall
be 20 years from the filling date of the patent application
(Article 9). This is a change from the 14-year term of protection
provided in the 1989 law.

In regard to simple patents (utility models or petty patents),
which largely involve indigenous technology filed by local
people, the term of protection shall be available for 10 years
"from the date of grant". Under no circumstance can it be the
subject of a compulsory license (Article 112).

Among the most controversial and sensitive issues causing
nuisance to particular industrialized nations are the provisions
on compulsory licensing.

Before we examine everything provided by the Indonesian Patent
Law, it is essential that we first look at the principles and
rules established by the Paris Convention, and the TRIPs
Agreement as well.

The Paris Convention permits each country to grant compulsory
licenses to prevent abuse (Article 5A2), which has to be applied
for by an interested party after four years as from the patent
application filing date or three years from the date of grant of
the patent, whichever period expires last (Article 5A4). Where
such a compulsory license has not been sufficient to prevent
abuse, forfeiture of the patent may occur. However, proceedings
for the revocation may be instituted only after two years from
the grant of the first compulsory license (Article 5A3).

Neither "abuse" or "compulsory license" is defined in the text
of the Paris Convention, although it does give an example of
abuse, defined as "failure to work".

Although under the Paris Convention, neither the term
"compulsory license" nor any reference to the insufficiency or
failure of a patent as a principal justification to compulsorily
license could be found in the TRIPs Agreement.

Article 31 of the TRIPs Agreement provides quite a number of
detailed conditions on the so-called "other uses of subject
matter of a patent without authorization of the patent holder"
(which is generally known as compulsory licensing). The "other
use" here is a use other than that allowed under Article 30,
which permits members to provide limited exceptions to the
exclusive right of a patent, as long as it "does not unreasonably
conflict with the normal exploitation of the patent and does not
unreasonably prejudice the legitimate interest of the owner
and...third parties".

Article 31 provides no limit to the grounds upon which
compulsory licenses may be granted, it merely sets out the
"conditions" to be met "where the law of a member allows for
other uses". Conditions that are provided:

-- the grant of a compulsory license shall be considered on
its individual merit;

-- only if prior efforts to obtain authorization from the
patent holder have not been successful within a reasonable period
of time. This requirement is subject to national emergency and
public non-commercial use and to payment of "adequate
remuneration" which shall remain open to judicial review.

A compulsory license shall be granted by a district court, by
request of an interested party, on the grounds of a nonworking
patent in Indonesia by the patent holder after three years from
the date of a grant. Compulsory licenses shall also be available
in the event when exploitation of a patent was in such a manner
as to prejudice the interests of society (Article 82).

In addition to the grounds of nonworking, some other
conditions to be met by an applicant of a compulsory license
shall include (Article 83.1):

(a) persuasive evidence which establishes that the applicant:

(1) is capable of fully exploiting the patent in question;

(2) has their own facilities to immediately work the patent;

(3) has made necessary efforts within a sufficient period of
time to negotiate with the patent holder on reasonable terms and
conditions, but was unsuccessful in gaining authorization from
the patent holder.

(b) the court's belief that the patent can be exploited in
Indonesia in a feasible economic scale for the benefit of
society.

Furthermore, the amount of royalty payable to the patent
holder as well as the methods of payment shall be determined by a
district court (Article 85.2); the nature of the compulsory
license shall be "nonexclusive" (Article 86a) and such use shall
be predominantly for the supply of the domestic market (Article
86g).

A compulsory license shall also be available where a patent
cannot be exploited without infringing another patent, on
condition that the invention claimed in the second patent shall
involve a technical advance of great significance compared to the
invention claimed in the first patent, and in which the owner of
the first patent is entitled to a cross-license to use the
invention claimed in the second patent, and use of the first
patent by the compulsory licensee shall not be assignable, except
be assigned all together with the second patent (Article 88).

With respect to all the provisions on compulsory licensing, no
one will see any reason to contest its conformity with the
principles and rules provided in the text of the TRIPs Agreement.
Anyway, if we look into the grounds on which to grant a
compulsory license and the concept of "working" or "nonworking"
of a patent under the Indonesian system, it would certainly make
a great difference.

As for Indonesia, it is a matter of principle, that a patent
holder shall be obliged to work or exploit their patent within
the jurisdiction of the Republic of Indonesia (Article 18.1),
subject to limited exceptions to be provided for under government
regulations (article 18 paragraphs 2 to 4). This constitutes the
working of a patent, despite the exclusive right vested in a
patent holder to prevent unauthorized importation by third
parties of a patented invention into the country (Article 17).
The fact remains that no action whatsoever can be initiated to
prevent such unauthorized imports unless the patent has been
exploited in Indonesia by the patent holder (Article 21).

Nevertheless, in respect of forfeiture of a patent, the law
establishes a plain copy of the text derived from Article 5A3 of
the Paris Convention, in case a compulsory license has not been
sufficient to prevent abuse which is prejudicial to public
interest. Forfeiture of the patent may occur, however proceedings
for the revocation may be instituted only after 2 years from the
grant of the first compulsory license (Article 97.1c).

It is beyond doubt that the inclusion of an enforcement
mechanism in the TRIPs Agreement has been a great revolution in
the international intellectual property regime this century.
However, the effectiveness of this new mechanism for the
protection of intellectual property remains to be seen.

Since the system introduced under Part III of the TRIPs
Agreement is a typical common law system as opposed to the civil
law system adopted by Indonesia, it might take quite a long time
for the country to make some compromising adjustments to the
prevailing legal procedures as a whole.

Despite the tough enforcement mechanism provided under
Articles 41 to 60 of the agreement, that members shall
incorporate into their national laws, many are skeptical if this
could be effectively enforced in Indonesia.

Both civil remedies and criminal penalties are available for
patent infringements under current and proposed law.

In civil proceedings, a patent holder or their licensee is
entitled to ask for an injunction, damages and delivery of the
infringing products (Articles 122-123). Through criminal action,
there are two categories of penalties that can be cumulatively
imposed on two different types of offenders (Articles 126-127):

-- a maximum 7-year prison term plus a maximum Rp 100 million
fine for counterfeiting a patent for invention; and

-- a maximum 5-year prison term plus a maximum Rp 50 million
fine for counterfeiting a simple patent.

However, all legal proceedings shall basically be subject to
general provisions set out by prevailing codes of civil procedure
and criminal procedure.

It is worth noting that a number of new provisions have been
added to the prospective law, to be in line with TRIPs
provisions. For example, the reversal of the burden of proof to
defendants in civil proceedings where an infringement of a
process patent (Article 123A) and seizure by the Government and
destruction of infringing articles is involved (Article 128A).

Window A: Among the most controversial and sensitive issues
causing nuisance to particular industrialized nations are the
provisions on compulsory licensing.

Window B: Both civil remedies and criminal penalties are available
for patent infringements under current and proposed law.