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.