You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

September 24, 2018

Implementing Regulations Provide Clarity on the Working Requirement in Indonesia

Subscribe to Updates
BRICS & Beyond

Article 20 of Indonesia’s Patent Law requires patent owners to either manufacture their patented products in Indonesia or use their patented processes in the country.  Although controversial, the purpose of this working requirement is to drive foreign technology transfer, investment and stimulate local employment opportunities within the country.

If an invention is not worked within 36 months of grant, a third party can file an application for a compulsory license pursuant to Article 82, which is reproduced below:

Article 82 

(1) A compulsory license shall constitute license to implement a patent granted by the Minister upon request by reason of: 

a. Patent holder does not fulfill the obligation to make the product or using the process in Indonesia as referred to in Article 20 (1) within a period of 36 (thirty-six) months after being granted patent; 

b. Patents have been implemented by the patent holder or licensee in the form and manner that is detrimental to the public interest; or 

c. Patent resulting from the development of a patent that has been previously granted cannot be implemented without using another party’s patent that is still under protection.

(2) An application for a compulsory license referred to in paragraph (1) is free of charge.

As discussed above, an application for a compulsory license for failure to work an invention can be filed immediately after the expiration of 36 months from grant. However, an application for a compulsory license can be filed at any time if the patent owner implements the patent in a form and manner that is detrimental to the public interest or if the development of a patented product could not be implemented without the use of another party’s patent which is still under protection. According to Article 96, any person may apply for a compulsory license.

According to Article 83, examination of an application for a compulsory license is done by a team of experts assembled ad-hoc by the Ministry of Law. Once the experts provide the results of their examination, the patent owner is given a period of time to respond. When providing its response, the patent owner is afforded an opportunity to provide its own experts. If the patent owner does not respond to the opinion of the experts, or does not do so timely, then the compulsory license will be approved.

On July 11, 2018, implementing regulations were issued by the Indonesian Patent Office to provide more clarity on the working requirement. Specifically, these regulations allow patent owners that are not yet able to work their inventions to postpone the obligation to do so for a maximum period of five years by submitting an application to the Ministry of Law along with the reason(s) for postponement. Additionally, further postponement beyond the maximum period of five years may be granted upon request. Finally, a fee may be required for filing a request for postponement.  However, whether such a fee will be required and the exact amount have not yet be announced.

Procedurally, according to Indonesian Patent Law No. 13 (2016), an initial request for postponement must be submitted by a patent owner within three years from the date of grant. Thus, because the working requirement just recently came into effect on August 26, 2016, the three-year period to submit an application for postponement would be (at the earliest) August 26, 2019. However, the Indonesian Patent Office appears to have a different opinion regarding the date for the filing of such postponements. Specifically, according to the Indonesian Patent Office, because the implementing regulations are effective from the date of promulgation (namely, July 11, 2018), a patent owner can file a request for postponement beginning July 11, 2018. What this means is that all patents having a grant date after July 11, 2015, are subject to this requirement. However, readers should be aware that the procedures for filing such a request are still under discussion.

Some suggested wording that can be used when filing a request for postponement is provided below:

  1. If the product/process of the patent has not been used at all in Indonesia: “The patented product or process needs further development.”
  2. If the product of the patent has been imported or distributed in Indonesia but has not been manufactured domestically: “The patented product has been imported and distributed in Indonesia. However, taking into consideration the value of our product sales so far, the patent owner has not been able to make investment to bring the manufacturing technology into Indonesia.”
  3. If the patent relates to a process or method: “The patent owner does not have the facilities to implement the patented process, and until now, they do not have any cooperation or agreements with any local companies that are interested in using their patented process.”

Unlike the working requirement in India where patent owners and licensees are required to submit Form 27 by the March 31st every year detailing whether a patent was worked in India, there is no requirement under Indonesian Patent Law for patent owners and licensees to provide the Indonesian Patent Office/Ministry of Law with evidence that a patent is being implemented in the country. However, a 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. Therefore, it is important for patent owners to keep track and docket the 36-month deadline for working and timely request postponement of this requirement if necessary.

There are other consequences for not complying with the working requirement as well. According to Article 132, a patent can be revoked for noncompliance with the working requirement. However, only a public prosecutor or “other party that represents national interests” (and no other person) can request revocation if an invention is not worked. Interestingly, it appears that not working an invention will not automatically result in a revocation. Moreover, it seems unlikely that a public prosecutor will bring a revocation action against a patent unless it is against public interest. Nonetheless, it will be interesting to watch the case law develop in this area.

This article was written by Lisa Mueller of Casmir Jones and Indah Handayani of Tilleke & Gibbins. It has also been published on Lisa’s BRICS & Beyond blog.

Related Professionals

Practices

Intellectual Property

Location

RELATED INSIGHTS​ 

July 30, 2025
Artificial intelligence (AI) model training and data scraping are essential processes in the development of modern AI systems. AI model training involves using large datasets to teach machine learning algorithms to recognize patterns, make predictions, or generate new content. Data scraping refers to the automated extraction of information from websites or digital sources, often to assemble the vast datasets required for effective AI training. As these practices become more widespread, questions about the legality of using third-party content—especially copyrighted works—have become increasingly important. In Thailand, the legal landscape for AI developers is shaped primarily by the Copyright Act, which presents unique challenges due to the absence of a fair-use exception. This article examines the copyright-related risks and legal uncertainties facing AI developers under Thailand’s current copyright law and practices, offering strategic guidance for navigating this complex environment. Copyright Risks in AI Scraping and Training Thailand’s Copyright Act does not provide a broad fair use or fair dealing exception, unlike some other jurisdictions, such as the United States. This absence has significant consequences for AI developers: No general defense for AI training: Any use of copyrighted material for AI model training is presumed to be infringing unless a specific, narrow statutory exception applies or explicit permission is obtained from the rights holder. There is no general legal basis for using copyrighted works in AI training without authorization. Increased rights clearance burden: Developers must identify and secure licenses for every copyrighted work included in their training datasets. Given the scale and diversity of data required for effective AI models, this process can be both impractical and costly. Legal ambiguity and litigation risk: The lack of clear statutory guidance or case law leaves developers in a legal gray area. There is no established precedent clarifying whether certain uses of copyrighted material for
Read More
July 25, 2025
Over the first half of 2025, the government of Vietnam has implemented a comprehensive suite of legislative reforms that significantly impact the country’s intellectual property (IP) framework. These amendments, most of which took effect on 1 July 2025, span the criminal, civil, administrative, and judicial sectors, and are part of a broader initiative to modernize Vietnam’s legal infrastructure, strengthen enforcement mechanisms, and harmonize domestic regulations with international standards. A summary of the key legislative changes and their potential implications for IP protection and enforcement across Vietnam is provided below. Criminal Code: Stricter penalties Under the 2025 amendments to Vietnam’s Criminal Code, penalties for offenses involving the manufacturing and trading of counterfeit goods have been significantly escalated. Individuals convicted of such violations now face fines ranging from VND 200 million to VND 2 billion (approximately USD 7,700 to USD 77,000; up from VND 100 million to VND 1 billion). For corporate entities, the penalties are even more severe, with fines ranging from VND 2 billion to VND 40 billion (roughly USD 77,000 to USD 1.54 million; up from VND 1 billion to VND 20 billion). These heightened penalties reflect the government’s intensified efforts to deter counterfeit-related crimes and protect consumer rights. Law on Handling Administrative Violations: Extended statute of limitations and application of electronic procedure The statute of limitations for addressing administrative violations in the IP sector is still two years. However, in cases where such violations are referred by procedural authorities, this period is extended by one year. The time taken by these authorities to process the case is now included within the overall limitation period. In addition, the Law on Handling Administrative Violations facilitates the use of electronic procedures, provided that the necessary infrastructure, technical systems, and information conditions are in place. Specifically, enforcement authorities are now permitted
Read More
July 21, 2025
Distinctiveness is a fundamental requirement for a trademark’s registration and protection under Thai law. The Thai courts typically assess distinctiveness based on a mark’s inherent characteristics rather than its use, as proving acquired distinctiveness through use requires substantial evidence, including the duration of use, extent of distribution and promotional efforts. However, the Intellectual Property and International Trade Court (IP & IT Court) has recently ruled that the figurative mark WEPLAY had acquired distinctiveness through use – an uncommon ruling under Thai trademark law. Subsequently, the Court of Appeal for Specialised Cases affirmed the mark’s inherent distinctiveness based on a holistic assessment of its components. This article discusses the criteria for proving both inherent and acquired distinctiveness, offering examples from both courts to provide valuable insights into case preparation and understanding of how the courts assess distinctiveness. Background In 2017 the plaintiff filed a trademark application for the mark depicted below for goods in Class 28, including toy building blocks: The registrar rejected the application on the grounds of non-distinctiveness under Section 7 of the Trademark Act. The plaintiff appealed to the Board of Trademarks, which considered that, when the term ‘weplay’ is used for goods in Class 28, it is descriptive of the nature of the goods applied for as “playthings”. Therefore, ‘weplay’ was deemed nondistinctive under Section 7, Paragraph 2(2) of the Trademark Act. IP & IT Court decision In 2024 the IP & IT Court ruled that the term ‘weplay’ is not a coined or invented word; instead, it is a combination of ‘we’ and ‘play’, conveying the meaning of ‘we play’. When the term is used for goods in Class 28, it describes the nature of the goods as “playthings”. Consequently, the mark was deemed non-distinctive. However, the court considered the evidence presented by the plaintiff,
Read More
July 14, 2025
Life sciences specialists from Tilleke & Gibbins have updated the firm’s guide to pharmaceutical data exclusivity regulations and practices in Southeast Asia. This guide contains quick-reference information on the availability of data exclusivity protections and limitations in Cambodia, Indonesia, Laos, Malaysia, Myanmar, Thailand, and Vietnam. Developing and launching a new drug on a commercial scale requires an enormous amount of time and investment in research and development (R&D), including pre-clinical testing and clinical trials. When considering the aggregate amount of drug development costs, it is important to recognize that this includes not only the investment in developing new drugs that get approved by a government food and drug regulator and are successfully brought to market, but also the R&D expenditures on a large number of potential pharmaceutical compounds and products that never actually make it to market. In particular, considerable investment is required in order to conduct and produce clinical trial data—to prove safety, efficacy and effectiveness of a new drug—that would warrant marketing approval by the regulatory authority. Such data is proprietary in nature and highly valuable for a research-based pharmaceutical company that develops an original drug. On the other hand, patent law typically confers generic drug manufacturers with the ability to engage in various preparatory activities with a view to obtaining marketing approval for a generic product before the patent for the original drug expires (commonly known as a “Bolar provision”). Since a generic drug maker may submit an application for marketing approval of a generic product before the relevant patent expires, the extent to which the drug originator’s data submitted to the regulatory authority is protected—or in other words, the extent to which the generic company may rely on the drug originator’s previously filed data, which underpins the safety and efficacy of the drug, to support
Read More