PATENT BY THE GOVERNMENT

President Regulation No. 77 Year 2020 (“PR 77/2020”) was enacted on 07 July 2020 which is the implementing regulation of the Patent Law No. 13/2016 specially Articles 109-120, to stipulate the Procedures of the patent which is exercised by the Government.

Three (3) kinds of Patent which can or must be exercised by the Government

The patented product owned by patent holder, is exercised by the Government on the following reasons:

(i)   Due to national defense and security; or

(ii)  Due to urgent public needs; and

(iii) Patent which disturbs or, is violating State defense and security.

- Implementation of the patent on the grounds of (i) or (ii) above can be exercised by the Government itself or by appointing another party if the Government cannot exercise by itself.

While the patent (iii) above must only be exercised by the Government and without possibility of appointing another party; if the Government cannot or not yet intend to exercise such patent, in that case, the patent may only be exercised by the patent holder but with the approval from the Government.

Patent (i) above includes among others weapon, ammunition, military explosive, tapping,  and surveillance.

Patent (ii) above includes among others expensive pharmaceutical products, chemical and/or biotechnology products for agriculture, animal medicine for pest control and/or animal disease.

Patent (iii) above includes among other electromagnetic weapon and explosive.

- If a third party is appointed by the Government to implement the patent (i) or (ii) above, such third party must fulfill the following criteria: (a) it has adequate facilities and capacity to implement the patent; (b) it will not assign/transfer the patent to other parties; and (c) it posses a good producing/manufacturing methods, distribution and monitoring/supervision practices in accordance with the regulations.

The Exclusive Rights of the Patent Holder

- The patent holder is a party which has registered its invention/patent in Indonesia as patent holder. 

Being a patent holder, it has the exclusive rights which are the right to exclude others from making, using, selling, or importing the invention (in case of product patent) and/or the right to exclude others from using the certain method/process  to produce the invention (in case of process patent).

- The exercise of kind of patent (i) above by the Government will cause the patent holder can no longer exercise its exclusive rights.

The exercise of kind of patent (ii) above by the Government will not restrict the exclusive rights of patent holder.

The patent (iii) above which can only be exercised by the Government does not specifically stipulate on the exclusive rights of the patent holder. However, being it can only be exercised by the Government, the patent holder presumably does not have such kind of exclusive rights.

Compensation to the Patent Holder for the patent which is exercised by the Government

-  Compensation shall be given to the patent holder for the exercise of all kinds of patent (i), (ii) and (iii) above by the Government.

- Objection to the amount of compensation, if any, must be submitted by filing a lawsuit through the Commercial Court (Pengadilan Niaga) within 90 days as of the date of Presidential Regulation. Notwithstanding of this lawsuit however, the Government’s entitlement to exercise the patent will not be stopped.

Procedures

Before the kinds of patent (i) and (ii) above can be exercised by the Government:

-  Approval from the Minister of Law and Human Rights (MOLHR) is required.

- After receiving the application from the relevant Government’s Ministry/Agency requesting an approval, the MOLHR must inform the patent holder within 5 days as of the approval of MOLHR.

- MOLHR must establish a team (including Minister of Finance and expert staff) to determine compensation to the patent holder within 90 days as of the team is formed and the team must give its recommendation of compensation to MOLHR for MOLHR approval.

-   After compensation approval, MOLHR will present it to the President within 15 days as of the approval.

-   The President will formalize the MOLHR’s approval in the form of Presidential Regulation.

-   MOLHR will give a copy of the Presidential Regulation to the patent holder.

- MOLHR will record and announce this Patent Exercise by the Government in the patent official publication/gazette.

Annual Patent Fee

Holder of the kinds of Patent (i) and (iii) above are exempted from paying the annual patent fees.

Holder of patent (ii) is still required to pay annual patent fee.

 

Disclaimer: This article is intended as general information only and it does not constitute a legal advice. We accept no responsibility for any loss that may arise from reliance on this information. Please contact us if you need full legal advice.