Recent developments

On 28 December last year, the Ministry of Law and Human Rights issued a regulation on the procedure for grant of patent compulsory licenses. The regulation is also meant to implement any relevant provisions on patent compulsory licenses under the Patent Law.

What the regulation says

With the enactment of this regulation, a compulsory license may be granted to a third party if:

(1) A patent holder does not implement an obligation to manufacture products or use processes in Indonesia within 36 months from when a patent was granted. (2) A patent has been implemented by a patent holder or its licensee in a form and manner that harm the public interest. (3) A patent that resulted from the development of a previous granted patent cannot be implemented without using the other party's patent that is still valid and under protection.

For those patent products that have not been manufactured or those patent processes that have not been used within 36 months from when the patents concerned were granted, the Minister of Law and Human Rights will notify the patent holders in writing that the 36-month deadline has passed. The notification to the patent holders will be published electronically to the public.

The regulation provides that applicants for a compulsory license can be:

a. individuals or legal entities, for the reasons in points (1) and (2) above b. patent holders, for the reason in point (3) above c. government institutions, for the reasons in points (1), (2) and (3) above

Further, the compulsory license request can be filed manually or through an efiling system, using a standard form that consists of the following information:

a. date, month and year of the request for the compulsory license b. name and address of the applicant c. name and address of a proxy, if the request for the compulsory license is filed through a proxy d. email address of the applicant or the proxy e. patent registration number for which the compulsory license is sought f. title of the invention for which the compulsory license is sought g. name and address of the patent holder h. number of claims protected under the patent i. reason(s) for the compulsory license request j. scope of the compulsory license, for the entire patent or only a part

In general, the following supporting documents need to be submitted when an applicant files a compulsory license request to the Directorate General of Intellectual Property

1. a copy of an ID card or immigration document that is still valid, if the request is filed by an individual 2. a copy of articles of association, if the request is filed by a legal entity 3. a power of attorney, if the request is filed through a proxy 4. a copy of the payment receipt

For an application based on the reason in point (1) above, additional convincing proof is needed that the applicant:

  • has the capability to fully implement the patent on its own
  • has its own facilities to fully implement the patent immediately
  • has taken any necessary steps over a sufficient period of time to obtain a license from the patent holder on the grounds of fair and reasonable terms and conditions, but without any success

For an application based on the reason in point (2) above, the following additional supporting documents are needed:

  • proof that the patent is implemented by the patent holder or its licensee in a form and manner that harm the public interest
  • a statement from the relevant institution

For an application based on the reason in point (3) above, the applicant needs to submit the following additional documents:

  • proof that the applicant owns a patent that cannot be implemented without violating the patent for which the compulsory license is sought
  • proof that the patent that is going to be implemented has an inventive element that is more advanced than the patent for which the compulsory license is sought

The Directorate General of Intellectual Property will carry out a substantive examination of the compulsory license request. The decision can be (a) to grant; (b) to reject; or (c) to delay the compulsory license.

The Directorate General of Intellectual Property's decision to grant the compulsory license request will consist of the following:

a. a statement that the compulsory license is non-exclusive b. the reason for granting the compulsory license c. proof, including statements, as considerations to grant the compulsory license d. the term of the compulsory license e. the consideration that must be paid by the compulsory licensee to the patent holder and the payment arrangement f. the terms and conditions of the termination of the compulsory license g. the scope of the compulsory license, for the entire patent, or only a part h. other things that needed to be stipulated to safeguard the interests of the parties fairly

The regulation also provides that the Minister can grant a compulsory license:

a. to manufacture pharmaceutical products to treat human diseases b. to import pharmaceutical products to treat human diseases as long as the products cannot be produced in Indonesia c. to export pharmaceutical products that are produced in Indonesia to treat human diseases based on requests from any developed or undeveloped countries

The Minister must record the granting of the compulsory license in the Patent General Registry and publish it through electronic or non-electronic media within 30 days after the date of the grant.

The Minister must notify and provide a copy of the decision to grant the compulsory license to the applicant or the patent holder, or the relevant proxy

This regulation is effective from the date of its enactment.

How it affects patent holders

Patent holders are encouraged to immediately review and assess their patent portfolios in Indonesia

Patent holders whose patent products have not been manufactured or whose patent processes have not been used within 36 months from the date they were granted should pay special attention to this regulation. If the patent holders still wish to have protection for those patents and do not want any third party to file compulsory license requests against those patents, the patent holders should immediately submit a request for postponement of implementation of the patents to the Minister. Please refer to our client alert in August 2018 on an MOLHR regulation on implementation of patents by patent holders here.