In brief

  • IP protection is being strengthened in Indonesia,
  • A new copyright law is introduced to widen the scope of protection, and
  • A new trademark law will recognise Indonesia’s accession to the Madrid Protocol in 2015.

Summary

On 16 September 2014, Indonesian House of Representatives or Dewan Perwakilan Rakyat agreed to pass a new copyright law (the NewCopyright Law) to amend the present Copyright Law, i.e. Law No. 19 of 2002 (Law 19/2002).

One of the purposes to amend Law 19/2002 is the Government’s effort to emphasize the economic and moral rights of a creator and copyright or neighbouring rights holder. Further, the amendment is also aiming to provide a more comprehensive protection of copyright which will provide better contribution to the Indonesian economic condition. In addition to that, it is also set to further harmonize Indonesian Copyright regulation with the international treaties that Indonesia has ratified.

The Indonesian Government is also planning to amend Law No. 15 of 2001 on Trademark (Law 15/2001). The amendment is expected to be approved in 2015.

The objective of the amendment is, amongst others, to shorten the time frame for new trademark applications and to recognise the accession of Indonesia to the Madrid Protocol.

New copyright legislation

The New Copyright Law in general covers the following significant changes:

Economic and Moral Rights

Unlike Law 19/2002, the New Copyright Law emphasizes that a copyright owned by a creator and/or a copyright holder consist of Economic and Moral Rights.

Economic Rights are described as the exclusive right owned by a creator and a copyright holder to receive economic benefits (i.e. monetary gain) over their work. According to the Copyright Bill, the economic rights of the copyright holder are the rights to (i) publish, (ii) copy in all its form, (iii) translate the work, (iv) adapt, arrange or transform, (v) distribute the work or its copy, (vi) perform its work, (vii) announce, (viii) communicate, and (ix) lease, their copyrighted work. Other people wishing to exercise one of these rights must obtain approval from the creator or the copyright holder.

Further, moral rights are defined as a right conferred and attached to the creator which cannot be eliminated over time, and entitle the holder to: (i) the right to be attributed or not attributed to a work, (ii) the right to use their real name or alias with respect to a work, (iii) the right to alter their work according to social values and morality, (iv) the right to change their work’s title and its content, and (v) the right to preserve the integrity of their work from any alteration, distortion, modification and any actions that may destroy the creator’s dignity or reputation.

With respect to moral rights, the New Copyright Law also provides that moral rights cannot be assigned for as long as the creator is still alive. However, the rights to exercise moral rights can be assigned by will or other courses of action based on the prevailing laws and regulations after the creator passes away.

Assignment of rights over books or other forms of written works, songs or music with or without text

The New Copyright Law also provides new provisions with respect to the assignment of these types of works. When there is an assignment of rights over these types of works through an assignment of rights without time limit, or through flat sold mechanisms, the copyright (in particular the economic rights) will automatically return to the creator within 25 years.

Longer Protection Period

The New Copyright Law provides an extension of protection period for the following types of work (when the creator is a person):

  • Books, pamphlets, and other forms of written papers,
  • Sermons, speeches, lectures, and other similar forms of work,
  • Props for teaching materials,
  • Music and songs with or without text,
  • Drama, musical drama, dance, choreography, puppetry/wayang, and pantomimes,
  • Works of art in the form of paintings, pictures, carvings, calligraphy, sculpture, statues, or collages,
  • Architecture works,
  • Maps, and
  • Batik art or other art motifs.

The New Copyright Law extends this period of copyright protection from lifelong + 50 (fifty) to lifelong + 70 (seventy) years for an individual. For a legal entity, the protection period of the above works remains for 50 years only, as from the work is announced or published for the first time.

National Collective Management Society and Copyright Council

The New Copyright Law introduces the National Collective Management Society (‘Collective Society’). It is created with the purpose of collecting and distributing royalties from the work for the benefit of the creator and copyright or neighbouring rights holder. The Collective Society role is to ensure that the creator and copyright or neighbouring right holder, which are members of the society, gain their economic rights from users of the work.

To establish a Collective Society, the New Copyright Law requires a relevant party to first obtain an operational licence from the Minister of Law and Human Rights, and meet other requirements for establishing the organization.

On the other hand, the New Copyright Law deletes provisions on the Copyright Council as a Government Institution whose duty is to support and provide guidance for all copyrights matters in Indonesia.

This provision on Collective Society will provide clarity to both users of a copyrighted material as well as the creator or copyright or neighbouring rights holders as to the legal standing of a Collective Society that can collect royalties. This may also end debate on the existence or legal standing of the present Collective Society.

Criminal Sanctions

To emphasize the economic rights of the creator and the copyright holder, the New Copyright Law has made changes with respect to the provisions on criminal sanctions for copyrights infringement. The New Copyright Law increases the nominal value of the criminal sanctions while decreasing the period of criminal imprisonment for sanctions in relation to copyright infringement.

Another significant change to the criminal provision is that the New Copyright Law provides that the nature of criminal copyright provision is shifted into complaint-based crime. It means that the creator and copyright holder will now need to file criminal complaints to enforce its rights against any infringements of its rights (this is similar with criminal trademark infringement provisions under the current Trademark Law where criminal action is based on complaint). Consequently, the enforcement authorities can no longer take any criminal action against copyright infringement by any third parties without a complaint from the creator or copyright holder.

Landlord Liability

Another point to note under this Law is that the organizers of commercial premises, i.e. retail stores, shops, traditional markets etc. (Landlord), will have the obligation to prohibit any businesses operating within their premises from selling/distributing and/or copying or duplicating protected copyright works. Failure to comply, which is classified as an act of wilful failure to prevent infringement of copyright materials, will result in the offending party being subject to fines of up to IDR 100 million.

This provision should now provide more clarity on landlord liability, i.e. that Landlord can be held independently liable if it allows illegal copy or distribution of infringing materials. Consequently, a copyright holder can take an independent action against a Landlord if it finds that the Landlord’s premise sells infringing works or is used to a place to duplicate or copy infringing materials, without having to first carry out action against the distributor of the infringing copyrighted materials.

Changes to trade mark law

The amendments to Law 15/2001 will cover the following issues:

Procedure for trademark applications

Law 15/2001 currently provides that, following the filing of a trademark application, all applications must undergo a substantive examination period. Those applications that pass the substantive examination, are then subject to a publication period during which the trademark application can be opposed.

This current procedure will be changed under the proposed draft law to provide that, following the filing of a trademark application, all trademark applications will progress directly to a publication period for 3 months. During the publication period, any third parties who object to a trademark application may file an opposition. Once the publication period ends, the trademark application will be subject to a substantive examination period.

Further, the draft law will shorten the period for the substantive examination from, at present, a maximum of 9 months to a maximum of 6 months in order to reduce the time frame for trademark application filings.

Protection of non-traditional trademarks

The new law will also provide protection for non-traditional marks including 3-D, hologram, sound and smell marks. This will broaden the scope of protection afforded by a registered trademark to include non-traditional marks.

Renewal period

The draft law will include changes as to when a trademark owner can renew its mark registration.

Currently, an owner of a registered trademark can renew its mark registration during the 12 months before the expiration date of its trademark registration until the day the protection period ends. A trademark owner cannot file a renewal application once the protection period ceases.

The draft law provides that the renewal period will start 6 months before the expiration date of a registered trademark and continue for a further 6 months after the expiration date. At the end of the renewal period, a trademark owner will not be able to renew its trademark registration.

Further, for the first six month period, it is expected that there will be no additional fees incurred for renewing a trademark registration except for the usual official fees. However, additional fees may be incurred if a renewal is filed within the second 6 month period.

Provision with respect to the Madrid Protocol

One of the purposes of amending Law 15/2001 is to recognise Indonesia’s accession to the Madrid Protocol which will become effective in 2015.

How these possible changes may impact trademark filing strategy in Indonesia

If these changes are accepted, trademark owners will be expected to:

  • Closely and actively monitor any trademark applications filed for possible trademark applications that may be in conflict to its trademark. Under the current Law 15/2001, the substantive examination conducted by the Trademark Office allows a trademark owner to block any possible registration of a conflicting trademark application that may arise during the substantive examination period. During the initial publication period proposed under the draft law, a trademark owner will need to actively seek out and oppose a potential conflicting trademark application, as the opposition filed will be used by the examiner as a basis to examine the conflicting application (e.g. to determine if there are elements of bad faith or elements of similarity to a well-known trademark). If a trademark owner fails to identify and oppose a potential conflicting trademark application, it may only rely on the examiner's knowledge in examining a trademark application when assessing bad faith or whether or not a potential conflicting trademark application is similar to a well-known trademark.
  • Start identifying any of its non-traditional marks that it wishes to protect in Indonesia.Although the procedure for examining non-traditional marks is still unclear, clients should start identifying its non-traditional marks in order to avoid missing an opportunity for early protection. As Indonesia adopts a first-to-file principle, filing non-traditional marks as early as possible may provide an advantage to the trademark owner by allowing it to block any possible conflicting non-traditional mark applications, as well as to anticipate uncertainty in the examination period.
  • Renew its trademark registrations as early as possible.To avoid additional fees if a renewal application is filed during the second 6 month period, clients should aim to renew its trademark registration within the first 6 month period. For a renewal filed within the second 6 month period, it is unclear how the additional fees will be incurred. However, it is expected that the amount of additional fees will be higher if a renewal application is filed towards the end of the second 6 month period.
  • Monitor how the Indonesian government plans to further regulate trademark applications filed according to the Madrid Protocol.It is expected that a further implementing regulation will be issued with respect to trademark applications filed according to the Madrid Protocol.