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Monday, June 12, 2017

Patent working in Indonesia

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The Directorate of Intellectual Property (“DGIP”) is going to issue a Regulation on patent implementation, regulating Article 20 of the Law No. 13 of 2016 concerning Patent.  This controversial article, replicated in patent laws here since 1991 provides that the patent holder must manufacture the product or use the patented process in Indonesia. The new article provides that such manufacture, or use of a process, shall support technology transfer, attract investment and/or provide employment. It was originally intended to drive foreign investment and perhaps also prevent pharma companies blocking local pharma product production.

DGIP Patent Director Mr Timbul Sinaga stated that the Presidential Regulation will include the formation of a team that decides or will give recommendations to requests by patent holders as to whether they should manufacture the product in Indonesia immediately or may delay doing so.  Mr Sinaga also mentioned that some countries had relayed their responses and opposition to the provision - some of them from the pharmaceutical sector. According to Mr Sinaga, the pharmaceutical sector prefers to import products that they do not have manufacturing facilities for in Indonesia. But Mr Sinaga further elaborated that patent exclusive rights are considered to be one of the reasons why patented medicines have high prices. Sinaga stated that manufacturing the product in Indonesia might help to lower the prices.

A Director of the International Pharmaceutical Manufacturer Group (IPMG) Parulian Simanjuntak stated that the consumption of patented drugs in Indonesia is not always high. Therefore forcing manufacture in Indonesia might not be economically viable. profitable. He points out that the government sees technology transfer only in the narrow definition of a manufacturing facility. He suggested the government pays more attention to the development of wider patented technology concepts, particularly second-use products or products registered from existing inventions.

The worry over this provision has existed for decades, but the government may be taking steps closer to implementing it. At present it is not clear what the sanction for non working is, but presumably the government intends that it be that others can use the invention without infringement, possibly through compulsory licensing. Whether that is viable too is not at all clear.  

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