Guidance: IP enforcement in Indonesia

1. Introduction

IP enforcement remains a business concern in Indonesia. The inadequacy of IP enforcement information and resulting lack of transparency is a barrier for foreign investors. This Manual on IP enforcement in Indonesia has been developed for businesses operating in or planning to expand into Indonesia. It aims to provide foreign businesses with a picture of how the IP enforcement system works in Indonesia. It includes details of the laws and regulations as well as the IP enforcement procedures in Indonesia. It uses a definition of enforcement that parallels the World Trade Organisation’s Trade Related Aspects of Intellectual Property (TRIPS) Agreement.

This means it focuses on trade mark and copyright enforcement procedures – which in common parlance means trade mark counterfeiting and copyright piracy. The types of enforcement systems used to deal with these two issues are most commonly criminal, administrative, including Customs, as well as the civil courts. Other forms of IP exist (e.g. patents, designs) but their enforcement is more usually limited to or appropriate for civil court systems only.

The Manual is up to date as of 30 April 2020. The Manual is for informational purposes only so users of this Manual should take local legal advice on specific IP cases.

2. Overview of Indonesia’s legal and IP system

Businesses including foreign investors need to engage with legal systems for many reasons. It is especially challenging for foreign businesses to engage with complex, unfamiliar foreign legal systems. Therefore, simpler judicial procedures, efficient enforcement systems and clear and effective legal remedies are needed. The protection of IP is a particularly challenging and technical area. It usually requires a blend of civil court remedies (e.g. to claim damages), criminal procedures (e.g. to stop counterfeiting), and administrative remedies (e.g. Customs IP border protection systems).

IP must be recognized and protected first. This usually means registering trade marks, designs, and patents at the government IP office or providing protection for unregistered rights like copyrights and trade secrets under international treaties. Indonesia has relatively well-established systems to do this. But mere registration of IP is not a business goal. What matters is how businesses can make use of their IP commercially, and whether a country provides a system for IP protection and enforcement and how effective that is.

IP enforcement systems are a subset of a country’s legal system. It is therefore necessary for foreign businesses to understand the strength and independence of a country’s legal system before looking at how well the IP enforcement procedures operate.

Indonesia’s legal system draws on traditional/customary/adat law, Islamic law (sharia) and Dutch colonial law (a constitutional system) and then, post-independence, additional laws were laid on top of these. This created a complex plural legal system. Since then several reforms have been undertaken to improve the quality of the legal system. It is an ongoing challenge for the government to upgrade the legal system.

Indonesia is a civil law country based on a Constitution. This means Parliament makes all the laws; there is no common law. Government and Ministries can make regulations and there are subsidiary rules below that. The Supreme Court is the highest court above the high courts and then the district courts. There are a number of specialist courts such as the Commercial Courts that hear Bankruptcy and IP cases. Indonesian courts use a non-adversarial system with Judges having a proactive role in cases.

Lawyers or Advocates can be engaged to handle legal issues and the legal profession is governed by the Advocates Law and the bar association called the Perhimpunan Advokat Indonesia (PERADI)

Indonesia like many developing countries faces various challenges with its legal system. The World Justice Project Rule of Law Index 2020 ranks Indonesia 59/128. The areas it identifies most in terms of legal weakness in Indonesia include the Civil Justice system, Criminal Justice system and Corruption. The Ease of Doing Business index by the World Bank Group ranks Indonesia 73/190 with legal issues being one of the biggest challenges. Transparency International placed Indonesia at a rank of 85/180 countries in its Corruption Perceptions Index for 2019. It noted in the Report that despite a very slight improvement in Indonesia’s score, it continues to struggle to tackle corruption. It reported corruption in all branches of government – including IP and the legal system.

IP system

IP is a technical area of law. While many general lawyers do practice IP law, in many countries there is a separate IP profession. In Indonesia, IP Consultants are lawyers who advise on and register IP. Indonesian Intellectual Property Association is the IP law profession’s industry association in Indonesia.

IP systems can be broken into three components:

• registration and protection system. This refers to the registration system operated by the Directorate General of Intellectual Property (DGIP), a department at the Ministry of Law & Human Rights. At DGIP one can register trade marks, designs and patents and there is also a voluntary Copyright recordal system. DGIP also has various policy functions
• commercialisation of IP. This typically means IP contracts such as licenses, assignments, and other commercial agreement involving IP
• enforcement through the civil and criminal courts and administrative routes

DGIP’s role is generally to manage the registration systems, but they also have an enforcement function. However, it has a limited role with the courts.

In addition to the technical nature of IP, issues that arise in IP registration and protection, deployment of IP assets through contracts as well as the enforcement of IP make it a complex area for the novice. Typically, specialist external IP attorneys assist businesses in all aspects. Many larger corporations have specialist in house IP attorneys.

In recent years, Indonesia’s IP system has undergone a number of improvements. The amendment of the IP laws is the major reason for this. IP is governed by individual laws which cover Trade marks, Designs, Patents, Copyright, Trade Secrets and so on.

The EU Commission’s Report on the protection and enforcement of IP rights in third countries 2020 cites Indonesia as a Priority 2 country, due to concerns in the area of IP protection and enforcement such as high levels of trade mark counterfeiting and copyright piracy, lack of customs IP protection, weak civil court enforcement systems and a lack of dedicated criminal IP enforcement units. Indonesia remains on the US Government’s Priority Watch List under the 2020 USTR Special 301 Report. The main concerns regarding Indonesia’s IP regime (trade mark and copyright) were:

• lack of effective IP protection and enforcement including insufficient enforcement coordination amongst agencies
• widespread copyright piracy and trade mark counterfeiting
• lack of coordination in IP enforcement efforts
• insufficient deterrent-level penalties for IP infringement in physical and online markets

Most counterfeits are imported from China into Indonesia but there is a large proportion of locally made counterfeits. Research in Indonesia commissioned by a local anti-counterfeiting group MIAP (Indonesian Society against Counterfeiting) to LPEM University of Indonesia in 2014, reported the impact of IP infringement in Indonesia as Indonesian Rupiah (Rp)65.09tn (US$5bn), especially in five industries including fashion, culinary, pharmacy, cosmetics, and software.

IP Laws and Regulations – WTO TRIPS Compliance

The WTO’s agreement on TRIPS has been in force since 1995 and is a comprehensive multilateral agreement on IP. The TRIPS Agreement introduced global minimum standards for protecting and enforcing nearly all forms of IP rights. The Agreement requires all WTO members, with few exceptions, to adapt their laws to the minimum standards of IP rights protection. In addition, the TRIPS Agreement also introduced detailed obligations for enforcement of IP rights.

Indonesia signed the TRIPS in 1996, and 4 years later in 2000 most, but not all its IP laws were amended to comply with the WTO TRIPS Agreement. As remaining gaps were exposed, further legal amendments were proposed, and between 2014 and 2018 further law changes were made. These changes were reflected in Indonesia’s improved score in the US Chamber International IP Index from 9.64 in 2017 to 12.87 in 2019 and 15.12 in 2020, ranking 46th on the US Chamber’s International IP Index.

A number of bilateral negotiations include further proposed IP reforms. Negotiations for an EU-Indonesia free trade agreement were launched in July 2016 which includes an extensive IP chapter.

The Regional Comprehensive Economic Partnership (RCEP) which all ASEAN members will advocate further IP reforms. The ASEAN IP Rights Action Plan 2016-2025 sets out the regional grouping’s own IP harmonisation plans and includes a specific chapter in IP enforcement.

IP enforcement reform

IP laws in Indonesia have all been amended in the last decade. The government acknowledged the weaknesses in the criminal IP enforcement system in 2011, when it completed the establishment of a second IP investigation and enforcement route, establishing the IP Office’s PPNS team (the Civil Service Investigation Office) as an alternative to the police. The PPNS team is intended to be a more user-friendly alternative than the police for criminal complaints. It is possible for IP owners to contact them directly for IP enforcement, without detailed knowledge of legal procedures. Civil Court cases are increasingly common for IP disputes, with over 50 per year occurring. A new Customs system was established in 2018 to enable border interception of counterfeit and pirated goods, although this is not open to foreign IP owners without a subsidiary in Indonesia.

3. IP Enforcement Manual

3.1 The IP Enforcement System and the WTO TRIPS Regime

Indonesia is a civil law country therefore, written laws set out all the rules and procedures for IP enforcement. As a WTO TRIPS member, Indonesia commits to providing enforcement measures. These comprise:

• civil remedies, including judicial procedures, evidence rules, injunctions, damages, other remedies, information to rights holder and right of indemnification to defendants, as well as provisional measures (preliminary injunctions and search and seizure orders);
• criminal remedies, at least for wilful trade mark counterfeiting or copyright piracy on a commercial scale
• suspension of release by customs authorities

3.2 Trade Mark and Copyright Protection

Trade marks must be registered at the Directorate General of Intellectual Property (DGIP) to be protected, under Law No. 20 of 2016 (Trade Mark Law). There is no protection for unregistered trade marks. Under the Madrid Protocol, Indonesia accepts trade mark applications under the international registration system.

Copyright protects a wide range of creative works under the Copyright Law No. 28 of 2014 (Copyright Law). It confers the exclusive economic right to conduct and control those activities in relation to the author or owner’s works as well as moral rights. Copyright is protected upon creation of the copyright work. There is a voluntary recordal system for certain copyrights at DGIP, but this confers no legal advantage for enforcement. It may assist practically to have all the copyright data already approved and the copyright data in local bahasa language.

3.3 Criminal IP Enforcement

Trade mark and copyright infringements are ‘complaint-based’ crimes. This means the IP owner must file a formal complaint with the police before any action can be taken. IP crimes are brought to the criminal courts either by filing a police complaint; or by filing a complaint through the IP Office’s investigation team PPNS. In both cases they can summon, investigate, and secure evidence (and in the police’s case arrest); however, in each case, a file must be passed to the Prosecutor who then takes over and decides whether to prosecute in the criminal courts.

3.3.1 Criminal acts defined in the Trade Mark Law

Trade mark infringement occurs when an infringer does any of the acts defined in Article 100 and 102 of the Trade Mark Law. These broadly cover applying an infringing trade mark and selling goods under an infringing trade mark.

• Article 100 (1): unlawful use of trade marks, identical (similar in its entirety) to registered trade marks of other parties for goods of the same kind
• Article 100 (2): unlawful use of trade marks, similar (in principal) to registered trade marks of other parties for goods of the same kind
• Article 100 (3): an infringer whose goods could threaten human health, the environment, and/or cause death in humans
• Article 102: trading in goods which are known to be or reasonably suspected to be counterfeit goods

3.3.2 Criminal procedure for Trade Mark infringement

Article 103 states that criminal offences in Article 100 to Article 102 constitute complaint-based offences. Trade mark owners are required to file a complaint before any action is taken against the infringement. Criminal trade mark cases may be filed with the Police or DGIP’s Civil Service Investigation Office (PPNS). Trade mark owners also have the option to use alternate dispute resolution mechanism such as mediation, negotiation as well as conciliation before decide to proceed to the prosecution phase.

3.3.2.1 Police and the PPNS

Article 1 (1) and Article 6 of the Criminal Procedure Code defines an Investigator as an official of the National Police or the PPNS, who by law are granted special authority to conduct an investigation.

Article 99 empowers the investigating officers of National Police and the PPNS to investigate criminal offences for trade mark infringement. The investigators have authority to:

• conduct examination on the accuracy of the report or information in relation to the criminal acts;
• conduct examination to any person allegedly committing criminal acts;
• request information and evidence from any person in relation to criminal acts;
  conduct examination on bookkeeping, records, and other documents in relation to criminal acts;
• search and conduct examination in places allegedly having evidence, bookkeeping, records, and other documents in relation to the criminal acts;
• confiscate infringing materials and goods as evidence in criminal acts;
  request expert statements in the implementation of their duties to investigate the criminal acts;
• request assistance from relevant institutions to arrest, detent, set a wanted list, and prevent the perpetrator from doing the criminal act; and
• dismiss investigation if there is no sufficient evidence for conviction of the criminal acts in the field of Trade marks

The PPNS must notify the commencement of investigations to the public prosecutor with a copy to the investigator officers of the National Police. The results of investigation carried out by the PPNS are forwarded to the public prosecutor through the investigating officers of the National Police.

3.3.2.2 Criminal prosecution of Trade Mark crimes

The Criminal Procedure Code outlines the duties of the investigator which includes:

• preparing a report on the implementation of measures as intended in article
• the investigator shall hand over the dossier of the case to the public prosecutor

The handing over of the dossier may have several stages. At the first stage the investigator delivers the case dossier to the public prosecutor. If the public prosecutor considers it complete, the investigator transfers responsibility of the suspect and evidence materials to the public prosecutor to file the case in the court. In some cases, the dossier is incomplete so is returned for more investigations. After completion it is to be returned to the public prosecutor to decide whether the dossier has met requirements for transfer to the court.

The criminal procedure for trade mark infringement has been described by in Annex 1A of this Chapter.

3.3.2.3 Criminal penalties for Trade Mark infringement

The criminal court judge may order the following penalties. In practice judges may award penalties lower than this in most cases.

• under Article 100 (1) any person who unlawfully uses trade marks that are identical (similar in its entirety) to registered trade marks of other parties for goods of the same kind shall be sentenced to imprisonment of up to five years and/or fine up to Rp2,000,000,000
• under Article 100 (2) any person who unlawfully uses trade marks of similar nature (in principal) to registered trade marks of other parties for goods of the same kind shall be sentenced to imprisonment for up to four years and/or fine up to Rp2,000,000,000
• under Article 100(3) an infringer per Article 100 (1) and (2) whose goods could threaten human health, the environment, and/or cause death in humans shall be sentenced to imprisonment for a maximum period of ten years and/or a fine of a maximum amount of Rp5,000,000,000
• under Article 102 any person trading in goods which are known to be or reasonably suspected to be counterfeit goods shall be sentenced to imprisonment for a maximum period of one year or a fine of a maximum amount of Rp200,000,000

3.3.2.4 Defences to Trade Mark infringement

Indonesia’s Trade Mark Law contains no specific defences. The closest to a defence would be under Article 102, where trading in counterfeit goods requires the prosecutor to prove that the trader knew or reasonably suspected the goods were counterfeit.

3.3.3 Criminal acts defined in the Copyright Law

Criminal offenses for copyright or related rights infringement are laid down under Article 112 to 120 of the Copyright Act. These are separated into differently defined categories of infringing criminal acts.

3.3.3.1 Rights management information and technological circumvention

Article 112 contains two unlawful acts in relation to rights management information and technological circumvention measures for commercial use:

• unlawfully removing, changing or damaging copyright management information and copyright electronic information (defined under Article 7(3)) that are owned by the Author and/or
• damaging, destroying, eliminating, or disabling the function of technological protection measures (defined in article 52) used as a safeguard for the works or related rights products

3.3.3.2 Economic rights infringement

The Copyright Law sets out different criminal offences for each of the different economic rights. Article 113 (1) sets out one criminal offence in relation to the economic rights of the author or the copyright holder:

• the right to rental.

Article 113 (2) sets our 4 criminal offences in relation to the economic rights of the author or the copyright holder:

• translation
• adaptation, arrangement, or transformation
• performance
• communication

Article 113 (3) sets our 4 criminal offences in relation to the Economic Rights of the Author or the Copyright holder:

• publication
• reproduction
• distribution
• publication

Article 113 (4) sets out an aggravated infringement offence of intentional piracy.

3.3.3.3 Landlord liability – Sale of copyright infringing goods on landlord premises

Article 114 provides a criminal offence for those managing business premises where the owner deliberately and knowingly allows the sale and/or duplication of goods resulting into infringement of copyright and/or related rights in the premises that they manage (as set out in Article 10).

3.3.3.4 Infringement of publicity/advertising rights

Article 115 provides that where persons are portrayed in publicity/advertising images (as set out in Article 12), the commercial use, reproduction, publication, distribution or communication of their image rights for the purposes of advertising or publication in electronics and non-electronic media is an offence.

3.3.3.5 Infringement of Performers rights

Article 116 sets out criminal offences in relation to the economic rights of performers for commercial use:

• Article 116 (1) prohibits unauthorised rental to the public of fixations of performances [(defined in Article 23(2)(e)}
• Article 116 (2) prohibits unauthorised broadcasting or communication of performances, fixation of unfixed performances, or making available of the fixation of performances to the public [defined in Article 23(2) (a) (b) and (f)]
• Article 116 (3) prohibits unauthorised reproduction or fixation of performances [defined in Article 23(2) (c) and (d)]
• Article 116(4) provides an aggravated infringement offence of intentional piracy

3.3.3.6 Infringement of phonogram/sound recording rights of Producers

Article 117 sets out criminal offences in relation to the economic rights of producers of phonogram/sound recordings for commercial use.

• Article 117 (1) prohibits unauthorised rental of phonograms [defined in Article 24(2)(c)]
• Article 117 (2) prohibits unauthorised reproduction, distribution and making available by wire or wireless to the public [defined in Article 24(2) (a) (b) and (d)]
• Article 117(3) provides an aggravated infringement offence of intentional piracy

3.3.3.7 Infringement of Broadcast rights

Article 118 sets out criminal offences in relation to the economic rights of broadcasters.

• Article 118 (1) prohibits unauthorised rebroadcasting, communication, fixation or reproduction of a broadcast [defined in Article 25(2) (a) (b) (c) and (d)]
• Article 118 (2) provides an aggravated infringement offence of intentional piracy

3.3.3.8 Collective Management Organization (CMO) offences

Under Article 119 any unlicensed CMO [(defined in Article 88 (3)] seeking to collect royalties commits an offence.

3.3.4 Criminal procedure for copyright crimes

Article 120 states that criminal offences in Article 112 to Article 119 constitute complaint-based offences. Copyright owners are required to file a complaint before any action is taken against the infringement.

Criminal copyright cases may be filed with the Police or PPNS (at the IP owner’s choice). The copyrights owners are obligated to use alternate dispute resolution mechanism such as mediation, negotiation as well as conciliation. They can only proceed to the prosecution phase provided that the alternate dispute resolution mechanism failed.

3.3.5 Police and PPNS

Article 1 (1) and Article 6 of the Criminal Procedure Code defines an investigator as an official of the National Police or the PPNS, who by law are granted special authority to conduct an investigation.

Article 110 of the Copyright Law empowers the investigating officers of National Police and/or the PPNS to investigate criminal offences for copyright infringement. The investigators have authority to conduct:

• verification of the accuracy of the reports or information in relation to criminal offenses
• examination of persons or legal entities allegedly committing criminal offenses
• soliciting information and evidence from persons or legal entities in relation to criminal offenses;
  examination of books, records and other documents relating to criminal offenses.
• searching and examination of premises that are alleged contain evidence, bookkeeping, records and other documents relating to criminal offenses
• confiscation and/or termination of circulation upon the permission of the court of materials and goods resulting from the offenses that may be used as evidence in a criminal case in the field of copyright and related rights in accordance with the Code of Criminal Procedure
• request expert depositions in performing the tasks of criminal investigations.
• request for assistance from relevant institutions to arrests, detent, set a wanted list, prevent and deter against perpetrators of criminal offenses; and
• termination of the investigation if there is no sufficient evidence of criminal activity

The PPNS must notify the commencement of investigation to the public prosecutor with a copy to the investigating officers of the National Police. The results of investigation carried out by the PPNS are forwarded to the public prosecutor through the investigating officers of the National Police.

Note: Article 95(4) requires mediation prior to criminal copyright action, with an exception in cases of Piracy.

3.3.6 Criminal Prosecution of copyright crimes

Criminal prosecution for copyright is the same as trade marks – please refer to section 3.3.1.2 above.

*The criminal procedure copyright infringement has been described in Annex 1B of this Chapter.

3.3.7 Criminal Penalties for copyright infringement

The criminal court judge may order the following penalties. In practice judges may award penalties lower than this in most cases.

• Article 112: Any person who unlawfully causes removal of copyrights management information and/or technological circumvention offences shall be sentenced to imprisonment for up to two years and/or a fine up to Rp300,000,000
• Article 113 economic offences vary depending on the type of offence:
• rental offences in Article 113 (1): A person shall be sentenced to imprisonment for up to one year and/or a fine up to Rp100,000,000
• translation, adaptation, arrangement, or transformation, performance or communication offences in Article 113 (2): A person shall be sentenced to imprisonment for up to three years and/or a fine up to Rp500,000,000
• publication, reproduction, distribution or publication offences in Article 113 (3): A person shall be sentenced to imprisonment for up to four years and/or a fine up to Rp1,000,000,000
• piracy offences in Article 113 (4): A person shall be sentenced to imprisonment for up to ten years and/or a fine up to Rp4,000,000,000
• Article 114 on Landlord offences: A person shall be sentenced to a fine up to Rp100,000,000
• Article 115 on Publicity/advertising rights offences: A person shall be sentenced to a fine up to Rp500,000,000
• Article 116 Performers rights offences vary depending on the type of offence:
  • rental offences in Article 116 (1): A person shall be sentenced to imprisonment for up to one year and/or a fine up to Rp100,000,000
  • Broadcasting or Communication and fixation or making available offences in Article 116 (2): A person shall be sentenced to imprisonment for up to three years and/or a fine up to Rp500,000,000
  • unauthorised reproduction or fixation offences in Article 116 (3): A person shall be sentenced to imprisonment for up to four years and/or a fine up to Rp1,000,000,000.
  • piracy offences in Article 116 (4): A person shall be sentenced to imprisonment for up to ten years and/or a fine up to Rp4,000,000,000
• Article 117 Sound recording rights offences vary depending on the type of offence:
  • rental offences in Article 117 (1): A person shall be sentenced to imprisonment for up to one year and/or a fine up to Rp100,000,000
  • unauthorised reproduction, distribution and making available offences in Article 117 (2): A person shall be sentenced to imprisonment for up to four years and/or a fine up to Rp1,000,000,000.
  • Piracy offences in Article 117 (3): A person shall be sentenced to imprisonment for up to ten years and/or a fine up to Rp4,000,000,000
• Article 118 Broadcast offences vary depending on the type of offence:
  • unauthorised rebroadcasting, communication, fixation or reproduction offences in Article 118 (1): A person shall be sentenced to imprisonment for up to four years and/or a fine up to Rp1,000,000,000
  • piracy offences in Article 118 (2): A person shall be sentenced to imprisonment for up to ten years and/or a fine up to Rp4,000,000,000
• Article 119 on CMO offences: A person shall be sentenced to imprisonment for up to four years and/or a fine up to Rp1,000,000,000

3.3.8 Defences/exceptions: acts not considered as copyright infringement Under Article 43 ‘acts’ that are not considered as copyright infringement include:

• publication, distribution, communication, and/or reproduction of state emblems and national anthem in accordance with their original nature;
• publication, distribution, communication, and/or reproduction executed by or on behalf of the government in certain circumstances;
• taking of actual news, either in whole or in part from a news agency, broadcaster, newspaper or other similar sources provided that the source is fully cited;
• production and distribution of copyrighted content through information technology and communication media for non-commercial use which either provides a benefit to the Author or he expresses no objection
• reproduction, publication, and/or distribution of portraits of the president, vice president, former presidents, former vice presidents, national heroes, heads of state institutions, heads of ministries/non-ministerial government agencies, and/or the heads of regions taking into account the dignity and appropriateness thereof

The EU Commission Report for Indonesia reports that Indonesia does not have a dedicated IP crime unit, trained, and equipped to deal with online copyright infringements, in particular, illegal cam- cording and live streaming piracy.

3.4 Civil IP Enforcement

Indonesia has a three-tiered civil court system, District Courts at the first level (located in each city/regency), High Court at the appellate level (located in each province), and the Supreme Court (located in Jakarta). IP civil disputes such as trade mark and copyright are under the jurisdiction of Commercial Courts. A Commercial Court which is a special chamber at the first instance level handles matters concerning bankruptcies, bank liquidations and IP.

Currently there are five (5) Commercial Courts in Indonesia, with legal jurisdictions according to President Decree No. 97 of 1999 as follows:

• Central Jakarta covering Jakarta Special Region, West Java, Lampung, South Sumatera, West Kalimantan
• Surabaya covering East Java, South Kalimantan, Central Kalimantan, East Kalimantan, Bali, West Nusa Tenggara, East Nusa Tenggara
• Semarang covering Central Java and Yogyakarta Special Region
• Medan covering North Sumatera, Riau, West Sumatera, Bengkulu, Jambi, Aceh Special Region
• Makassar (f.k.a. Ujung Pandang) covering South Sulawesi, Southeast Sulawesi, Central Sulawesi, North Sulawesi, Maluku, Irian Jaya

IP infringement lawsuits addressed to the Chief Justice of the Commercial Court are heard in the jurisdiction where the defendant resides or is domiciled, except in a case where one of the parties resides outside Indonesia, then the lawsuit is addressed to the Chief Justice of the Commercial Court of Central Jakarta.

3.4.1 Trade Mark and Copyright Civil Case Rules

The Trade Mark Law and Copyright Law both set out the procedures to file a civil lawsuit in the commercial court. They cover matters such as how to file a case, the timetable, deadlines, decision structure and the appeal procedures.

The Civil Procedure Law also applies to cases in the Commercial Courts. The Trade Mark and Copyright Laws are termed ‘special laws’ so have priority, but where they are silent on an issue, provisions of the Civil Procedure Law apply.

Therefore, Civil cases in Indonesia are governed by three group of rules:

• the law under which the case is filed

• the Trade Mark Law or the Copyright Law

• the Rules of court as provided under the Civil Procedure Law
• there are Supreme Court regulations which cover certain detailed rules relating to trade mark and copyright cases.

3.4.2 Trade Mark infringement

3.4.2.1 Registered Trade Mark infringement

Article 83(1) entitles the registered trade mark owner to file a lawsuit with the Commercial Court against anyone who unlawfully uses a trade mark that is similar to or identical for similar kinds of goods and/or services and request a:

• claim for damages; and/or
• cessation of all acts related to the use of trade mark, including production, distribution, and/or trade in the goods and/or services which use the said Mark without the right thereto.

4.2.2 Well known Trade Mark infringement

In Article 83(2) a special additional right is given to file a lawsuit to the owner of an unregistered well-known trade mark based on a court decision.

3.4.3 Copyright infringement

Copyright disputes can be filed in the commercial court by authors, related rights owners, authors and heirs. The basis for copyright civil court cases includes:

• infringement of copyright and related rights
• cases of Piracy
• cancellation of copyrights recoded with DGIP
• moral rights violations

Note that cases may also be resolved by arbitration or alternative dispute resolution. All cases must undergo a mediation opportunity during the case.

Article 96 of the Copyright Law entitles a copyright owner to claim damages in the event of loss of Economic Rights of the Author, Copyright holder and/or Related rights holder.

3.4.4 Civil IP remedies in Trade Mark and copyright cases

This section covers specific IP remedies required by the TRIPs agreement. It is beyond the scope of this IP enforcement manual to cover every kind of civil law procedure that might be possible in an IP case.

3.4.5 Injunctions and preliminary injunctions

The Trade Mark Law contains two 2 provisions. First, under Article 83(1) (b) the trade mark owner plaintiff can request cessation of all infringing acts. Second, under Article 84 the trade mark owner an seek an injunction to prevent further loss, cease all production, distribution, and/or trade of the goods and/or services of that Mark unlawfully.

The Copyright Law contains 2 provisions. First, under Article 99 (3), a copyrights/related rights holder may request for an interlocutory injunction to cease copyright infringing activities. Second, Article 106 provides for an injunction to prevent further loss to prohibit the act of infringement.

Supreme Court Regulation No. 5 of 2012 on Provisional Decisions set out rules for Preliminary Injunctions and these were adopted into the Copyright Law in 2014 and Trade Mark Law in 2016. Detailed procedures on filing a request, submitting evidence of IP ownership, details of the infringement, details of the IP owner are provided. The case is assigned to a Judge and should be heard within 4 days (2 days for Head of Commercial Court to assign case to judge, 2 days for assigned judge to decide). There is confidentiality in these proceedings up to the time the provisional decision is issued. Failure to comply with a Provisional Decision can be a criminal offence. After the provisional decision is executed there are inter partes hearings at which the evidence is taken and testimony is heard, then the judge may either confirm the provisional decision or revoke it. This must be completed within 30 days.

3.4.6 Damages

Both the Trade Mark Law and Copyright Law contain provisions entitling the winning parties to damages.

The Trade Mark Law contains no detailed rules on calculation or payment of damages.

The Copyright Law contains several references to damages. It defines damages as arising from economic loss. Payments must be made within 6 months of the court decision. In some cases, it can comprise the income from infringement.

Commentary: Both the Trade Mark and Copyright Law provide for final relief in the form of damages. Principles for calculating damages are not well established and the outcome of damages claims are uncertain, with some divergence in different courts’ calculations. In a few cases large damages have been awarded, while the same level of preparation might result in minimal award in another case. In civil litigation, each party effectively bears its own legal costs.

3.4.7 Other remedies

This refers to two remedies, one being disposal of infringing goods outside the channels of commerce and another being the seizure of tools and materials to create infringing goods.

The Trade Mark Law Article 84 (2) provides that a judge may order that the surrender of infringing goods or the value of the goods.

Under Article 99 (3) of the Copyright Law, a copyright owner can request a decision to seize infringing works and tools to produce them.

3.4.8 Right of Information

This refers to judicial orders, that the infringer disclose the identity of third persons involved in the production and distribution of infringing goods. No specific provisions in the Trade Mark Law or Copyright Law exist.

3.4.9 Indemnification of Defendant

This refer to protecting defendants from abuse by excessively aggressive Plaintiffs.

The Trade Mark Law and Copyright Law provide the right to damages and right to claim over the bond furnished by the plaintiff in the event that the interlocutory injunction is discharged following inter parte hearing. This is a covered in Article 109(5) of the Copyright Law and Article 97(5) of the Trade Mark Law.

3.4.10 Provisional measures

Preliminary injunctions are described in section 3.4.4 above. However other provisional orders can be made.

Under Article 94 of the Trade Mark Law, a trade mark owner may request a judge of the Commercial Court to issue a provisional decision to:

• prevent alleged import of infringing goods entering the market;
• seize evidence relevant to the trade mark infringement;
• secure and prevent the loss of evidence by infringer; and/or
• prohibit the act of infringement to prevent greater damages

Under Article 106 of the Copyright Law, a copyright owner can request a provisional decision to

• prevent alleged import of copyright infringing goods entering the market;
• seize evidence relevant to the copyright infringement;
• secure and prevent the loss of evidence by infringer; and/or
• prohibit the act of infringement to prevent greater damages

Supreme Court Regulation No. 5 of 2012 on Provisional Decisions set out rules for Preliminary Injunctions and these were adopted into the Copyright Law in 2014 and Trade Mark Law in 2016. Detailed procedures on filing a request, submitting evidence of IP ownership, details of the infringement, details of the IP owner are provided. The case is assigned to a Judge and should be heard within 2 days. There is confidentiality in these proceedings up to the time the provisional decision is issued. Failure to comply with a Provisional Decision can be a criminal offence. After the provisional decision is executed there are inter partes hearings at which the evidence and testimony is heard then the judge may either confirm the provisional decision or revoke it. This must be completed within 30 days.

3.5 Digital IP Infringement of Trade Marks and Copyrights

Indonesia seeks to transform itself into a digital economy. Online e-commerce is a huge part of the digital economy. Online sales are booming. Digital IP infringement is therefore now a business concern. This means both sale of counterfeit trade marked goods (e.g. apparel, household products, foods and medicines) and pirate copyrighted goods (e.g. music, software, films).

This section sets out the possible violations that relate to traders online, as well as online intermediaries at a civil or criminal level. This manual uses the term ISP to denote digital businesses such as e-commerce platforms, social media platforms and digital content providers that provide copyright works and trade marked goods. It doesn’t apply to internet access providers and other internet companies.

3.5.1 Trade Mark violations

The Trade Marks Law contains no specific provisions on e-commerce digital infringement. Cases over online trade mark infringements follow regimes established under the Trade Law (Law No. 7 of 2014) and Electronic Information and Transactions (EIT) Law, (Law No. 11 of 2008) both of which regulate online commerce and infringement through the following:

• Ministry of Communications and Informatics Circular 5 of 2016 under the EIT Law
• Ministry of Trade regulation 80 of 2019 under the Trade Law

The Indonesian government is working on new regulations that are hoped to unify or more clearly regulate these two different systems.

3.5.2 Copyright violations

The Copyright Law has a narrow remedy for online copyright infringements only. This is a ‘no-fault’ type site/content blocking system under Articles 55-56 of the Copyright Law. This provides a system for blocking of access to infringing internet content by the Ministry of Communication and Informatics (KOMINFO). It is further regulated by a Joint Regulation of the Ministry of Law and Human Rights and Ministry of Communication and Informatics No. 14 of 2015 / No. 26 of 2015. Complaints must be reported to the Ministry of Law and Human Rights through the DGIP. With sufficient evidence, the DGIP may recommend KOMINFO to block access to the infringing content. Pursuant to DGIP’s recommendations, KOMINFO may block such content that infringes Copyrights and/or Related Rights in the electronic system or render the electronic system services inaccessible.

In addition, the regimes established under the Trade Law and EIT Law apply, both of which regulate online commerce and infringement through the following:

• Ministry of Communications and Informatics Circular 5 of 2016 under the EIT Law
• Ministry of Trade regulation 80 of 2019 under the Trade Law

The Indonesian government is working on new regulations that are hoped to unify or more clearly regulate these two different systems and link the Copyright law remedy.

3.6 IP Enforcement by Customs Authorities at the Border

Indonesia has established two mechanisms for IP enforcement by Customs Authorities at the border, judicial and ex-officio (recordal and seizure system).

The recordal and seizure system for IP infringements at the borders is the main one IP owners prefer to use. Government Regulation No. 20 of 2017 controls imports/exports of goods resulting from IP infringement. It implements Law No. 17 of 2006 (Amending Law No. 10 of 1995 on Customs). The Ministry of Finance then passed the Implementing Regulation No. 40 of 2018 on Recordation, Detention, Guarantee, Temporary Suspension, Monitoring and Evaluation for Controlling Import and Export of Goods Suspected of IP Infringement (‘Regulation’), to set out the procedures for customs recordal and seizures for border enforcement of IP rights (trade marks and copyright only) in Indonesia.

3.6.1 Suspension of Goods and Suspension Order

Customs Authority has the right to suspend the release of imported or exported goods suspected of infringing copyright and trade mark. Customs will then notify the IP owner/holder of such suspension, the IP owner/holder will need to send confirmation of its decision to either apply to Commercial Court within two days for a suspension order or other legal action to Customs. Article 10 of the Regulation also provides for ‘Restraint’ of goods of imported or exported suspected infringing goods.

The IPR owner or its proxy must provide to Customs a bank or insurance guarantee (as an Operational Cost Guarantee) of IDR100M (approx. USD7200) which is valid for 60 days. The application to the Commercial Court must be made in the jurisdiction of the port where the goods were seized.

3.6.2 Examination of suspended goods

After receiving the suspension order, Customs will detain the goods for ten working days. The IP owner/holder and/or its representative must send request for examination schedule to Customs to examine the detained goods which will be attended by all related parties, including the Examiner. The request must be submitted at maximum two working days after Customs received the detention order. If more time is required, the IP owner/holder can apply to for extension of detention to Commercial Court for a maximum of ten business days.

3.6.3 Legal action/settlement

After the ten working days detention period, should the goods be proven to infringe IP and there be no settlement, the IP owner/holder can take further legal action which could means either civil or criminal action or settlement.

*The Recordal process for trade marks and/or copyright has been described in Annex 2 of this chapter.

3.7 Administrative IP Enforcement

Indonesia does not use administrative remedies. Trade mark and copyright infringement is either criminal or civil.

3.8 Other Enforcement Issues

3.8.1 Alternate Dispute Resolution

Article 93 of the Trade Mark Law allows civil trade mark infringement disputes to be settled through an arbitration or an alternative dispute resolution. This is defined in the Elucidation to the Trade Mark Law as negotiation, mediation, conciliation, and other means selected by the parties.

Article 95 of the Copyrights Law allows dispute settlement through alternative dispute resolution, arbitration or courts. In addition, where the parties are in Indonesia settlement of disputes through mediation is allowed.

3.8.2 Warning letters and settlements

Many IP disputes are resolved by issuing a warning letter, and the IP owner and the alleged infringer resolve the dispute. Settlement Agreements and Undertakings can be used to reach a resolution.

Commentary: Given the enforcement challenges in Indonesia, self-help remedies are commonly used. Warning letters should be considered as good option, especially when the infringer is a legitimate business. These can be expanded into entire programs against large scale infringement. Negotiation and settlement of IP infringement cases by IP lawyers is a common strategy.

4. Annex 1A: Process for criminal Procedure for trade marks Indonesia

Stage 1

a. Rights holder file complaint and request for criminal action with police/PPNS or attempt to resolve via alternative dispute resolution
b. Police/PPN will conduct an investigation will decided whether to proceed with criminal raid action depending on evidence

Stage 2

a. After criminal raid action, Police/PPNS to conduct post raid investigation to gather more evidence and decide whether to proceed with prosecution

Stage 3

a. Prosecution to file bill of indictment
b. Court trial process
c. Judgement/court decision

5. Annex 1B: Criminal Procedure for copyright in Indonesia

Stage 1

a. Rights holder file complaint with police/PPNS and proceed to alternative dispute resolution.
b. If alternative dispute resolution fails, police/PPN to conduct investigation and decide whether to proceed with criminal raid action depending on evidence

Stage 2

a. After criminal raid action, Police/PPNS to conduct post raid investigation to gather more evidence and decide whether to proceed with prosecution

Stage 3

a. Prosecution to file bill of indictment
b. Court trial process
c. Judgement/court decision

6. Annex 2: Customs recordation process Indonesia

Stage 1

a. IP owner to submit application for recordation to customs
b. Customs review the application
i. Application may be returned if not complete
ii. Application may be rejected due to lack of consistency of data in application
iii. Application approved

Stage 2

a. If application is approved
i. Recordation of IP in the customs recordation system
ii. Customs suspend the release of suspected goods and notify IP owners
iii. IP owner responds
b. If goods are suspended
i. IP owner can choose to file request to court for a suspension order
ii. Customs will detain goods for 10 working days
iii. IP owner to send request to customs to examination of goods
iiii. If goods are confirmed as non-infringing after examination, there will be no further action

Stage 3

a. If goods are confirmed as infringing goods after examination
i. There may be a settlement reached
ii. IP owner can pursue legal action

7. Annex 3: Contact details of IP enforcement bodies Indonesia

Directorate General of Intellectual Property (DGIP)

Directorate General of Customs and Excise