Indonesia: IP Litigation Landscape In Indonesia

Introduction

Reviewing the IP data from 2018-2022, we can see a rise in overall IP cases including trade mark, copyright, patent, and industrial design in the last few years. Trade mark cancellation action still dominates as bad faith registration is still an issue in Indonesia. Unlike in some other countries where trade mark cancellation cases are filed before the Registry, the only remedy to remove the bad faith registration is by way of filing litigation proceedings at the Commercial Court.

The number of IP cases filed did not go down even during the pandemic. In fact, in 2022, there were in total of 146 IP cases filed – which is the highest number in the last 5 years – as the economy bounced back strongly. The lack of being able to be at Court physically during the pandemic pushed the Court to allow online hearings. The Commercial Court has now started to apply the E-Court system for IP Cases since 24 January 2023, which is a great improvement.

IP Litigation Claims by IPR

Trade Mark

Trade mark cases account for over 70% of IP litigation in Indonesia. In recent years, several trade mark cases involving well-known brands and bad faith have been decided at the Commercial Court. Indonesian courts have awarded permanent injunctions and damages where losses have been proven. From recently published trade mark litigation case decisions in 2020 – 2022, awarded damages were over USD 65,000.

While trade mark cancellation cases still form the bulk of the claims, we have observed several infringement claims and appeals against trade mark applications rejected over the year. In 2022, the number of appeals against trade mark office decisions on rejections of trade mark applications increased dramatically to 50 cases, whereas in the prior years it was only on average 5 or 6 cases per year.

Recently we have noticed an increase in dispute claims by Indonesian entities. The local brand owners are taking a more aggressive approach and therefore practical risks of infringement are higher. It is always advisable to review the intended use to ensure no infringement of third party rights.

Patents

Patent infringement cases are still rare. Most patent cases are invalidity actions.

Commercial Court judges are still largely unfamiliar with patent litigation because it is so rare and there is a need to build up a body of jurisprudence. Due to a lack of experience in dealing with patent cases, judges tend to dismiss the case due to procedural issues rather than reviewing the merits of the case. Prospective plaintiffs should also be aware that procedural objections are decided only at the end of the substantive evidence and testimony. This means all the preparation might come to naught if a procedural objection is upheld at the end of the trial. This is unlike other countries where procedural objections are decided summarily during the course of the case.

Creative work, software, and artwork/music are the biggest areas of risk for copyright infringement in Indonesia. With digitization, unauthorized software use has increased, and while the acceptance rate for most copyright cases is low, recent decisions have shown infringement is easier to prove and claim in the software industry. For example, the court in 2022 has awarded compensation of over USD 100,000 for the use of unlicensed software.

Copyright owners are starting to take more action on the use of illegal software. Indonesia is therefore expecting more copyright infringement cases due to the booming digital economy.

In addition to software, recent copyright infringement cases relate to the violation of broadcasting rights, and unauthorized use of songs, and sculptures.

Industrial Designs

Industrial designs are concerned with the visual appearance of articles. The number of industrial design cases remains low. Most of the cases are infringement actions.

In conclusion, litigation cases continue to rise in Indonesia with an increase in infringement action filed by local entities, especially on the trade mark side. IP cases filed in 2023 to date already reach over 50 cases. Given the raid rise in litigation and the increased awareness of IP rights by Indonesian entities, who now see it as a strategic weapon, IP owners are recommended to consider conducting due diligence and/ or clearance searches and absolutely to have a properly considered filing strategy before entering the Indonesian market.