Improvement Needed

New US Chamber IP Index report highlights negative effect of new Patent Law

By Karmila Bain
Friday, March 10, 2017

The US Chamber of Commerce has released its fifth annual International IP Index, The Roots of Innovation. The report is an open-minded view of the state of the global intellectual property landscape, giving insight into how 45 countries operate in the intellectual property (IP) environment to create and attract investment, stimulate economic growth and advance technology and innovation.

In the report, Indonesia ranks 39th out of 45 countries surveyed during 2016, dropping from 33 out of 38 countries in 2015, and its score decreasing from 28.6 percent (8.59 out of 30) in 2015 to 27.5 percent (9.64 out of 35).

Indonesia’s score is far below the median index score of 15.39 and the regional average of 17.64, placing it a long way behind neighbors Vietnam, the Philippines, Brunei, Malaysia and Singapore, the only Asian country in the top 10. 

Indonesia’s falling score reflects its weak performance under new indicators added to this edition of the report, relating to patents, trademarks, trade secrets and market access, enforcement and international treaties. The new Patent Law was cited as a major negative factor.

In compiling the report, the US Chamber’s Global Intellectual Property Center (GIPC) ranked the countries on an Index based on six categories and 35 indicators ranking the robustness of IP environments. Policy makers use the statistics to evaluate the strength of an economy’s IP regulations.

The previous edition reflected progress in Indonesia’s IP Index in 2015 by tackling online piracy through blocking and taking down 22 infringing websites that harmed the local film industry, as requested by the Association of Indonesia Film Producers. Both physical and online copyright piracy remained the highest challenge to rights holders, particularly with software piracy in Indonesia ranking as one of the highest in the world.

Indonesia’s IP Index 2016

There are two significant focuses on Indonesia’s IP index 2016: the new Patent Law, and the new Trademark and Geographic Indication Law.

According to the Index, the new Patent Law fundamentally weakens Indonesia’s national IP environment. Although it aims to strengthen the innovation infrastructure and encourage more high-tech economic development through creation and use of legal technologies, overall it does not improve an already challenging patenting environment.

The Patent Law contains heightened efficacy requirements targeting biopharmaceutical products and outlaws second use claims. It also introduces parallel importation targeting biopharmaceuticals.

The report noted that the law creates uncertainty about the extent of basic protection for biopharmaceutical products in Indonesia, including an ill-defined requirement for technology transfer for all patented technology and processes in Indonesia.

On the other hand, the new Trademark and Geographic Indication Law provides significant strength for Indonesia’s IP environment, improving the speed and administration of trademark applications and strengthening existing enforcement mechanisms.

What’s next?

Although the Patent Law has had a significant negative impact on Indonesia’s IP index score, the nation still has the opportunity for an even better IP environment. More protection of life science intellectual property is needed in order to catch up with Indonesia’s higher-ranking regional neighbors. It requires advanced enforcement to fight the high level of piracy and protect the copyright environment and be more active in the participation of international treaties

More Stories

Global IP Index 2017 launch

Protecting Intellectual Property Rights

Deepening Engagement on Intellectual Property

Usage of the AmCham Indonesia website states your compliance of our Terms of Use