New offices & public holidays

Today is our last working day at One Pacific Place - offices that have served us well for more than three years.

We will be closed from 25 July 2014 - 3 August 2014 for Lebaran holidays (the end of the fasting month of Ramadhan).  Government offices, including The Directorate General of Intellectual Property, Ministry of Agriculture, and BPOM will be closed for all or part of this time.  Then on Monday 4 August 2014 we will be fully operational in our new offices at:

Suite 6, 29th Floor

AXA Tower, Kuningan City

Jl. Prof. Dr. Satrio Kav. 18

Kuningan, Jakarta 12940

Tel: +62 21 501 00390 

Fax: +62 21 501 00391

We’re very excited about this move.  Our new offices are located right behind the Directorate General of Intellectual Property, which will allow for fast access.  We’re also occupying a bigger space, which will facilitate the expansion of our growing teams.  Last but not least, Kuningan City is a new super-block development with modern amenities, ensuring we will have a happy and productive staff.

(AXA Tower at Kuningan City)

Karaoke chains busted using pirated music videos

Some of Indonesia’s best-known karaoke chains have been caught using pirated music videos.

According to a Jakarta Globe article (see here), at least five karaoke chains have been caught sourcing music videos from a supplier found to be in the business of collating illegally downloaded material.  Police raided the supplier’s studio and seized computers, laptops, optical discs (DVDs) and documents.  The following companies have been implicated in the case:

• PT Inul Vista Pratama (owner of Inul Vizta);
• PT Diva Head Office  (owner of Diva Family Karaoke);
• PT Charly Family Karaoke (owner of Charly VHT Family Karaoke);
• PT Imperium Happy (owner of Happy Puppy); and
• PT Nav Karaoke (owner of Nav Karaoke Keluarga).

(facade of a Happy Puppy karaoke outlet)

It is alleged that the supplier has been in the business of peddling illegal copies of music videos since 2008, and that his monthly income was around IDR200million (around USD17,353).

The Jakarta Globe story says the supplier will be charged under the criminal provisions of the Copyright Law.  There is no mention of what will happen to the karaoke chains, but we expect they will plead ignorance in response to any criminal allegations - article 72 of the Copyright Law requires that wilful infringement be established, and they will argue the material was legitimately procured (the “I didn’t know” defence).

Apparently a complaint was filed with police after rock band Radja suffered economic losses.  It is claimed that the band was unable to negotiate favourable terms on a recording contract, because one of its songs that had not yet been officially released was already available in karaoke outlets.  This is an interesting twist.  It’s often said that intellectual property protection favours foreign interests, but this is an example of losses suffered by Indonesian individuals.  The more intellectual property becomes a domestic priority, the more we can expect resources will be committed to developing Indonesia's IP infrastructure. 

Economic losses from counterfeiting

An estimate of economic losses from counterfeiting has been released by the Indonesia Anti-counterfeiting Society (“MIAP”) and the University of Indonesia ("UI") School of Economics.

According to a Jakarta Globe article (see here), the MIAP/UI study:

• projects economic losses in 2014 will amount to IDR65.1 trillion (around USD5.63 billion);
• finds that the most counterfeited products in Indonesia are computer software, printer ink cartridges, clothes and leather goods;
• calculates the government will lose IDR424billion (around USD36.74million) in tax revenues; and
• estimates that workers will loose around IDR3.4trillion in wages (around USD294.08million) - presumably because counterfeiters pay lower wages.

There is not yet any mention of the 2014 report on MIAP’s website.  Four years ago when the first version of the report was produced, it was initially made available only to MIAP members - this disappointing move meant that the good work done compiling the report was not maximised with delivery to a wide audience.  Surely distributing a copy to everyone who cares to read one would serve to further MIAP goals (which are articulated on its website) of raising awareness about and combating counterfeiting activity.

We hope to see the full report made publicly available soon.

Indonesia's most valuable brands

A list of Indonesia's 10 most valuable brands has been released by Brand Finance Asia Pacific.

According to Berita Satu, Brand Finance Asia Pacific's Managing Director, Samir Dixit, discussed Indonesia's most valuable brands during a meeting on 18 July 2014 (see here).  According to the Berita Satu (see here), the top 10 are:

1. Sampoerna (US$2,25 billion)
2. Telkom Indonesia ($1,92 billion)
3. Bank Mandiri ($1,66 billion)
4. Gudang Garam ($1,32 billion)
5. Dji Sam Soe ($1,11 billion)
6. Bank Rakyat Indonesia ($893 million)
7. Bank BCA ($857 million)
8. Perusahaan Gas Negara ($803 million)
9. Bank Negara Indonesia ($780 million)
10. Garuda Indonesia ($605 million).

The Jakarta Globe (which is owned by Berita Satu) quotes Samir Dixit as saying that only three companies in the top 10 "place enough focus on their brands" (see here).  He compared the ratio of their brand value compared with their enterprise value, and flagged the following three companies as having demonstrated good performance:

1. Gaurda Indonesia (37 percentage points)
2. Sampoerna (18 percentage points)
3. Gudang Garam (16 percentage points)

62,455 trademark applications were filed in 2012 (see our post here), and based on 2011 data it is expected that around 90% of these were filed by domestic persons/entities.  It is clear that local business appreciates the importance of securing trademark protection, but based on these comments from Brand Finance it appears that more resources need to be committed to commercializing IP assets.

DGIP circular on anti-corruption efforts

A circular on anti-corruption efforts was sent to registered IP Consultants yesterday, by the

Directorate-General of Intellectual Property (“DGIP”).

Galang Aprilian, from the DGIP’s Directorate of Cooperation, distributed the notice by email to 736 registered IP Consultants.  The notice served to:

• remind IP Consultant’s of the DGIP’s goal of building a culture of no tolerance for corrupt practices;
• socialise newly issued Ministerial Regulation No. 15 of 2014 on addressing gratification in the Ministry of Law, which came into force on 10 June 2014; and
• socialise newly issued Ministerial Decision No. MHH.0-1.HM.01.05 (16 June 2014) on the establishment of the Ministry of Law’s anti-gratficiation team.

The regulation makes for interesting reading.  While in the preamble describing a vision of freedom from all forms of corruption, collusion and nepotism it also includes a fairly broad scope of exceptions.  Gifts, vouchers and point rewards that are intended for common use (i.e. not for one specific officer only), and food and beverages are allowed - particularly relevant as we approach Lebaran where it is customary to exchange gifts with colleagues.  Payments to compensate for transport, accommodation and honorariums associated with attendance at seminars/workshops are also allowed, as are gifts at festive occasions (weddings, circumcisions, etc.) with a value of up to IDR1,000,000 (around USD85).

Also noteworthy are provisions requiring officers to report any gratification attempts, and applicable procedures.  If the the Ministry of Law’s anti-gratficiation team is given an appropriate operational budget, it may well turn out to be a force of change.  The KPK (Corruption Eradication Commission) has been praised for its anti-corruption efforts, but at the same time it is understood that the KPK will not address low level corruption, the likes of which has been identified as a problem at the DGIP.

Whatever the terms of this regulation and decision, Indonesia's anti-corruption law, the FCPA and the UK Bribery Act all demand a higher standard. Best to adopt a conservative approach.

Official fees at the DGIP

A revised set of official fees payable at the Directorate-General of Intellectual Property is now in force.

Government regulation No. 45 of 2014 on Non-taxable State Revenue prescribed a new set of official fees effective from 3 July 2014.  Significant changes include:

• increases in official fees;
• increase of number of goods/services included in official fee (IDR1,000,000, around USD85) payable for trademark applications, from 3 to 10;
• change in payment structure for additional goods/services in trademark applications, from IDR50,000 (around USD4.30) per good/service to IDR1,000,000 (around USD85) per each addition of up to 10 goods/services;
• elimination of official fees payable when collecting registration certificates (applies to applications filed on or after 3 July 2014); and
• introduction of official fees for amending application forms and registration certificates.

The DGIP hosted a session to socialize the new fees on 24 June 2014, which our Nidya Kalangie attended.  This was seven working days before the introduction of major changes to prosecution practice, and the general consensus among IP Consultants was that the DGIP should have provided a longer transition period.

E-filing for copyright applications

The Directorate-General of Intellectual Property (“DGIP”) has recently introduced an electronic filing facility for copyright applications.

The new system was socialised by the DGIP Secretary Ir. Razilu on 3 July 2014 (see DGIP blog post here).  The session was attended by our Nidya Kalangie and Hany Wulandari.  The DGIP claims that the new system reduces processing time (for an application for registration of copyright) from nine months to 14 days.

The DGIP Secretary Ir. Razilu was quoted as saying that electronic filing facilities for other intellectual property rights will be made available in the future.  One reason why the DGIP was able to dramatically reduce processing time for copyright applications is because copyright applications are not substantively examined (save for consideration of public order issues).  Trademark applications, for example, are subject to formalities examination, classification and substantive examination - although we can expect a reduction in processing time from the current estimate of 24 months, it will be nothing like the claimed speed with which electronically filed copyright applications are going to be processed.

At this stage the electronic filing facility for copyright applications is available for use by regional IP offices, registered IP consultants and IP centres who have applied for access (it is not yet open to the public).  The system is currently online here,  and a user guide has been made available.