Up in the top tier

In the Legal 500’s 2015 Asia Pacific rankings, which were released on Wednesday (see here), SKC Law has been recognised as a top tier firm for intellectual property in Indonesia.

We are obviously very pleased with this result, and delighted that our hard work over the past few years has be recognised.  We have been working tirelessly on our professional development and business innovation, and the entire SKC Law team has put in a tremendous effort towards achieving our ambitious goals.

We are deeply indebted to our clients, colleagues and friends, without the help of whom we would not be where we are today.  Thank you!

Moving forward, our mission is to maintain focus on running a sophisticated legal practice, and upholding our reputation for consistently delivery quality, responsive, and client-focused service.

President Jokowi’s ‘Working Cabinet’

Newly inaugurated President Joko Widodo has been busy appointing his ‘Working Cabinet’ - 34 Ministers who will lead government business for the period 2014 - 2019.

The 'Working Cabinet’ has been vetted by Indonesia’s corruption watchdog, the KPK.  The KPK advised the President on a shortlist of 80 candidates for the Ministerial positions, from which 10 names were apparently scratched based on the KPK’s advice.  The KPK will also be briefing members of the Cabinet on good governance and avoidance of corruption, and Ministers will be required to submit personal wealth reports (see here).

Yasona H. Laoly has been appointed as Minister of Law and Human Rights.  It was expected that the post would be filled by a member of the profession (see our post here), but instead the President has chosen a politician.  The Minister will be overseeing an important period for intellectual property law, as Indonesia expects the introduction of a new Trademark Law and the Madrid Protocol, and hopes to see IP laws and regulations issued to patch up holes in the existing framework.

Minister for Technology, Research and Higher Education (Muhammad Nasir) has publicly committed to building research and development capabilities in Indonesia, to support industry (see here).  This will require significant funding, and to make any meaningful impact the government will first need to address the pressing issue of Indonesia’s fuel subsidy, which currently accounts for 15 - 18% of state spending (see here and here) and is burning a hole in the budget.  The President is also aiming for 7% GDP growth, so the ‘Working Cabinet’ certainly has its work cut out!

Interestingly, the position of Attorney-General has not yet been filled (see here) and a Presidential spokesperson has not been appointed - the ever practical President says he’s quite capable of speaking for himself (see here).

(the 'Working Cabinet')

Online infringements and the new Copyright Law

Indonesia’s new Copyright Law (Law No. 28 of 2014) includes provisions dealing with online infringements, but these will not be useful until implementing regulations are passed.

Section 8 of the Copyright Law describes a mechanism for dealing with online infringements.  A person/entity can file a complaint to the Minister of Law, who will then arrange for verification of the report.  The Minister of Law may then forward the matter to the Minister of Communications with a recommendation to block content or a user’s network access.  Article 56(2) states that implementing regulations are required - and in the absence of these, we can expect that complaints will not be processed.

The inclusion of Section 8 in the new law represents progress - another new tool for combating infringement of copyright, and recognition of the need for the law to catch up with technological developments.

Copyright in Logos

The old Copyright Law (Law No. 19 of 2002) specifically recognised logos as works for which copyright protection was available (article 12(1)(f)).  An equivalent provision has been included in the new Copyright Law (Law No. 28 of 2014, at article 40(1)(f)).  But, the new Copyright Law also includes a specific exclusion preventing recordal of copyright in logos (artlcle 65).  So, in effect, copyright in logos is recognised but cannot be recorded in the General Register of Copyrighted Works (note, it is not compulsory to register copyright).

The inclusion of article 65 in the new law is curious.  It’s unclear what legislators were intending to achieve.  It may be that the change anticipates the introduction of plans for better communication between the various IP offices (i.e. checking the General Register of Trademarks before recording copyrighted logos).

Copyright protection for logos will continue to feature in IP prosecution strategies, as well as an issue for enforcement.  Infringers sometimes refer to copyright in logos to defend enforcement actions.

The provisions of the new law will apply from the date it comes into force (article 126), which means applications to record copyright in logos filed before this time should be accepted.

What business thinks about the AEC

A report released by the Boston Consulting Group this week reveals that Indonesian businesses are not excited about the ASEAN Economic Community (“AEC”).

According to a Jakarta Post article on the subject, the Boston Consulting Group surveyed “several hundred” executives and government officials and found:

• 45% of Indonesian respondents saw the AEC as an opportunity, and in contrast 90% of Malaysian and 81% of Singaporean businesses did; and
• 42% of Indonesian respondents saw the AEC as a threat, and in contrast 0% of Malaysian and 2% of Singaporean businesses did.

One explanation offered by the Boston Consulting Group is that this may be because Indonesia is the AEC’s biggest economy, and businesses think that it will be other member countries that will benefit from accessing the Indonesian market.  And they might be right - Indonesia accounts for around 36% of the AEC's combined GDP.

Boston Consulting Group’s report is available here.

The AEC promises freer flowing goods, services and investment between ASEAN nations: Indonesia, Brunei, Malaysia, the Philippines, Singapore, Thailand, Cambodia, Laos, Myanmar, and Vietnam.

Licensing and the new Copyright Law

Indonesia’s new Copyright Law, which is expected to come into force this month (October 2014) includes a claw-back provision that applies to assignments of literary and musical works.

Section 3 of the new law deals with economic rights, and within that section paragraph 3 deals with the assignment of economic rights.  Article 17 confirms that an author has the right to assign all or part of his/her economic rights in a work.  And then article 18 says that for literary and musical works, where the work is assigned without time limitation, copyright will revert to the author after 25 years.

At a DGIP seminar on 16 September 2014, the Director General of Intellectual Property Rights of the Ministry of Justice and Human Rights, Ahmad M.Ramli, explained that the provision was designed to increase the value that authors get from the copyright law.  Whether it has achieved this purpose or not is a moot point.  As it reads, the law takes away an author’s right to assign away unlimited copyright in literary and musical works - authors may therefore receive less compensation for agreeing to the assignment.

The provision will be a serious concern from the perspective of assignees.  Employers, ghost writers, and commissioned song writers should all be very concerned about what this means for them.  The most practical solution could be to contract out of article 18 - specific agreement that the article 18 doesn't apply, or the work is assigned with the intention that it remain so for the full period for which copyright protection is available, or  (e.g. death of author plus 70 years).

Assignees need to be ware of article 19 when receiving assignment of a literary or musical work that is ‘without limitation’.

Replica Bugatti

A workshop in Boyolalai is working on a (very realistic!) wooden replica of a Bugatti Veyron, according to a Jakarta Globe article published this week (see here).  According to the article, the workshop is in the business of producing replica cars from teakwood - this is not a one off - and that the finished products are exported to US, England and Germany.

Bayolalai is a small city located in Central Java, just outside Solo and near the famous Mount Merapi.  The area is known to have a high concentration of woodwork businesses.  Design infringement is a common issue in this region (e.g. furniture designs being reproduced without authorisation) but this is the first we’ve heard of an entire car being copied - design, trademarks and all!  We assume the workshop is neither associated with nor authorised by the Volkswagen Group.

The first lesson here is that ‘you gotta be in it to win it’.  If Volkswagen has not secured registrations of its designs in Indonesia there is little it will be able to do about the design infringement.  A design must be registered in Indonesia before it can be enforced here, so rights holders who choose not to file (to save on prosecution costs) are forfeiting their design rights.

The second point to note is that while the Trademark Office does recognise well-known trademarks, it is not currently possible to enforce a well-known mark.  In short, no registration, no right.

Fair use & the new Copyright Law

With Indonesia’s new Copyright Law set to come into force llater this month (see our post here), it is an opportune time to consider how the new provisions will affect 'fair use' in Indonesia.  Fair use refers to exceptions to copyright protection, designed to facilitate the use of copyrighted material that may be considered acceptable but otherwise technically infringing copyright laws.  For example, purchasing a downloaded song on an iPad and copying it to an iPhone where both devices belong to the same owner.

The new Indonesian Copyright Law incorporates four significant fair use exceptions:

1. article 44d: the reproduction and distribution of copyrighted content through IT and communications media where such use is non-commercial in nature;
2. article 46(a): making 1 copy of a computer program for backup or research and development purposes;
3. article 47: making 1 copy of any type of work for personal use; and
4. article 50: temporary copies of works made by digital media.

These broad exceptions for non-commercial and personal use are evidence of a more progressive approach to copyright protection in Indonesia.  Whereas there was a massive disconnect between the provisions of the current Copyright Law and how Indonesians actually deal with copyrighted material, the new law closes this gap.  This makes the law a more relevant legal instrument, and one that is more likely to be respected and observed.

Fair use exceptions are also included in the copyright laws of other countries.  For example, the equivalent provision in US Copyright Law (17 U.S.C. § 107):

... the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include: 

- the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

- the nature of the copyrighted work;

- the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

- the effect of the use upon the potential market for or value of the copyrighted work. 

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

The new Indonesian Copyright Law also includes the familiar exceptions for education, news reporting, and government institutions provided the author of the work is properly disclosed.