Despite of constant growing yearly, the number of patent application filing with the Indonesian IP Office (DGIP) is still considered low if compared to other countries.

Official statistic for 2015 is given below.

Foreign applications still represent major portion of total record. This fact is in accordance with the Government’s statement that currently 58% of innovations were still coming from foreign entities.

Such low figure of patent application is in part related to activity of Research and Development among domestic research institutes, universities or industries.

Among the patented inventions by domestic R&D institutions (more particularly universities and government-owned institutes), some significant portion thereof ended with public domain and were not pursued further through commercialization.

The majority of technologies currently developed by the domestic societies are still of low to mid-level or petty patents.

Basically Indonesia has potential resources to support and boost the patenting activities in Indonesia through enhancement of R&D. Currently, there are 3,246 institutions at the level of higher education (consisting of 122 state affiliated- and 3,124 private-institutions of varied categories like universities, institutes, polytechnics and colleges).

There are at least 470 research institutions widespread in higher education, ministries and non-ministries, and some others operated by private sector, whose coverage includes public works, environment, chemistry, pharmaceutical, biomolecular and biotechnology, oil & gas, mining, energies, electricity, microelectronic and semi-conductor, forestry, agriculture, fisheries, nuclear, aerospace, geospatial, oceanology, among others.

In addition to huge state companies in the field of oil, gas, mining and telecom, there are several state-owned strategic industries for naval/marine shipbuilding in Surabaya; aerospace, weapon/military vehicle, and vaccine in Bandung; also railway in Madiun.

With around 250-million population and GDP of US$ 858 billion in 2015, Indonesia now still maintains positive growth on GDP (4.8% in 2015 and expectedly 4.9% in 2016), also still an interesting target for foreign investors in view of its position as largest economy and largest territory (1.9 million square kilometers) in ASEAN.

Nevertheless, as the Govt. identifies (Dr. Dimyati, 2016), R&D activities in Indonesia (more specifically those under governmental supervision) still facing the following limitations:

  1. Quality of human resources for R&D.
  2. Infrastructures and equipments for R&D.
  3. Low budgeting for R&D (at least if compared to other countries). Currently R&D expenditure in Indonesia is only 0.2% of Gross Domestic Product.
  4. R&D-related Regulations, which are still not in favor of Researchers/Inventors in terms of recognition of their ownership, remuneration and royalty schemes, particularly in the employment case, for securing after-retirement period.
  5. “Link & match” between Researchers/Inventors and Industries still relatively low, causing low output of patent commercialization.

Accordingly, the challenges for Indonesia now would likely to include (i) how to set relevant regulations properly that would give more benefits to Researchers/Inventors to move and speed up the R&Ds; (ii) how to attract more registered IP Attorneys in managing innovations and inventions (patenting) at the universities, R&Ds and industries; and (iii) how to increase the chance or possibility for industries to utilize or cooperate with researchers/inventors within commercialization contracts.

The amended patent law (took effect since 26 August 2016) has brought new hope for patenting activities by domestic inventors. Several provisions on the new patent law provide distinct incentives for domestic inventors to enhance their productivity.

Such incentives include, among others:

  • new protection added for “process” (in addition to “product”) under petty patent (utility model).
  • government employee’s inventor is able to be included as patent holder, and in certain case can cooperate with third party in a commercialization scheme.

In addition, for those inventors working as government employees or universities, currently the Govt is about preparing to launch new regulation which makes them possible to:

  1. get annuity payments for year 1st to 5th waived-off
  2. get annuity payments for year 6th until expiration reduced by 90%
  3. get filing cost of new application reduced by 50%

We all do hope that the above incentives would increase domestic inventions and, in turn, would be triggering enhancement of patent filing to international phase (PCT) or direct filing to foreign countries.

Written by:

Kusno Hadi Kuncoro

Partner, Registered IP Attorney
at Batavia Patentservis Asia


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