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Indonesia’s Economic and Business Insights – An IP Strategy


By Dipl.-Ing. Rohaldy Muluk
The following information will give you an insight that will support your decision whether you should register or file your Intellectual Properties (IPs), such as patent, trademark, industrial design or copyright, in Indonesia. Registering or filing an IP is a strategic decision. Therefore, we use some strategic approaches to help us to take a decision about where and why we should register an IP in which country. Economic & Business Prospects and Market Potential are main approaches that will help us to decide. Other approaches are Potential of IP Infringements in a country, and Cost – Benefit analysis of “no-register” or “no-file” in a specific country like Indonesia. Indonesia with 240 million populations, 50% of them under 29 years of age, is the 4th biggest populous country in the world with three time zones and therefore one of the world biggest potential markets. Let’s see Indonesia’s economic and business indicators. Indonesia’s Economic and Business Prospects according to McKinsey Global Survey 2009, there are “Five Forces” that will reshape the global economy. If we match it to Indonesia’s economic and business indicators, we will see that Indonesia’s economic and business is prospective.

1. Indonesia’s Growth
Standard Chartered Global Research: Growth 7.1 – 7.6% during 2011-2014 periods, currently one of the highest in the world; GDP nominal per capita will be quadruple by 2020; it reaches Korea level by 2016, Japan level by 2024.

2. Indonesia’s Productivity and Talent Management
Position 44 on Global Competitiveness Index 2010 (Brazil 58, Russia 63, India 51, China 27). Indonesia’s government expenses 20% of its total expenses for education.

3. Indonesia’s Global Flow of Goods, Information & Capital
Geographically, Indonesia is very strategic since Indonesia lies between Indian and Pacific Ocean, and along Malacca Straits. Over half of all international shipping goes through Indonesian waters. According to Boston Consulting Group, Indonesia will double their internet users by 2015. Indonesia’s mobile-phone users are 66% of its 240 million populations, and Indonesia has the best prospects (of the three markets, China, India and Indonesia) for organic growth in telecommunications revenue. According to IMF ranking, Indonesia’s GDP was on position 18 (2010), projected to be on pos. 11 in 2014 , while Indonesia’s external debt to GDP ratio was 28.1% by the end of 2010, and is the lowest in ASEAN countries and much lower than most developed countries in the world.

4. Indonesia’s Natural Resources
Indonesia has abundance of natural resources, e.g. 40% of world geothermal resources, the world’s 3rd largest exporter of natural gas, the world’s 2nd largest exporter of thermal coal, cocoa, tin, and the world’s largest palm oil exporter etc. Lying on the equator, Indonesia is a home of biodiversity.

5. Indonesia’s Role of Government:
Indonesia is one of ASEAN founders, and the only member from ASEAN countries in G-20.
Indonesia is member in Free Trade Areas, such as ASEAN Free Trade Area (AFTA), ASEAN-China FTA (2010) and ASEAN Economic Community (2015). Other ASEAN Free Trade Areas where Indonesia involved are with Australia-New Zealand, with India, with South Korea, and with Japan. As the biggest country in ASEAN, Indonesia has the role as an entry market country to those FTAs. ASEAN – China Free Trade Area (ACFTA)
ACFTA is so far the biggest Free Trade Area in the world. It has a combined nominal GDP approximately USD 6 trillion (2008) and has the 3rd biggest trade volume after EU and NAFTA. China had overtaken the position of USA as the 3rd biggest trade partner after Japan and EU since joining ACFTA. ASEAN Economic Community (AEC) AEC is more than just a Free Trade Area. It will be one of the world biggest single markets and production bases. Indonesia is the biggest country market in AEC that will launch in 2015. Population: 600 million GDP (PPP) 2010: USD 3.084 trillion GDP (PPP) per capita 2010: USD 5,131
Market Potential According to Market Potential Index (MPI) 2010 of University of Michigan, Indonesia is

• One of the highest Potential Market in the world emerging market (overall Rank 12, ASEAN countries Rank 2)
• The biggest Market Size in ASEAN (the 5th world emerging market)
• The highest Market Growth Rate in ASEAN (the 4th world emerging market)
• The 2nd highest Market Consumption Capacity in the world emerging market and ASEAN countries, better than Brazil, Russia, India & China
• Commercial Infrastructure on rank 20 in the world emerging market, better than China and India
Cost-Benefits analysis of No-Register and No-File of IPs
Indonesia’s counterfeiting index (GTRIX-e) is the lowest in East Asia (except Singapore and Japan). It means Indonesia is surrounded by exporting countries of counterfeit products, and more being a market of counterfeit products. A study by the University of Indonesia and the Indonesian Anti-Counterfeiting Society (2010) reported that Indonesia is awash with counterfeit products, mostly from China. Therefore, IP protection in Indonesia, as the next biggest potential market to China, is as important as IP protection in China. Furthermore, no-registration/no-filing of IPs in Indonesia risks that those IPs are going to be used, or even registered/filed, by others. Since IP registration/filing in Indonesia is relatively much cheaper than losses in turn over/market share, or losses due to blocked access to the market, it’s advisable to register/file IPs in Indonesia, even though still no business has done yet.
(Dipl.-Ing. Rohaldy Muluk is IP Attorney at ChapterOne-IP, Jakarta, Indonesia)

Think global in registering your trademark

By Dipl.-Ing. Rohaldy Muluk
An Intellectual Property (IP) right is an exclusive right for you, as IP owner, to exclude others from getting economic benefits of your Intellectual Properties (IPs). IPs are patent, trademark, industrial design, copyright etc. IP laws, such as patent law or trademark law, are territorial laws. It means the protection of your IP is only valid in a certain territory where you registered or filed your IP. For example, if you register your trademark in Germany only, you only have a protection for your trademark in Germany as well. 

As a common practice, if you plan to market or to produce your products in a certain country, you would have to register your trademarks in that country. But, actually there are many aspects to consider “where” and “why” you should register your trademark in a certain country. The decision where to register a trademark and other IPs should be part of company’s global strategic business plan. However, the strategic approaches for IP matters more complex than marketing and production matters only.

In our “connected” world, any decision of IP matters will give global impacts to your business. If you wish to do business internationally, you should think global from the beginning. Nowadays, a small company in the US could sell its products world-wide. If you build-up a brand that represents your product quality or technology or services, you have to protect your brand at any markets you are producing or marketing your product. But, it’s not yet enough. You also should consider to protect your brand in your future potential market, or where infringement possible is, or where someone else could take advantage of your brand or technology, etc.

We will take real examples. You have produced TV sets in China and registered a trademark “BestVision” in the country. After a while, your business in China is flourishing. Then you want to expand your business to South East Asia. You chose to enter Indonesian market, got a distributor, promoted your product in media and began to sell TV set “BestVision”. After a while your distributor got a warning letter from a lawyer to stop the sale of your product with a reason that your brand infringed a trademark called “BestVision” that has registered by another person on Indonesian Trademark Office before. Other example, your distributor registered your brand for himself, not for you, and without your knowledge, on their Trademark Office. After you broke up your business relation with the distributor, your ex distributor imported the similar TV sets from China without any brand, and then stamped the label “BestVision”. Both examples do not infringe any trademark law.

Typical mistakes relating to Trademarks
We summarize some typical mistakes of trademark owners that could harm your business:
• Your brands took part in an exhibition abroad. Domestic or foreign visitors of your exhibition could register your trademarks in their home country if they see your brands have business prospects and economic values.
• You export your products to a foreign country without registering your trademark in that country. Your buyer or distributor in that country could register your trademark under their own name.
• You outsource the production of your products in a country, and for that purpose you register your trademarks in that country only. The manufacturer or others could produce and export or sell your products without labeling the products with your brands (counterfeit products).
• At the beginning of your business you concentrate on a certain market and register the trademark in that market only. Somebody else could register your trademark and use your trademark as his own brand in other country, so that you later can’t enter the country’s market.
Registering of a trademark is very cheap in compare to losses in turn over, losses in market share or illegal abuse of a trademark.
(Dipl.-Ing. Rohaldy Muluk is IP Attorney at ChapterOne-IP, Jakarta, Indonesia)

Patentübersetzung ist entscheidend!

Wir möchten Sie hiermit auf ein der wichtigsten Punkte bei einer Patentanmeldung im Ausland aufmerksam machen, nämlich die Patentübersetzungen.
Bei einer Patentanmeldung im Ausland wird das anzumeldete Patent auf Zielsprache (Landessprache) übersetzt. Im Fall Indonesien, ein Patent muss erstmal auf englisch übersetzt werden, dann von englisch wird es auf indonesisch (Zielsprache) übersetzt. Das englische Original wird als Anlage zu der indonesischen Fassung angefügt und zusammen zum Patentamt abgegeben.

Ein idealer Übersetzungsprozess eines Patents besteht aus zwei Phasen. Erstens, eine wörtliche Übersetzung einer Patentspezifikation. Zweitens, ein Nachlesen, um Übersetzungsfehler zu finden und gleichzeitig ein Korrigierungsprozess der übersetzten Texte durchzuführen. Die zweite Phase nennt man auch als ein Proofreading.

Die Genauigkeit einer Patentübersetzung, besonders für claims (Ansprüche), ist für die Qualität eines Patents sehr bedeutend, und ist sogar sehr entscheidend im Falle eines Patentstreits. Weiterhin, die Genauigkeit einer Patentübersetzung hängt nicht nur von der technischen Übersetzungsfertigkeit eines Übersetzers, aber besonders von dem technischen Verständnis eines Proofreaders ab.

Ein Proofreader sollte technische Kenntnisse des zu übersetzten Patents besitzen, um das Patent technisch zu verstehen. Deshalb, bei einer Patentübersetzung im Ausland sollte der/die Proofreader idealerweise derjeniger/diejenige Patentanwalt/-anwältin sein, der/die für die Patentanmeldung zuständig ist, oder zumindest ein Verantwortlicher für eine Patentanmeldung mit genügenden technischen Kenntnissen im jeweiligen technischen Bereich eines Patents.

Ein anderes wichtigeres Problem bei einer Patentübersetzung im Ausland ist, dass es einem Zweifel entsteht, ob es überhaupt ein Proofreading dürchgeführt wurde. Bei vielen Patentübersetzungsfällen, wegen fehlender technischen Kenntnisse, wurde kein Proofreading dürchgeführt. Manche Patente wurden nur wörtlich übersetzt, ohne Rücksicht auf die technischen Sinne.

Mit einem Artikel auf japanischem Intellectual Property Management Magazin (Chizai Kanri)*) haben wir japanische Firmen, mit einem realen Beispiel, auf diesem Thema aufmerksam gemacht. Vor kurzem, im Auftrag einer japanischen Firma, haben wir ihre eigene in Indonesien angemeldete Patente nachgeprüft, das sogenannte Translation audit. Das Ergebnis: alle Stichproben, die wir untersucht haben, waren fehlerbehaftet. Besonders auffällig waren die Übersetzungsfehler infolge mangelnder technischen Kenntnisse.

Oben genannte Fehler waren typisch bei einer Patentanmeldung, wo der/die zuständige IP Attorney keinen technischen Ausbildungshintergrund gehabt hat und/oder der Übersetzungsprozess auf dem Übersetzer selbst überlassen.

In Indonesien, nur zwischen 5 – 10% von 500ter IP Attorneys, die die universitäre technische Ausbildung haben, und diejenige mit einer Arbeitserfahrung im technischen Bereich sind noch viel weniger.

*) Muluk, Rohaldy;日本企業のインドネシア特許戦略― これでいいのか?, Intellectual Property Management (Chizai Kanri) Magazin vol. 62 No. 1 (No.733), Japan (2012), ein Magazin von Japan Intellectual Property Association (JIPA).
(Dipl.-Ing. Rohaldy Muluk, Patentanwalt und Partner bei Patentawaltskanzlei ChapterOne-IP)

Why Indonesia?

Why do filing IP in Indonesia?

The protection of Intellectual Property (IP) Rights in Indonesia is more important than ever, since Indonesia, as the only ASEAN G-20 member, has a key position in ASEAN countries, not only due to its biggest market and economic potential in the region, but also its position as an entry country-market to ASEAN Free Trade Areas with China and India, ASEAN Economic Community, and other regional and bilateral economic pacts.

Indonesia in Figures1)


240 million

Market Size

5th World EM (1st ASEAN)

Market Growth

4th World EM (1st ASEAN)

Market Potential

12nd World EM (2nd ASEAN)

Consumption Capacity

10th World EM (2nd ASEAN), higher than Brazil, India and China

Counterfeiting Index2)

0.50952, one of the lowest in East Asia (after Japan and Singapore)

Protection of Intellectual Properties is part of long-term business strategies, that makes IP protection in Indonesia as important as targeting a new market in a company’s business plan.

Indonesia is surrounding by countries with higher Counterfeiting Index, therefore protection of Intellectual Property Rights becomes more inevitable for doing business in the region.

With around 7% economic growth, Indonesia is like an oasis in current global economic condition. It makes the ongoing and future business competition in Indonesian market stronger than ever. Hence, IP protections in Indonesia could be used as one of business tools in order to survive in doing business in Asia.

For further IP strategies in Indonesia and in Asia please contact us.


1)Market Potential Index (MPI) for Emerging Markets (EM) 2010 of University of Michigan.
2)Counterfeiting Index (GTRIC-e), according to OECD report on Magnitude on Counterfeiting and Piracy of Tangible Products: An Update (Nov 2009). GTRIC-e stands for General Trade-Related Index of Counterfeiting and piracy of economies. GTRIC-e presents the “relative” intensity with which a given economy exports counterfeit and pirated products. The term “relative” means that for a given economy GTRIC-e indicates the average intensity of its counterfeit exports, taking the economy with the highest share of exports of counterfeit and pirated products as a benchmark. The figures do not include domestically produced and consumed products, or non-tangible pirated digital products.