Digital transformation in Indonesia

Published on 22 Jun 2020 | 3 min read

Should Indonesia consider filing software related patents?

In the past few years, digital transformation in Indonesia has been the big push of Government agencies and businesses in Indonesia.

The National Development Planning Agency (Bappenas) and the Creative Economy have set policy objectives in relation to the Digital Economy Development strategy for 2020- 2024. Indonesia already has 1 decacorn - GOJEK, widely known for its transport and delivery app and valued at over USD 10 billion. E-commerce platforms TOKOPEDIA and BUKALAPAK, online booking platform TRAVELOKA and digital payment service OVO, make the other 4 start-up unicorns that are valued at over USD 1 billion each.[1] 

The Covid-19 situation has only accelerated this path to digital transformation. E-signature start-ups Digisign and PrivyID with e-signature systems that have been certified by the Ministry of Communication and Information of the Republic of Indonesia, recorded unprecedented growth for customers on-boarding onto their systems during this period.[2]

Many people including Government employees worked from home during the pandemic, but this did not stop DGIP celebrating World IP day through a series of seminars with the public on 24-26 April 2020 through its official YouTube channel. Trade marks appeal hearings at the DGIP with IP agents are now conducted virtually and options for online payment for patent annuity payments were introduced.

Is this now the time to consider extending software patents to Indonesia, beyond the key markets of US, EU, Japan, China, and Korea?

In the last three years in Indonesia, software related patent applications have increased. In addition to US tech giant Microsoft, Chinese tech companies like Alibaba, Tencent, Ping An and Tencent have been filing more software related patent applications in Indonesia. The technologies relate to image processing, data encryption/authentication, payment systems, internet and e-commerce. Patent applications take 2-3 years to be granted in Indonesia but there is a high grant rate.  In Indonesia, under the Patents Law No. 13 of 2016, an invention shall exclude rules and methods that only contain a computer program. However, if the program has a character that has technical effect and function to solve a tangible or intangible problem, the invention is patentable.

While Indonesia does not have precedent setting litigation cases like the Alice Corp vs CLS Bank decision in the US, it is relatively easier to obtain software related patents in Indonesia, provided you have a corresponding grant in other countries. For example, corresponding grants from USA, Japan and China are often referred to and accepted by most Indonesian Patent Examiners.

In any event, many of the inventions do solve technical problems addressed to a specific field of technology. The full specification also usually includes flow diagrams/flowcharts to show all aspects of the process disclosed in the invention. Claims (system or apparatus) normally cover all elements in the block diagrams along with process (method claims).  Very few patent applications are rejected unless there is no corresponding grant in other countries, or the scope of invention disclosed is to implement a business process without overcoming a specific technical problem.

While Indonesia is traditionally viewed as a manufacturing and resource rich economy, the landscape is changing and Qualcomm and Samsung have traditionally been one of the top patent filers in Indonesia, with 5G technology expected to enter into Indonesia in the next few years. Finance companies and Indonesia banks are already using blockchain technology to support the digital economy in recent years. The Indonesian President Joko Widodo (Jokowi) in December 2019 outlined the government’s plan to replace certain levels of public service with AI to create broader efficiency.

With government support, the Indonesian ecosystem is therefore in place to support the growth in digital transformation and it is time to consider patent protection in Indonesia as a valuable IP asset that can be leveraged.

 

[1] https://industri.kontan.co.id/news/keren-kini-indonesia-punya-1-decacorn-dan-4-unicorn?page=all

[2] https://www.thejakartapost.com/news/2020/04/13/indonesias-e-signature-start-ups-gain-traction-amid-pandemic.html

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