Intellectual Property: Definition, Types, and Benefits

ADCO Law

A Brief History of IP in Indonesia

As the law develops and harmonizes with international standards, the terminology in the field of Intellectual Property in Indonesia has undergone significant changes. Initially known as Hak Milik Intelektual (a translation of the term “Intellectual Property Rights”), the term then changed to Hak Atas Kekayaan Intelektual (HAKI), and was later simplified to Hak Kekayaan Intelektual (HKI¹), and is now simply recognized as Kekayaan Intelektual (KI) or Intellectual Property (IP). This change was formalized through Presidential Regulation Number 44 of 2015 concerning the Ministry of Law and Human Rights, which has now been amended through Presidential Regulation Number 18 of 2023 concerning the Ministry of Law and Human Rights.

The primary reason for this change is to align the term with the more commonly used naming conventions in the international arena. In many countries, the institutions that deal with intellectual property do not include the word ‘rights’ in their official names. For example, in South Korea, there is the Korean Intellectual Property Office (KIPO), in Singapore, there is the Singapore Intellectual Property Office (SIPO), and in Malaysia, it is known as the Malaysian Intellectual Property Office (MIPO).² By removing the term ‘rights’ from the nomenclature, Indonesia strives to make it more easily understood in a global context and facilitate international cooperation in this field. This change also reflects Indonesia’s commitment to keeping up with the developments and adaptations in the international arena concerning the protection of intellectual property.

Through this article, we will further explore the concept, types, and important benefits of Intellectual Property for society and the economy.

Read More: Practice Area: Intellectual Property

What is Intellectual Property?

Intellectual Property (“IP”) is a legal concept that refers to creations and innovations resulting from human intellectual efforts that have economic value. IP encompasses various forms of intellectual creations, such as inventions, works of art, literary works, designs, and symbols used in commercial activities. Legal protection for IP grants exclusive rights to IP owners to control the use and distribution of their work, as well as to gain recognition or financial benefits from it.

These exclusive rights include trademarks, geographical indications, patents, industrial designs, copyrights, layout designs of integrated circuits, trade secrets, communal intellectual property, and plant varieties. In Indonesia, IP is managed by the Directorate General of Intellectual Property under the Ministry of Law and Human Rights, ensuring that intellectual creations are protected and can provide sustainable economic benefits to their owners.

Legal Basis of IP

The following are the laws and regulations related to IP, among others:

1. Law No. 7 of 1994 concerning the Ratification of the Agreement Establishing the World Trade Organization;
2. Law No. 17 of 2006 concerning the Amendment to Law No. 10 of 1995 on Customs;
3. Law No. 28 of 2014 concerning Copyright;
4. Law No. 20 of 2016 concerning Trademarks and Geographical Indications;
5. Law No. 13 of 2016 concerning Patents;
6. Presidential Decree No. 18 of 1997 concerning the Ratification of the Berne Convention for the Protection of Literary and Artistic Works;
7. Presidential Decree No. 17 of 1997 concerning the Ratification of the Trademark Law Treaty;
8. Presidential Decree No. 15 of 1997 concerning the Amendment of Presidential Decree No. 24 of 1979 concerning the Ratification of the Paris Convention for the Protection of Industrial Property and the Convention Establishing the World Intellectual Property Organization;
9. Presidential Decree No. 19 of 1997 concerning the Ratification of the WIPO Copyright Treaty.

Read More: ADCO Law Expands Its Legal Practice by Appointing Adolf Martua Panggabean as New Partner for the Intellectual Property Practice Area

What Are the Types of IP in Indonesia?

1. Trademark
   A trademark is a sign that can be represented graphically and includes images, logos, names, words, letters, numbers, and color arrangements in two-dimensional and/or three-dimensional forms, as well as sounds, holograms, or a combination of two or more of these elements. A trademark protects the commercial identity of a product or service, such as a logo or brand name used in marketing. For instance, the “ADCO Law” trademark protects the firm’s logo and name, distinguishing it as a provider of legal services.

2. Geographical Indication
   A geographical indication is a sign that indicates the geographical origin of a product, which has certain qualities, reputation, and characteristics resulting from the geographical environment, such as natural and human factors. An example of a geographical indication is Gayo Coffee from Aceh, known for its distinctive flavor characteristics because it is produced in a particular region in Indonesia. This protection helps preserve the cultural and economic value of the product. Similar to trademarks, geographical indications in Indonesia are regulated in Law No. 20 of 2016 concerning Trademarks and Geographical Indications, which ensures legal protection upon registration with the Ministry of Law and Human Rights.

3. Patent
   A patent is an exclusive right granted to an inventor for an invention in the field of technology, allowing the inventor to exploit the invention or authorize others to do so for a specific period. This right includes the element of novelty, ensuring that the invention is new, not previously disclosed, has an inventive step, and can be applied in the industry. An example of a patent is the discovery of new methods for producing pharmaceuticals or electric car technology.

4. Industrial Design
   An industrial design is a creation that encompasses shapes, configurations, or combinations of colors and lines that give an aesthetic impression and can be applied to three-dimensional or two-dimensional products. Industrial design protection ensures that no other party can use the design without the owner’s permission. For example, the unique design of a perfume bottle or the exclusive shape of a piece of furniture.

5. Copyright
   Copyright is an exclusive right automatically granted toowners once their work is materialized, covering literary, artistic and scientific creations.. Copyright includes two main rights: moral rights, which ensure the owner’s credit and protection against harmful modification, and economic rights, which allow for commercial exploitation of a work, such as reproduction and sale.  For example, an author has the exclusive right to publish and sell his/her book.

6. Layout Design of Integrated Circuits
   The layout design of integrated circuits is a creation in the form of a three-dimensional layout of elements used in electronic circuits, such as microchips or processors. This right protects designs used for the manufacture of integrated circuits and prevents others from copying or using those designs without permission. This is crucial in high-tech industries, where innovation in electronic circuits is critical.

7. Trade Secret
   A trade secret is information not known to the public that has economic value because it is useful in business activities and is kept confidential by its owner. This information can be in the form of formulas, production methods, or business data that provide a competitive advantage. A well-known example of a trade secret is Coca-Cola’s secret formula, which the company keeps secret to maintain the uniqueness of its product.

9. Communal Intellectual Property
   Communal Intellectual Property is a creation that includes both tangible and intangible works, as well as a combination of both, that showcases traditional culture or genetic resources shared by a community. This protects traditional knowledge, practices, and innovations that have been passed down through generations in the community from unauthorized exploitation or commercial use by others without consent.
10. Plant Variety
    Plant varieties refer to distinguished groups within a species based on characteristics such as plant shape, growth traits, leaves, flowers, fruits, seeds, and genetic features, which receive special protection overseen by Indonesia’s Ministry of Agriculture through the Plant Variety Protection Office, distinct from the Directorate General of Intellectual Property. Governed by Law No. 29 of 2000 concerning Plant Variety Protection, this legal framework aligns with international commitments under the United Nations Convention on Biological Diversity, the International Convention for the Protection of New Varieties of Plants, and the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights. These agreements mandate Indonesia to establish and enforce intellectual property regulations, including for plant varieties.

Why is IP Important?

IP is an essential component that provides legal protection for creative and innovative works. With IP, the owners of works gain exclusive rights that allow them to commercialize, control the use and distribution of their work, as well as protect against illegal use and piracy. This protection is not only important for preserving the moral and economic rights of IP owners but also encourages the creation of more innovation and creativity. Economically, IP opens up opportunities for the owners of works to generate income from licenses and royalties, which can be a sustainable source of revenue.

Additionally, IP plays a crucial role in promoting healthy competition in the global market, where products with strong IP protection are more easily accepted and valued. This assures innovators that their work will not only be recognized but also protected from claims or infringement by others. In the fast-paced digital era, where information and works are easily disseminated and at risk of being stolen, IP has become increasingly critical. Through this protection, owners can ensure that their ideas and innovations remain secure and can make a real contribution to economic and cultural advancement.

For further consultation regarding Intellectual Property, do not hesitate to contact us at ADCO Law.

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About ADCO Law:

ADCO Law is a firm that offers clients a wide range of integrated legal services, including in commercial transactions and corporate disputes in a variety of industry sectors. Over the course of more than a decade, we have grown to understand our client’s industry and business as well as the regulatory aspect. In dealing with business dynamics, we provide comprehensive solid legal advice and solutions to minimize legal and business risks.

ADCO Law is a Proud Member of the Alliott Global Alliance (AGA) in Indonesia. Founded in 1979, AGA is one of the largest and fastest-growing global multidisciplinary alliances, with 215 member firms in 95 countries.

As a law firm, we also believe in regeneration. To stay abreast of business changes and stay relevant, our formation of lawyers is comprised of the top graduates from Indonesian and international law schools.

Should you have more queries regarding this matter, please do not hesitate to contact us

ADCO Law

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Disclaimer: This article has been prepared for scientific reading and marketing purposes only from ADCO Law. Accordingly, all the writings contained herein do not constitute the formal legal opinion of ADCO Law. Therefore, ADCO Law should be held harmless of and/or cannot be held responsible for anything performed by entities who use this writing outside the purposes of ADCO Law.