The Intellectual Property Protection on Software in Indonesia

Technological advancements create a prompt need for legal protection for inventors and authors of discoveries. Intellectual property law is undeniably one of the most crucial components of technological advancements. This issue can be manifested in the form of computer programs, one of which is software. The law of intellectual property sets out the framework, or default setting, for assigning rights to software among product users and developers. The software’s intellectual property rights will be a crucial asset for a software developer company. In developed countries i.e. the US, the software is recognized by four IP regimes, including copyrights, trademarks, patents, and trade secrets.

The question is, however, is software protected in Indonesia? Yes, Software is protected in Indonesia. The software also fits into the Intellectual property category as a type of intangible property created by the mind, such as inventions, works of art and literature, designs, names, or images. The software can indeed be protected in Indonesia under the copyright and trademark regime. This article will further address software protection in Indonesia in terms of intellectual property law.

Legal Protection For Computer Programs (re: Software) In Indonesia

1. Copyright 
   Copyright has been the most common software protection, which in Indonesia has been regulated in Law Number 28 of 2014 concerning Copyright (“Copyright Law”). In Copyright Law, a computer program is defined as “a set of instructions that are expressed in the form of languages, codes, schemes, or in any form that is intended for a computer to perform specific functions or to achieve certain outcomes”. In the copyright regime, computer programs (e.g. software) are protected for 50 years from the first publication (See Article 59 paragraph (1) in conjunction with Article 40 paragraph (1) letter S of the Copyright Law). Thanks to the Berne Convention, regardless of whether the software was developed from scratch or built upon the source code of another application, the intellectual property in the finished work is automatically protected by Copyright Law. Copyright is acquired automatically upon the creation of the original work, unlike patents and trademarks, which require an application process.

2. Trademark
   Law No. 20 of 2016 about Trademarks and Geographical Indications (“Trademark Law”) governs the protection of marks or brands. A Mark is defined as any sign capable of being represented graphically in the form of drawings, logos, names, words, letters, numerals, or colors arrangement, in 2 (two) and/or 3 (three) dimensional shapes, sounds, holograms, or combination of 2 (two) or more of those elements to distinguish goods and/or services produced by a person or legal entity in trading goods and/or services. In essence, the software can be protected in the trademark regime in the form of images, logos, names, words, letters, numbers, color arrangements, in 2 (two) and/or 3 (three) dimensions that identify as the originator of a specific good or service. To understand, the mark does not protect software in the form of programs (related to license and piracy) created by developers, but only as a name or logo as a representation of goods and/or services in commercial activities. Mark protection is valid for 10 years from the date of application (filing date) and can be extended for another 10 years.

Can Computer Programs (re: Software) be Patented In Indonesia?

Patent rights is regulated under Law No. 13 of 2016 on Patents (“Patent Law”). However, the inventions do not include several things; one of which is the rules and methods containing only computer program.

Pursuant to the above provision, it is clearly explained that software is not patentable in Indonesia; nevertheless, there is an exception for computer programs in relation to operating hardware, as mentioned in the elucidation of Article 4 paragraph 3 letter d of Patent Law, as below:

“The term “rules and methods containing only computer program” means computer program that only contains program without character, technical effect and problem solving; however, if the computer program has characters (instructions) having technical effects and function to produce problem solving whether tangible or intangible constitutes patentable Inventions. Examples of patentable Inventions: 

1. Algorithm means an effective method expressed as a restricted series of instructions from well-defined instructions to calculate a function. Started from a pre -5- condition and initial input (might be zero), the instructions define a computation that if executed, processed through a definite number of a well-defined states, which eventually produce “output” and terminate at final state. The transition from one state to next one is not necessarily deterministic; some algorithms known as randomized algorithm, incorporate random input. 
2. Encrypting information by coding and decoding to shuffle information so that cannot be read by other party”.

We can conclude that, software can be patented in Indonesia if it is proven to be a technical-purposes kind of software as explained in Article 4 letter d of the Patent Law.  For instance, a computer program “Scenario Reproduction Methods, Simulation Devices, Simulation Systems, and Computer-Readable Storage Media” held by CRSC RESEARCH & DESIGN INSTITUTE GROUP CO., LTD. from the PRC hold the patent protection by generating technical functions.

Enforcement Upon Software Infringement

Under spite of the fact that Indonesian law has regulated software protection, particularly under Copyright Law, software infringement is still rampant in Indonesia. The high rate of software piracy in Indonesia may be traced back to two factors: a general lack of regard for intellectual property rights and the perception that authorized versions of pirated software are prohibitively expensive.

Software is not only being pirated by individuals (for personal purposes), but surprisingly also by companies for their commercial purposes. The Business Software Alliance (BSA) revealed that 83 percent of Indonesian companies use pirated or unlicensed software. This data makes Indonesia the country in Southeast Asia even the Asia-Pacific region that uses the most pirated software at the corporate level. In fact, Article 113 paragraph 3 of the Copyright Law provides both criminal and civil proceedings for the unlawful use of software without the Copyright Holder’s authorization:

“Every person who unlawfully and/or without permission of the Author or Copyright holders infringes the economic rights of the Author as referred to in Article 9 Section (1) point a, point b, point e, and/or point g for Commercial Use shall be sentenced to imprisonment for up to 4 (four) years and/or fine up to Rp1,000,000,000.00 (one billion rupiahs)”.

Many Indonesian companies involved in software piracy claim that the software is not intended for business purposes or is not in accordance with their business, or that the software is merely operated by the employees without the company’s authorization. Nonetheless, Article 1367, paragraph 1, of the Indonesia Civil Code establishes the company’s responsibility for the activities of its personnel:

“An individual shall be responsible for the damage which he has caused by his own act, as well as for that which was caused by the acts of the individuals for whom he is responsible, or caused by matters which are under his supervision”

That being said, software developers/companies who suffer losses as a result of illegal acts within the company may claim the infringing company to recompense for the losses.

In order to deal with software infringement threats in Indonesia, software developers/companies are enabled to take the following actions to enforce software infringements in relation to intellectual property compliance:

1. Copyright
   If a copyright infringement on software, such as piracy or unlicensed software operation, is found, the copyright owner has several alternatives for recuperating its rights, such as:
   • Mediation
     According to Article 95 paragraph (4) of the Copyright Law, any copyright infringement in the manner of unlawful conduct shall be resolved through mediation before initiating a civil lawsuit and/or filing a criminal complaint. This is done initially to settle and seek a resolution for illegal conduct in order to compensate the creator for losses incurred as a result of the infringement.
   • Compensation Claim
     If the mediation result negatively (not settled), the software companies/developers can file a civil lawsuit to the commercial court or file a criminal complain for damages in regard to the software infringement. Based on the Article 105 of the Copyright Law, the right to file a civil lawsuit for copyright infringement does not preclude the holder’s right to prosecute criminally.

2. Trademark
   • Revocation of Registered Trademark (Article 72 to Article 74 of Trademark Law)
     The trademark proprietor’s rights may be revoked, for instance, if the mark has not been used in 3 (three) consecutive years due to the absence of commercial activity. This is also referred to as “non-use cancellation” lawsuit.  
   • Trademark Cancellation (Article 76 to Article 79 of Trademark Law)
     A cancellation is the removal of a trademark registration from the register in response to the filing of a cancellation action. The proceedings are initiated when a party with standing files a cancellation action with the commercial court. The common ones are that the registered mark is likely to be confused with a prior-registered mark or that it does not meet the requirements for trademark registration, such as by not being distinctive. 
   • Claims for compensation and termination of all actions related to the use of the mark (Article 83 paragraph (1)
   • The owner of the registered mark (the owner of the software mark) or the licensee may file a lawsuit against another party who unlawfully uses a mark that has similarities in principle or in its entirety for similar goods and/or services of the software. 
   • Settlement of disputes through arbitration or other alternative dispute resolution

Author: Fitri Astari Asril (astari@aco-law.com)