Impact of Employment Agreements on Patents in Indonesia

Just like the owner of a real estate property controls the rights to how the property is to be used and maintained, intellectual property grants the owner of it certain protection and rights. Intellectual property can be anything that refers to the creations of the mind.

A patent is a type of intellectual property that provides exclusive rights for an invention to the owner or applicant. Broadly speaking patent grants the owner with the right to control how or if his invention can be used by others. In lieu of the protection, the information of the invention is made publicly available in the published patent document. For an invention or process to be considered patentable it is essential that the following three criteria are adequately met; Novelty, which implies that the invention must be new and not known to the public previously. Nonobviousness, which means the invention must not something that can be easily ascertained, it should be innovative or an improvement on an already existing technology or product or process. Industrial utility implies that the invention must have some sort of practical application. The search conducted prior to the application of the patent is called a patentability search or prior art search which checks for the strength of the patent in terms of the above-mentioned criteria.

In Indonesia, the patent office is referred to as the “Direktorat Jenderal Kekayaan Intelektual, which meansDirectorate General of Intellectual Property.”

There are two types of Patents in Indonesia namely Simple Patent and Patent. Simple Patents are granted for a shorter period which is of 10 years commencing from the date of the issuance of the letter of Simple Patent. Indonesia follows the first to file to determine the priority of the patents. Simple Patent refers to the patents that may be granted for a product only and not for processes. Patent on the other hand may be granted for both products and/or processes. Patents as opposed to Simple Patents are provided for a period of 20 years. The official website of the patent office in Indonesia provides the flow chart of the process, forms needed, fees that might be incurred, etc. making the information readily available.

In Indonesia, patent can be applied by the inventor or their attorney. However, if the patent is being filed by anyone other than the inventor, substantial documentation/statement as proof also needs to be submitted to confirm that the applicant is entitled to the invention for which patent is being filed.

If the invention has been applied for by the employer when the invention is the work of the employee, the employer must furnish relevant employment agreements which indicate that the employer is entitled to the invention. This helps discourages or resolve disputes that might occur in the future. The words used in the employment agreements also need to be read and understood completely between both the parties. An agreement that states that the employee “will assign their rights of an invention to the company” does not imply that the employer is entitled to the invention; it merely states that the employee agrees to the agreement or agrees to assign their rights in the future. As opposed to the above if the employment agreement reads that the employee “hereby assigns their rights…” implies the automatic transfer of the rights to the invention to the employer. Such is the importance of the agreements and their wording; it is advisable to audit the agreements if not done yet for any organization. If the agreements signed between the employee and the employer do not mention or specify the ownership of the inventions created by the employee then the employer may fail to hold rights over the same. Agreement if mentions that the employee assigns their rights to the employer, the agreement then should have been signed prior to the beginning of the employment. Should that not be the case, the employer must provide substantial consideration so as to enter into the Additional agreement/clause with the employee. However, the consideration must be of substantial value and not anything that is nominal in nature. Additionally, for clarity employer can include an addendum to the agreement that specifies that the previous inventions (and their rights) made by the employee will be assigned to the employer. The employer can also have the employee identify what they think comprises of their previous inventions to prevent other future disputes that may arise in the future as it provides clarity as to what the employee feels or understands is their invention.

Author: Dhruv Verma, Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at [email protected].