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Print articleIndonesia - KPPU Guidelines: Intellectual Property Rights and the Application of the Anti Monopoly Law
July, 2009 -
The Commission for the Supervision of Business Competition (Komisi Pengawas Persaingan Usaha/KPPU) has issued Regulation No. 2 of 2009 regarding Guidelines for Intellectual Property Rights and the Application of the Anti Monopoly Law. In general the regulation refers to intellectual property rights and Article 50 (b) of Law No. 5 of 1999 on the Prohibition of Monopolistic and Unfair Business Practices (Anti-Monopoly Law). The guidelines have been effective since 13 May 2009.
Article 50 (b) of the Anti-Monopoly Law states that exempted from the Anti-Monopoly Law are:
“Agreements related to intellectual property rights, such as licenses, patents, trademarks, copyrights, industrial product design, integrated electronic circuits, and trade secrets as well as agreements related to franchises.”
The guidelines give details of the KPPU's interpretation of Article 50(b) and how this article is to work in practice. The guidelines state or confirm that the relevant agreements are exempted from the Anti-Monopoly Law although it is stated that not every franchise agreement is untouchable from the Anti-Monopoly Law.
The guidelines set out six basic clauses that will always require further analysis to ensure that monopolies and unfair business practices are not developing for the agreement ie: pooling and cross licensing, tying arrangements, restrictions on raw materials, restrictions on production and sales, restrictions on sale and re-sale price and grant backs.
It is expected that the guidelines will provide greater legal certainty with respect to how the KPPU is to interpret the relevant agreements and whether the agreements referred to in Article 50(b) of the Anti-Monopoly Law are actually exempt.
The guidelines also provide graphic examples of the implementation of Article 50(b), among others for: exclusive dealing, and case examples for a grant back scenario; restrictions on production and sales; and a refusal to license. The case examples are indicative of how the KPPU is going to interpret similar case scenarios with respect to the implementation of Article 50(b).
Article 50 (b) of the Anti-Monopoly Law states that exempted from the Anti-Monopoly Law are:
“Agreements related to intellectual property rights, such as licenses, patents, trademarks, copyrights, industrial product design, integrated electronic circuits, and trade secrets as well as agreements related to franchises.”
The guidelines give details of the KPPU's interpretation of Article 50(b) and how this article is to work in practice. The guidelines state or confirm that the relevant agreements are exempted from the Anti-Monopoly Law although it is stated that not every franchise agreement is untouchable from the Anti-Monopoly Law.
The guidelines set out six basic clauses that will always require further analysis to ensure that monopolies and unfair business practices are not developing for the agreement ie: pooling and cross licensing, tying arrangements, restrictions on raw materials, restrictions on production and sales, restrictions on sale and re-sale price and grant backs.
It is expected that the guidelines will provide greater legal certainty with respect to how the KPPU is to interpret the relevant agreements and whether the agreements referred to in Article 50(b) of the Anti-Monopoly Law are actually exempt.
The guidelines also provide graphic examples of the implementation of Article 50(b), among others for: exclusive dealing, and case examples for a grant back scenario; restrictions on production and sales; and a refusal to license. The case examples are indicative of how the KPPU is going to interpret similar case scenarios with respect to the implementation of Article 50(b).
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