Draft counterfeiting regulation proposes strict import/export restrictions

The Indonesian Supreme Court is considering a draft implementing regulation on the control of imported or exported products that violate IP rights. The draft was prepared to implement provisions contained in the Customs Law and gives more definite authority to the Directorate General of Customs and Excise (DGCE) to suspend the importation or exportation of counterfeit products in certain circumstances, such as where:

• a commercial court order has been issued following a request by the owner of the products that have been illegally copied;
  
  
• the IP rights holder has registered its products with the DGCE in order for them to be recognized. Such products must also have been registered with the Directorate General of IP Rights; or
  
  
• there is a suspicion that the goods infringe products that are protected despite not being registered by the rights holder.

If the rights holder is relying on the second circumstance detailed above, the DGCE may require it to enter into a memorandum of understanding in order to avoid any later legal action resulting from the suspension. In addition, the regulation would require the rights holder to provide a cash or bank guarantee for the sum of Rp50 million. This guarantee is used to:

• compensate any party suspected of possessing counterfeit products for losses incurred by an unproven allegation;
  
  
• eliminate any misuse of rights; and
  
  
• protect DGCE officials from any claims arising from the suspension.

The Supreme Court has been asked to consider the draft regulation regarding the authorization to issue written court orders. Under the current Customs Law, such orders can only be issued by the district courts. However, the draft would bring this action under the jurisdiction of the commercial courts.

The Supreme Court is expected to issue an opinion on the draft regulation shortly.

Lia Alizia and Norma Mutalib, Makarim & Taira S, Jakarta