Intellectual Property (IP) - Government Regulation of Law No. 24 of 2019 on Creative Economy Regulation
The Indonesian Government recently enacted Government Regulation of Law No. 24 of 2019 on Creative Economy Regulation ("Regulation"). The Regulation confirms and promoted Intellectual Property ("IP") assets as security objects that can be used to obtain financing from banks and non bank financial institutions. The concept of taking security over IP itself is not new. It was first introduced in Law No. 24 of 2019, which stipulated that the government would facilitate and IP financing scheme for creative economy entrepreneurs and allow them to develop a marketing system for their IP-based products.
Regulatory-wise, Law No. 42 of 1999 on Fiducia Security ("Fiducia Law") stipulates that a fiducia can be
owned and transferred, whether registered or unregistered. In addition, Law No. 28 of 2014 on
Copyright ("Copyright Law") and Law No. 13 of 2016 on Patent ("Patent Law") stipulate explicitly that
Copyrights and Patents can be the object of a fiducia security. Although theoretically, IP assets can be
encumbered with a pledge, as explained above, however, the authority responsible for recording and
registering the ownership over IP assets is the Directorate of Intellectual Property ("DGIP"). Unlike land
and property assets, in which ownership and security are registered in one registry maintained by the
same authority, namely the National Land Agency ("Badan Pertanahan Nasional / BPN"), whereas the ownership
of IP assets is registered with the DGIP, but the holder of a security interest over IP assets is registered
with the Fiducia Office. As analyzed in this update, while the Regulation aims to promote IP (often the
sole or primary asset in creative economy industries) as a valuable and thus acceptable security for a
financing/load transaction, there is still a obstacle in the practical application.