What Intellectual Property Right Means for Startups and SMEs

Adjie Priambada - 19 May 2015

Starting and running a business without taking care of the intellectual property right (IPR) is a mistake. It can make the generated ideas and products become prone to getting stolen. Therefore, entrepreneurs should have secured the IPR for their business, as it may serve as a fundamental base for the business.

IPR refers to a right derives from human’s thought or creativity that results on certain product or process which is beneficial for many. Frankly, it is the right to economically enjoy the output of certain intellectual creativity.

In business, IPR may become an essential elenent since it provides an advantage while competing in targeted market. It may also trigger new ideas and innovation that will, in turn, rain the company, and the public, with profit and benefits.

To understand further about IPR and its role for startups and SMEs in Indonesia, we had a discussion with three experts who know this area inside out: StartupHKI’s Founder Fahrian Agam, IPLOID’s IP&PVP Consultant Gunawan Bagaskoro, and Assegaf Hamzah & Partners’ Senior Associate Ari Julianto Gema.

IPR for startups and SMEs

Accoording to them, IPR is generally divided into two main categories, which are Copyright and Industrial Property Right. Copyright is designed to protect works of art, literature, and science. Meanwhile, the Industrial Property Right covers the protection of Patent, Brand, Industrial Design, Trade Secrets, and Layout design of integrated circuits.

When starting a business, one of essential elements that should be taken care of is the protection towards the IPR of the business. It is imperative not to do so later once the business has grown. This is to protect the company’s secrets and important assets from any theft.

Thus, for early businessmen, like startups and SMEs, IPR is important as it may serve as a shield that protects the company from competitors or piracy, as well as a sword since IPR is a monopoly right which is ackowledged without violating any rules of competition and can be used to restrict other parties using the IPR without proper permit.

Gema emphasized:

“The startups and SMEs’ most underlying asset isn’t physical ones, but ideas which are expressed into a product.”

Bagaskoro was on the same page. According to him, startups and SMEs should give portion to IPR since it would be their saviour in the business’ initial phases. When it comes to hard times, for instance, the IPR may save the entrepreneurs since it can be cashed out, inherited, or licensed to other parties.

Bagaskoro explained:

“Only addressing IPR after being big is a mistake. The startups and SMEs’ IPR should’ve been identified by the owners and applied. Thus, when the company starts growing big, the IPR has been registered under the owner’s name.”

In line with those thinkers, Agam also added that by having the company protected by the IPR, owners may fully enjoy their hardwork. Besides protecting the business from piracy and other big players, IPR may also facilitates capital owners in entering the market. Therefore, UPR protection remains one of basic elements upon developing startup industry.

The Implementation and Socialization of IPR in Indonesia

All three agreed that the implementation of IPR in Indonesia has been quite well. Legally, IPR in Indonesia has actually been equipped with complete regulation, and even, Gema claimed, adopted the provision set in the international convention in IPR. The regulation has also clearly regulated about the mechanism of IPR registration.

He said, “The information regarding that point (regulation and registration process) can be easily accessed through the official website of IPR Directorate General (IPR DG). However, it indeed takes more time from the registration phase to the issuance of the certificate, although the IPR DG has attempted to fix the registration system to make the process faster.”

Agam added that in recent years, the IPR DG ahs developed various online facilities to facilitate the IPR registration process, such as IPR e-tutorial, IPR e-status, and other systems. Nonetheless, Bagaskoro claimed that the progress still faces a number of legal issues, especially for the SMEs.

“As for the law enforcement, the brand owners, especially SMEs, are generally still blocked by the cost for enforcing the law, such as cost of lawyer and advertising board, as well as the broad area of Indonesia which serves various challenges in identifying any violation towards IPR,” Bagaskoro said.

Regarding the socialization, the government indeed holds a central role in educating the public, in this case the IPR DG. However, other stakeholders like IPR consultants, academics, business owners and consumers should also share the burden in order to make the process becomes much more effective.

Gema explained, “Other stakeholders, like IPR consultants, academics, business owners and consumers, need to involve themselves into the socialization to make IPR becomes more publicly known and understood easily, so that the focus wouldn’t be solely to protect the IPR, but also to guide IPR to bve economically beneficial for business owners in particular and the public in general.”

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