Wednesday, November 15 2023   \  Published by K&K Advocates.

Intellectual Property Updates in Indonesia

Intellectual Property Updates in Indonesia

IP as Collateral in Indonesia: New Regulation and Implementation Challenges

We are excited to inform about a significant development in Indonesia's regulatory landscape. Government Regulation No. 24 of 2022 on Creative Economy (“GR 24/2022”), signed to revitalize and boost the growth of Indonesia's creative industry, introduces a groundbreaking opportunity. This regulation paves the way for the use of Intellectual Property (IP) assets as collateral to secure financing from banks and other financial institutions.

Unlocking Opportunities for IP-Based Financing

This regulation outlines a framework that allows bank financial institutions and non-bank financial institutions to utilize IPs as collateral. IPs can take the form of fiduciary guarantees, contracts related to Creative Economy activities, and royalty rights associated with Creative Economy activities. This innovation has the potential to unlock a wide range of opportunities, particularly benefiting creators and innovators.

Challenges in Implementation

The Indonesian Government had initially planned for the official commencement of GR 24/2022 on July 12, 2023. However, the practical execution has faced delays primarily due to the absence of essential technical regulations. These regulations are crucial for providing guidelines on various aspects, including the qualification criteria for parties seeking IP financing, the standardized method for IP valuation, and the process for using IP assets as security in the financing scheme. Read more

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