The implementation of Government Regulation No. 24 of 2022 on Creative Economy ("Regulation") has opened new opportunities for businesses in Indonesia to utilise intellectual property ("IP") assets as collateral for obtaining financing from banks and non-bank financial institutions. This regulatory change marks a critical development in Indonesia's IP regime and is poised to bolster the creative economy ecosystem. However, as the Regulation comes into effect, there are key steps that the Government, business owners, and lenders must take to ensure its effective implementation. Among the essential actions required are:
- the establishment of a public database by the Directorate General of Intellectual Property ("DGIP") to maintain records of encumbered IP assets;
- providing clarity on enforcement procedures for these assets; and
- the establishment of standardised guidelines for financial institutions regarding IP-based financing to be issued by the Financial Services Authority (OJK).
Business owners planning to utilise their IP as collateral need to conduct IP audits, register or record their IP assets with DGIP, and develop commercialisation strategies for their IPs. Commercialisation, such as generating revenue or royalties, is a critical factor for IP assets to be eligible for collateral. Lenders and financial institutions must also be prepared to handle applications for IP-based financing by allocating resources and establishing procedures to evaluate and process these applications. Additionally, their staff should be equipped with expertise in IP and IP valuation through competency training and courses.
The successful implementation of IP-based financing in Indonesia promises to enhance the economic landscape, boost creativity, and provide access to capital for businesses that leverage their IP assets.
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