The Government of Indonesia Enacted Regulation on Creative Economy, Allowing Intellectual Property as a Collateral
Recently the government issued new Government Regulation Number 24 of 2022 concerning Creative Economy (“GR 24/2022”) as the implementing regulation of Law Number 24 of 2019 concerning Creative Economy. This regulation is intended to increase the value of intellectual property sourced from human creativity based on cultural heritage, science, and/or technology, which stimulates incentive for the actors of the creative economy, allowing the intellectual property to be guaranteed as collateral.
GR 24/2022 will encourage business actors, especially the actor of the creative economy to develop their products by speeding up the advancement of their intangible assets in the form of intellectual property, among others Copyright, Mark, Patent, Industrial Design, and Trade Secret. Ultimately, the actor of the creative economy’s intellectual property will add more value, more advance, and brings tight competition to their business field. As such, we compiled several important matters in GR 24/2022 for the actor of the creative economy to get the funding and things to prepare before getting the funding from the financial institution.
- The actor of the creative economy should understand the scope of GR 24/2022 is:
a) Regulates on how to finance a creative economy;
b) Facilitate the development of an Intellectual Property-Based Creative Economy Product Marketing System;
c) Regulates the Infrastructure of Creative Economy;
d) Regulates the Incentive for the actor of the creative economy;
e) Central / Regional Government liability and community participation in the development of a Creative Economy; and
f) Dispute resolution of financing.
- Source of funding
The source of funding for Creative Economy are:
a) The state budget;
b) The regional budget; and/or
c) Other legitimate sources of funding.
- Things to prepare to get the funding
To ensure the Intellectual Property has measurable value, the actor of the creative economy shall firstly file recordation for Copyright or file an application for Trademark, Patent, and/or Industrial Design.Once the Intellectual Property is registered, such intangible assets can be utilized as collateral. In order to receive funding, the actor of the creative economy shall ensure that they prepare the following:
a) Funding proposal;
b) Operating a business in a Creative Economy;
c) Has an engagement related to the intellectual property of creative economy products; and
d) Possess proof of recordation and/or certificate of Intellectual Property.
- Intellectual Property Assessment Criteria and Intellectual Property Appraiser
GR 24/2022 limits the method to assess Intellectual Property in measuring the value. Based on the regulation, there are 4 (four) methods, among others :
a) Cost approach;
b) Market approach;
c) Income approach; and/or
d) Other assessment approaches in accordance with applicable assessment standardsOn the other hand, the Appraiser shall be conducted by the certified appraiser issued by the ministry who administers government affairs in the field of state finances, is a competent person as an appraiser in the field of Intellectual Property, and is Registered with the ministry that carries out government duties in the field of Creative Economy.
The collateral in the implementation of the Intellectual Property-Based Financing Scheme
may be regulated between the investor and Creative Economy actor in the form of:
a) Fiduciary guarantee of intellectual property;
b) Contracts in Creative Economy activities; and/or
c) Collection rights in Creative Economy activities.
- Settling the dispute on the financing of the Creative Economy
GR 24/2022 allows the parties to settle it at court or out of court. Therefore, the dispute settlement will be based on the consensus of the parties in the agreement as well as the place of settlement.On the other hand, the alternative dispute settlement between the actor of the creative economy and bank/non-bank financial institution shall be carried out by the alternative dispute settlement institution authorized by the Financial Service Authority (Otoritas Jasa Keuangan).
Please note that GR 24/2022 will be valid one year from the date of promulgation.
Our firm is experienced in handling clients to receive funding in Intellectual Property. We will first carry out the Intellectual Property due diligence process to assess the client’s intangible assets to create a more robust Intellectual Property portfolio.
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