The monopoly practice and unfair business competition in the technology transfer activity through the foreign patent in Indonesia

It is common knowledge that technology development will be in line with the development of a nation. This fact is raising the need of developing countries like Indonesia to maximize its potential in the field of technology. However, it is as not easy as it sounds. There are many obstacles for a country to develop its potential in technology, notably for the experts in the relevant country to master the necessary skills. Due to this limitation, many countries are beginning to fill-in the gap by registering the license of foreign patents. It is expected that the use of foreign patents will replace the higher cost and the longer time needed to develop local technology in the developing countries. Unfortunately, the use of foreign patent licenses does not itself automatically enhance one’s ability to master the necessary skills. There are many cases where developing countries were deceived by the ‘grant-back’ clause attached to the foreign patent license. The licensee’s position is consequently considered lower than that of the licensor, which, in its turn, may give rise to monopoly practice and unfair business competition. This study was conducted with the purpose to formulate an effective technology transfer through the licensing of foreign patents that can refrain from the repetition of monopoly practice and unfair business competition, according to the TRIPs signed by WTO and the positive law in Indonesia. This study used the juridical-normative approach as the methodology of research. It also used the analytical approach through Law Number 13 of 2016 concerning patents; Law Number 5 of 1999 concerning the prohibition of the monopoly practice and unfair business competition as well as the Agreement on trade-related aspects of Intellectual Property Rights signed by the World Trade Organization, with respect to the license agreement of the foreign patent. Based on the issue, as established previously in this journal, the expected outcome of increased information dissemination to countries using patent licensing agreements in technology and information development related to any matter in intellectual property specifically in licensing agreement, has a higher possibility for monopoly c practices and unfair business competition. Therefore, it shows that, in principle, in order to prevent the licensing of foreign patents that lead to monopoly practice and unfair business competition, a country must establish a controlling entity to supervise the execution of the foreign patents and at the same time, enact harmonious rules and regulations with such supervision