What Intellectual Property Due Diligence Uncovers in Indonesian Deals
When a company is sold, raises investment, or is acquired in Indonesia, the lawyers read its intellectual property against the register. They read it the way an auditor reads the accounts: line by line. This is intellectual property due diligence. It tests a brand, a patent, or other IP against the public record, not the balance sheet.
The exercise exists to surface the “unknown unknowns“: the problems no one has detected yet. Better to find them before the parties are bound than after. For most rights holders, the uncomfortable part is that the IP problems found are rarely obvious. They are almost always ones the owner did not know about.
Below, we set out the IP findings that recur in Indonesian deals, and the one step that turns them from a problem into housekeeping.
Where IP Sits in Due Diligence
The examiner treats intellectual property as an asset, alongside land, equipment, and material contracts. The question is not only whether a mark or patent exists. It is who owns it, how long its protection runs, and whether the licences and assignments behind it are recorded at Indonesia’s IP office, the Directorate General of Intellectual Property (DGIP). A right that looks secure on the certificate can fail on any one of those points.
That is the difference between an IP portfolio and an IP position. The certificate says a mark is registered. Due diligence asks whether it is registered in the right name, for the right goods, still in force, and free of a competing claim.
The IP Findings That Recur
In portfolio and ownership reviews, SKC Law regularly finds rights that look secure on paper but fail the first hard question a buyer’s counsel asks.
Trademarks
Three problems come up repeatedly. First, a mark is registered, but the goods the business actually sells fall outside its class. The brand is then unprotected exactly where it trades. Second, a mark has gone unused for the goods it covers, which leaves it open to a non-use cancellation. Third, the target never secured the mark at all, and a competitor has already registered it.
Indonesian courts treat genuine use as a real test. In TikTok Ltd. v Fenfiana Saputra, the Central Jakarta Commercial Court dismissed a non-use cancellation in 2025 after the owner showed limited but consistent documented use. Note that the point runs both ways. Documented use defends a mark, and its absence is exactly what a buyer’s counsel will examine.
Patents and Software
Companies routinely hold inventions they never filed. Once an invention has been disclosed, a patent-availability check may find that protection is no longer possible. Value that existed on day one has quietly lapsed. Software sits in a similar blind spot: it is protectable in Indonesia through copyright, yet that protection is often neither recorded nor clearly assigned from the developers who wrote the software.
Licences and Recordals
An IP license or assignment that is not recorded at DGIP is not enforceable against third parties. That means the target may not hold, in a form the buyer can rely on, the very rights its business runs on. Unrecorded licences are among the most common asset-side findings. They are also among the least visible, until someone checks the register against the contract.
What This Means for Businesses
The examiner does not weigh findings equally. In practice the examiner prioritizes them by materiality: high, medium, or low; substantial, or merely a point to note. Each rating carries a different consequence. A low finding is an administrative fix. A high one touches the legality of the business itself. If the brand a company trades under is not correctly owned or registered, that can disrupt the transaction, not merely the paperwork.
Between those poles, IP findings translate directly into deal terms.
Each finding is ultimately priced into the deal. And each finding was a risk the seller had time to address beforehand.
The real cost, though, is timing. Due diligence runs on a short clock: commonly two to three weeks, and four to six for a full review. That clock starts only when complete documents arrive, and a recordal or a reclassification will not always fit inside the window. A problem found early is fixed. A problem found late is warranted, indemnified, or discounted.
What to Do Beforehand
The rights holders who come through due diligence well are the ones who ran their own first. Sellers increasingly commission their own intellectual property due diligence before going to market. They do this to find the gaps while there is still time to close them, and to build the disclosure record that protects them if a dispute follows later.
For IP, the pre-deal checklist is short and concrete:
- Confirm each core mark is registered in the classes the business uses, and file where it is not.
- Close non-use gaps or gather the evidence of use that defends the mark.
- Record every outstanding license and assignment at DGIP so the rights become opposable.
- Identify inventions and software worth protecting, and file them before they are disclosed.
- Resolve any third-party registration early, through opposition, cancellation, or negotiation.
An IP portfolio review is the least glamorous line item in deal preparation, and one of the most valuable. It is the discipline behind SKC Law’s note on why IP audits matter for growing businesses, now under a deal clock. Treated as a strategically managed asset rather than a drawer of certificates, a portfolio becomes a clean file the seller controls.
For a review of your trademark, patent, or copyright portfolio ahead of a transaction, contact SKC Law. That includes class coverage, non-use exposure, and outstanding DGIP recordals.
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This content is provided for general information only and does not constitute legal advice. For advice on specific matters, contact enquiries@skclaw.id.
