Copyright as a Fiduciary Guarantee Hampered by a Valuation System
There needs to be a revision of the Fiduciary Guarantee Law to match the special character of copyright as an object of guarantee.
Are there people who are willing to buy copyright with a certain amount of money? What is the market for intellectual property rights really there? These two questions became the opening of a focus group discussion about copyright as an object of fiduciary guarantee at the Faculty of Law, Universitas Indonesia (FHUI), Friday (9/28).
Both questions are relevant to the fact that there is no clarity about the mechanism for making copyright an object of fiduciary guarantee. In fact, regulations concerning guarantees are closely related to Indonesia’s economic development efforts.
“It must be distinguished between creation, namely property with copyright as intellectual property right. This thing is a property, but my right to reproduce this is called copyright,” said Brian Amy Prastyo, lecturer of Intellectual Property Rights at FHUI.
Brian explained that copyright provides rights to various commercialization from property in the form of a work of creation. Since its enactment, Law No.28 of 2014 regarding Copyright (Copyright Law) to replace the old Copyright Law, a new regulation is set out in Article 16 that copyright can be the object of fiduciary guarantee.
| Copyright Act
Article 16: (1) Copyright is an intangible movable object. … (3) Copyright can be used as an object of fiduciary guarantee. (4) Provisions concerning Copyright as objects of fiduciary guarantee as referred to in paragraph (3) are carried out in accordance with the provisions of the legislation. |
This new provision is closely related Law No.42 of 1999 concerning Fiduciary Guarantee that have anticipated the possibility of making movable objects that are intangible as objects of guarantee.
| Fiduciary Guarantee Law
Article 1 number 2: … 2. Fiduciary guarantee is a guarantee right over moving objects both the tangible and the tangible intangible and immovable objects, especially buildings that cannot be encumbered by mortgage rights as referred to in Act Number 4 of 1996 concerning Underwriting Rights which remain in the possession of the Fiduciary Giver, as collateral for the repayment of certain debts, which gives the priority position to the Fiduciary Recipient to the creditor others. |
In fact, making a copyright as an object of fiduciary guarantee is not an easy thing to do. Udin Narsudin, notary and PPAT in South Tangerang City, explained that throughout his career he had never found any attempt to make movable objects that are intangible as objects of fiduciary guarantee.
“In practice, as long as I have been a notary for about 20 years, I have never made a deed (for such fiduciary guarantee). It’s hard to judge with money, what is it like?” He said.
Udin explained that to date there is no guideline for evaluating the economic value of intangible objects such as copyrights. These norms are left to be the norm in the law without implementing regulations until now.
Arief Rachmat Pramana, Group Head of the Legal Research and Development of Financial Service Sector from the FSA revealed the same thing about the difficulty in applying the provisions. Arief said that the banking sector tends to reject copyright as a fiduciary guarantee because valuation issues are in the form of money.
“The bank is trying to give loan so that the credit can be returned, if it’s the intellectual property, how to assess it?” Said Arief.
Another thing that is not yet clear is the method of execution. “If the loan is problematic, how about the execution of the copyright?” Arief added. In the end, banks in Indonesia are not willing to provide financing with copyright guarantees.
Brian acknowledges that copyright issues as fiduciary guarantees are not easy. First, it must be understood that the construction of copyright in Indonesia is divided into economic rights and moral rights. Copyright can be a fiduciary guarantee limited to its economic rights. Second, the transferable economic rights also make the Copyright Holder not always the Creator.
“For example, books become commercial when they are sold. When the author gives a publishing license, the one who can the debtor is the writer or the publisher?” Brian said.
It is even more complicated when it comes to copyright in music. Music creators, producers, artists who perform music shows, and composers each have economic rights for the same form of work.” Even though the item is one, namely recording work,” Brian said.
Therefore, there needs to be clarity about who has the right to be a debtor in the fiduciary guarantee of copyright. An important role of the notary is required to draw up the construction of what rights transferred to the creditor as a fiduciary.
Regarding Udin’s critical note as a notary and Arief from the OJK, Brian confirmed that a reliable valuation system was needed if we still wanted to maintain copyright as a fiduciary guarantee. This valuation system needs to be managed by a special institution to ensure the value of the rights that are imposed by fiduciary can be enjoyed by fiduciary holder if the debtor fails to repay the loan.
Another thing that needs to be provided is the market to monetize the rights to claim in the form of the copyright. “There may be a time when fiduciary holders are just unwilling to collect and just want to sell it. Now we are supposed to find the market for this,” Brian said.
