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Intellectual property will be on top of the agenda for the government when the US trade representative makes an annual visit to Jakarta in the coming months. The trade representative put Indonesia on the feared “priority watch list” last year for failing to take adequate steps to protect intellectual property rights. The list is effectively a blacklist of countries the US government considers to be no-go zones for American businesses with intellectual property assets.

The Indonesian government will be eager to shake off this reputation. To do so, it will need to show that the national task force created by President Susilo Bambang Yudhoyono in 2006 has teeth and the capacity to tackle rampant intellectual property theft.

This is no small task. In May last year, the trade representative accused the task force of being ineffective and incapable of achieving any of its objectives.

The biggest challenge for the government is the judicial system. Only a handful of suspects charged by police appear before a judge and only a fraction of those end up in jail. The task force must reverse this trend by implementing mechanisms that hold everyone in the judicial process accountable. Once implemented, it will be relatively simple for owners of intellectual property to follow the progress of a case.

Owners of intellectual property can also expect to see an increase in the number of complaints handled directly by the intellectual property office. Andy Sommeng, the director general of intellectual property, plans to have his new team of investigators up and running this year. The team will work closely with the police special crimes units. This will speed up police case handling and simplify things generally. It is likely that owners of intellectual property will also have the option of dealing directly with the intellectual property office instead of the police.

By the middle of the year, the government should be ready to introduce its new intellectual property laws. The government’s focus has been on speeding up the time it takes to register IP rights, especially trademarks, which currently take two to three years to register. This is a welcome relief for anyone planning to launch a new product.

Meanwhile, the free-trade agreement between China and Asean should be top of the agenda for Indonesian businesses. It will open up Indonesia to Chinese exporters, eventually eliminating tariffs on 90 percent of goods sold in Indonesia. The average tariff on Chinese goods sold in Indonesia has dropped from 12 percent to less than one percent, making Indonesia an attractive market for Chinese exporters. There are fears that local manufacturers will be overwhelmed by cheap Chinese imports. Equally worrying is whether we can compete with the Chinese in the area of intellectual property.

Chinese exporters are much more sophisticated than most when it comes to intellectual property. The Chinese trademark office handles 25 times the number of applications handled here in Indonesia. The Chinese patent office tells a similar story, issuing patents to 500,000 Chinese inventors in 2009 alone. By contrast, Indonesian businesses have a low participation rate in patent filings.

In the intellectual property arena, where trademark and patent registrations are king, it is easy to see how Indonesian manufacturers could find themselves outwitted by smarter Chinese exporters. The Chinese also show a great deal more ferocity when it comes to using the courts to defend their intellectual property. Any manufacturer who has not completed a full review and registered all of their intellectual property assets should do so immediately.

Brett McGuire is a consultant for Rouse. His Web site is HAKItree.com/brettmcguire