Legal Certainty of Copyright-Based Fiduciary Security: Indonesian vs. Malaysian Law

Abstract

This study examines the legal uncertainty surrounding the recognition and enforceability of copyright as an object of fiduciary security in Indonesia—where copyright is expressly permitted as collateral under Article 16(3) of the Copyright Law—compared with Malaysia, which provides no statutory basis for copyright-based secured transactions, with the aim of analyzing the regulatory gaps, identifying comparative insights, and proposing normative solutions to strengthen Indonesia’s framework for copyright-based financing. Employing a normative legal research method, this study utilizes a statute approach by examining key legislation governing fiduciary security and copyright in both countries, supported by doctrinal analysis through the lenses of Gustav Radbruch’s theory of legal certainty and Satjipto Rahardjo’s progressive legal theory. The findings reveal that Indonesia has established a more advanced and coherent regulatory foundation for copyright-based fiduciary security through the synergy of the Fiduciary Security Law, the Copyright Law, and Government Regulation No. 24/2022 on the Creative Economy, which together recognize copyright as a transferable and collateralizable intangible asset; however, significant implementation challenges persist, including the absence of standardized valuation mechanisms, limited institutional literacy, fragmented registration systems, and a lack of detailed execution procedures for handling default. In contrast, Malaysia’s Copyright Act 1987 restricts copyright transactions to ownership, assignment, and licensing—without any mechanism for creating or registering security interests—resulting in the inability of financial institutions to treat copyright as a viable collateral asset and limiting access to credit for creative-industry actors. Comparative analysis further demonstrates that Malaysia’s more structured IP commercialization ecosystem provides useful lessons for Indonesia, particularly in valuation expertise and institutional coordination, although Indonesia remains normatively superior due to its explicit statutory authorization. Overall, this study concludes that Indonesia’s legal framework provides substantial yet still evolving certainty for copyright-based fiduciary security, and recommends harmonizing regulations, establishing accredited valuation institutions, integrating copyright and fiduciary registries, and enhancing creditor–debtor protection mechanisms to optimize copyright’s role as a financial asset and strengthen the nation’s creative-economy financing landscape.