Outstanding Patent Annuities

The Indonesia Patent Office (IPO) is socializing the enforcement of Law No. 14/2001 on Patents especially provisions rrelating to unpaid annuity and patent abandonment.

The provision at issue is Article 115(1) of the Indonesian Patent Law No. 14/2001, which states that if a patent holder does not pay the required annuity fees for a period of three consecutive years, the patent will then be deemed void starting from the end of the third year.

Its Elucidation further states that “Void of Patent due to non-payment of annuity fees for 3 (three) consecutive years shall be notified in writing to the Patent Holder. Such notification shall include the date on which the Patent becomes void pursuant to this Article. Annuity fees that are not paid in 3 (three) years are debt that must be paid by the Patent Holder.”

Based on the foregoing, abandonment of a granted patent which is already in maintenance stage by allowing the deadline to pay the annuity to lapse is no longer deem adequate. Any intention of the patentee to abandon the granted patent needs to be formalized in the form of voluntary cancellation request to the IPO.

Please note that there should be no unpaid annuity for final and conclusive effects of Patent abandonments. Outstanding annuity fees are considered as debt that must be paid by the Patent Holder.

Although enforcement actions are worthy of support, unfortunately this has been more of an increasing concern. In fact, the “chase” for payment of outstanding annuities for abandoned Patents in Indonesia has become a major issue that has resulted in confusion, not only among Patent Holders, but also IP Practitioners.

This provision recently implemented by the Indonesian Patent Office (IPO) is not only not recognized by, and moreover synchronized with the practices in the majority of jurisdictions worldwide, but also not aware by many due to the lack of socialization on its predetermination by the IPO.

As to settlement procedures, there is yet further information pertaining to the prosecution of unpaid annuities beyond the prosecution at the IPO, including whether or not penalty will be applied for failing to comply with the notification letters. We understand that this issue is to be handled by another corresponding governmental body. However to the best of our knowledge, there is no precedent on such prosecution to date.

Going forward, we would strongly advise that abandonments are formalized by a written petition filed to the IPO. This is to avoid any costs which may occur for such abandonment to have permanent and conclusive effect thereto.

*This update is aimed at keeping our clients and associates informed of any IPR-related update in the country. Although we have tried to ensure the accuracy of information contained therein, it should however not be relied upon for any purpose without prior formal legal advice.