Indonesian Patent Office clarifies patent annuity ambiguities

Date: 2018-11-05
Authors: Desmond Tan & Karen Bentley

Despite a new law in August 2016 removing the obligation on patent owners to pay annuities on patents that lapse through non-payment of earlier annuities, patent owners in Indonesia are still liable for any ‘annuity debt’ that accrued under the old law. Unless any such debt is settled in full by 16 February 2019, the Directorate General of Intellectual Property (DGIP) will refuse to accept any new patent applications from that patent owner.

Background

In many jurisdictions it is possible to abandon a patent by simply stopping the annuity payments.

Under the old Indonesian patent law however, a patent could only be deemed abandoned, and no longer subject to annuity payments, by the patent owner submitting a request of abandonment to the Directorate General of Intellectual Property (DGIP). As such, patent owners who attempted to abandon their patents by non-payment of annuities without submitting the abandonment request still owed an obligation of annuity payment to the DGIP. 

The new law doesn't eliminate the old law obligation

On 16 August 2018, the DGIP issued a circular providing guidance in relation to the payment of outstanding patent annuities accrued under the old law.

This circular mandates that all patent owners should pay any outstanding annuities that accrued by 16 February 2019. If this is not carried out the DGIP has stated an intention to refuse to accept new patent applications from those patent owners, essentially barring them from obtaining patent protection in Indonesia from February 2019 onwards. 

We believe that the latest notice also serves to clarify an earlier notice by the DGIP issued on 28 December 2017 which related to the revival of patents that were abandoned due to non-payment of annuities. In view of the latest notice, it appears that old patents can be revived if the payment of outstanding annuities is accompanied by a request to revive the patent and a declaration by the patent owner stating that they will not take any legal action against any other parties that infringed the patent rights during the lapsed period.

So while the DGIP approach may be a burden for some, it could equally represent a win-win for patent owners, whereby payment of outstanding annuities secures future filing rights, and, if desired, restores lapsed rights.   

What you need to do

We do not yet have guidance on how DGIP will screen new applications for outstanding annuities from the applicant, the process for refusal of a new filing, and what (if any) grounds an applicant has to object to the refusal - particularly if the filing deadline has passed.

Accordingly, we are working with patent owners to carry out a review of their Indonesian patent portfolio to minimise the risk of a refusal in the future by confirming:

  • the status of all Indonesian patents in the patent register in the patent owners name;
  • if abandonment requests were submitted for abandoned patents;
  • that the Indonesian patent register is up to date and correct in respect of their patents; and
  • whether any of the abandoned patents are worth reviving.

For patent owners with high amounts of unpaid annuities, it may be prudent to undertake a cost-benefit analysis and to ascertain if Indonesia remains a country of commercial value to seek patent protection in the future. If you are in this position, contact us for specific advice.