Unpaid Annuity Payments For Abandoned Patents in Indonesia Could Jeopardize Future Filings in Indonesia

In August 2016, a new amended patent law took effect in Indonesia which removed the obligation of patent owners to pay annuities on patents that lapsed through non-payment of earlier annuities.  However, despite this change, patent owners in Indonesia remain liable for any “annuity debt” that accrued under the old law.  Unless any such debts are settled in full by February 16, 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 simply by stopping annuity payments.  However, under the old Indonesian patent law (pre-2016), a patent could only be deemed abandoned, and no longer subject to annuity payments, if a patent owner submitted a request of abandonment to the DGIP. As such, patent owners who attempted to abandon their patents by non-payment of annuities without submitting an abandonment request still owe an obligation of annuity payment to the DGIP.

Indonesia’s New Patent Law Does Not Eliminate the Obligation of Annuity Payment Under the Old Law

On August 16, 2018, the DGIP issued a circular providing guidance with respect to the payment of outstanding patent annuities accrued under the old law.  The circular mandates that all patent owners should pay any outstanding annuities that have accrued by February 16, 2019.   Patent owners who fail to do so will face significant consequences.  Specifically, the DGIP has stated its intention to refuse any new patent application filings from patent owners who fail to satisfy their annuity payment obligation.  Essentially, such patent owners will be barred from obtaining patent protection in Indonesia from February 2019 on.

Additionally, it appears that the August 16th notice serves to clarify an earlier notice by the DGIP issued on December 28, 2017 which related to the revival of patents that were abandoned due to non-payment of annuities. In view of this 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 parties that infringed the patent rights during the lapsed period.  Patent owners will be able to take legal action against any parties infringing any patent rights after restoration.

Thus, although the DGIP approach may be a burden for patent owners, it could equally represent a win-win, whereby payment of outstanding annuities will secure future filing rights, and, if desired, restore lapsed patent rights.

Next Steps for Patent Owners

Guidance is not yet available on how the DGIP will screen new applications for outstanding annuities from an 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).  As a result, patent owners should carry out a review of their Indonesian patent portfolio to minimize the risk of a refusal in the future by confirming:

  • The status of all Indonesian patents in the patent register in the name of the patent owner;
  • Whether 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 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.

Please continue watch BRICS & Beyond for further updates on annuity payments in Indonesia.

This post was written by Lisa Mueller and Adam Denley, Desmond Tan and Karen Bentley of FPA Patent Attorneys.