2013 has become a notable year for patent prosecution practice in Indonesia in that DGIPO started to implement the Patent Law no. 14 of 2001 concerning revocation of patent by operation of law due to failure of paying annuities and patentee's obligation to settle the outstanding annuities (see the news here). In 2014, this issue is still ongoing without any foreseeable conclusion about the sanction over the failure to settle said outstanding annuities.

Indonesian patent law no. 14 of 2001 regulates that:

• Article 88:
  A patent shall be deemed null and void if the patent holder does not fulfill his obligation to pay the annual fees within the period stipulated under this law.
• Article 116 (2):
  The late payment of annual fees as referred to in paragraph (1) shall be notified in writing by the Directorate General to the patent holder within 7 (seven) days after the stipulated time limit has passed.
• Article 115 (1):
  If within 3 (three) consecutive years a patent holder has not paid the annual fees as stipulated in Article 18 and Article 114, the relevant patent shall be deemed void commencing from the date constituting the time limit for the payment for the third year.
• Article 89 (1):
  The revocation of a patent by operation of law shall be notified in writing by the Directorate General to the patent holder and the licensee and shall be effective as of the date of notification.

Using the Articles 115 (1) and 88 as basis, patentees who no longer put interests in their patents decided to abandon the patents and let them to lapse without being aware of the provision stipulated in the elucidation of the Article 115 (1) that the outstanding annuities incurred during the 3 years and the surcharges are considered as debt which must still be paid to DGIPO. Meanwhile, DGIPO failed to send reminders to the patentees to pay the outstanding annuities as stipulated in Article 116 (2). DGIPO also failed to notify patentees about revocation of the abandoned patents as stipulated in Article 89 (1). DGIPO began to send reminders to patentees to pay the outstanding annuities and issue revocation notification following to subsequent reminders around June 2013. However due to their failure in complying with Articles 116 (2) and 89 (1), DGIPO considers that the abandoned patents, including the ones which annuities have not been paid for more than 3 years, may become valid again if the patentees pay all outstanding annuities along with the surcharges.

The reminders sent by DGIPO received positive feedback from some patentees as they agreed to pay their debts, but many patentees responded by questioning the sanction over the failure to comply with the obligation to pay the debts. DGIPO states that after issuing revocation letters, they will forward information about the unsettled debts to the Ministry of Finance for debt collecting purposes. The debt collection mechanism is not yet regulated.

If you or your clients have any patents abandoned for more than 3 years and have received letters from DGIPO inviting you or your clients to pay outstanding annuities, we recommend you to settle the annuities so they can close their files. For patents abandoned less than 3 years, we recommend that you file a voluntary cancellation request in order to prevent the incurrence of further annuities as well as the surcharges and settle all outstanding annuities for they are considered as debts which must be paid.

If you or your clients have any abandoned pending patent applications which are now under substantive examination phase, it is recommended that you or your clients file a withdrawal request in order to avoid automatic grant because unlike in some other countries, patent application granting process in Indonesia does not require applicant's prior confirmation. The examiner may grant a patent application whenever he/she considers that the application meets national patentability requirements, with or without issuing an office action beforehand. Once the application is granted, the back-dated annuities must be paid.

Please feel free to contact us should you or your clients need further assistance or have any queries related to outstanding annuity payment and/or voluntary cancellation.