Understanding Patent Abandonment Rules in Indonesia
16 December 2015
When a patent owner desires to abandon a patent, usually they simply do so by non-action, i.e. by stopping payment of the annuity fees. However, the same may not be true in Indonesia, and this has now become one of the most debated subjects among IP practitioners in this territory.
The relevant provisions are Articles 39, 88, 90 and 115 of Patent Law No. 14 of 2001:
Article 39
(1) A patent application may be withdrawn by submitting a written request to the Directorate General.
(2) Further provisions concerning the withdrawal of an application shall be regulated by a Presidential Decree.
Article 88
A patent may be declared as canceled by operation of law if the patent holder does not fulfill his obligation to pay the annual fees within the period stipulated under this Law.
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 declared to be canceled by operation of law on the date constituting the time limit for the payment for the third year.
(2) In the event the failure to meet the obligation regarding the payment of annual fees concerns the payment of annual fees for the eighteenth and subsequent years, the relevant patent shall be deemed void on the time limit for the payment of annual fee for the relevant year.
(3) The revocation of a patent on the grounds as referred to in paragraphs (1) and (2) shall be recorded and published.
In general, annuity fees in Indonesia may be paid within three years or 36 months. Late payment charges will be imposed if the fees are paid within the 13th to the 36th month.
Based on the above regulations, the non-payment of annuity fees within the three year period will cause the patent to become null and void. However, if no action is taken by the patent owner, the unpaid annuity fees for three consecutive years must be settled because the patent remains in force during the period for payment of the annuity fee. Thus, in the event three consecutive annuity fees are not paid by the patent owner, the patent will be considered null and void by law. However, the patent owner has an outstanding obligation to settle the annuity fees and late payment charges corresponding to the three years that the patent has remained in force.
To prevent the unexpected accumulation of unpaid annuity fees and late payment charges, it is recommended that a request for abandonment be filed with the Indonesia Patent Office, if it is indeed the intention of the patent holder to abandon a registered patent. It is also recommended that the request for abandonment be filed before the end of the relevant protection period in order to prevent payment of the annuity fees for the succeeding years.
For example, if a patent was filed on December 16, 2008, and granted on March 13, 2013, and the patent holder wishes to abandon the patent at this time, provided all back taxes have been paid, the request for abandonment must be filed by December 15, 2015, so that the patent owner only has to pay the seventh year annuity fees. If the request for abandonment is filed between December 16, 2015, and December 15, 2016, the patent owner has the obligation to pay the annuity fees for the seventh and eighth year protection periods. Further, if no annuity fee payment is made starting from the seventh year protection period, the patent will be deemed null and void by March 13, 2018, and the annuity for the seventh, eighth and ninth year protection periods will remain payable by the patent holder.
The DGIP sends a total of three notices. If there is no settlement of the outstanding annuity fees, the matter will be endorsed to the Ministry of Finance of the Republic of Indonesia as a debt collection matter with a further penalty of 10% of the total amount due.
In other words, abandonment by non-payment or non-action on the part of the patent owner will only lead to outstanding annuity fees that will later be considered a debt even when the relevant patent is deemed null and void by law.
While the Indonesia Patent Law has been in force since 2001, it is only in recent years that the Directorate General of Intellectual Property Rights (DGIP) started sending notices of nonpayment of annuity fees directly to patent owners. Thus, in 2013, patent owners started receiving notices to settle outstanding annuity fees for patents that have been abandoned a long time ago.
Until the law is changed, patent owners are well advised to follow the rules of patent abandonment in Indonesia. Otherwise, patent owners may find themselves owing the Government of Indonesia for accumulated annuity fees and late payment charges.
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