Client Alert: Indonesian IP Office Plans to Reject Future Patent Applications Based on Unpaid Annuities

Jun 17, 2019

For the first time, the Indonesian Intellectual Property Office (DGIP) has publicly detailed a plan to reject patent applications by applicants who have ‘outstanding annuities’ due to the Indonesian government. As detailed below, this represents a marked escalation of tactics by the Indonesian government to try to collect these annuity payments and poses serious questions for patent holders going forward.

In a letter dated 16 August 2018 and sent to Indonesian IP firms and IP Consultants in October 2018, Director General of Intellectual Property Dr. Freddy Harris detailed the plan to deny/reject all future applications filed by applicants who, according to the IP Office’s records, within six months have not paid off all of the ‘outstanding debt’ incurred through the previous non-payment of patent annuities. Specifically, the letter seeks to enforce Articles 88 and 115 of the previous Indonesian Patent Law of 2001 (as well as its Explanatory Notes), which stated that while abandonment of granted patents could be achieved through the non-payment of annuities for three consecutive years, those unpaid annuities would still be considered a ‘debt’ owned to the Indonesian government by the patent holder.

Despite this, many patent owners choose to abandon their patents in this way, as these provisions had never been previously enforced. Then, during the past 3-4 years, the DGIP began attempts at collecting on this ‘debt’, primarily consisting of sending letters to the patent holders and their agents of record informing the holders of their obligation to pay this ‘debt’. No penalty or punishment for continued non-payment had ever been included in such letters.

Now, the DGIP has for the first time chosen a method of enforcement by adopting the stance that patent applicants who have not paid all of their ‘outstanding debt’ from non-payment of annuities by 16 February 2019 will have their future patent applications ‘rejected’. The letter does not mention in detail how this will happen and/or at what stage such rejection will be made and/or whether appeals of such rejections will be allowed (e.g., in the case of incomplete/incorrect records at the DGIP with regards to annuity payments). Further, the letter does not provide a legal basis for this new policy.

Regardless, patent holders should immediately move to confirm with the Indonesian Patent Office and/or local counsel whether there are any outstanding patent annuities in their name that may prevent them from filing new Indonesian patent applications in the future.

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Januar Jahja & Partners (JJP) is a boutique IP firm based in Jakarta, Indonesia with more than 30 years experience in all aspects of Indonesian patent law, especially patent prosecution and annuity maintenance. For any questions relating to the above Client Alert or about patent matters in general, please contact us at januar@jahja.com. For more information, please visit www.jahja.com.

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