Enacted in August 2001, the Indonesian Patent Law has served as the operative document governing the payment or non-payment of patent annuities to the Indonesian Patent Office for more than 13 years.

Yet recently, the Indonesian Patent Office has begun enforcing a little-known provision governing the non-payment of patent annuities. This provision concerns the so-called ‘passive abandonment’ of patents and has resulted in much confusion among patent holders, practitioners and even the Patent Office itself.

The provision at issue is Article 115(1) of the Indonesian Patent Law No. 14/2001, which states that if a patent holder does not pay the required annuity fees for a period of three consecutive years, the patent will then be deemed void starting from the end of the third year. Article 90 stipulates that a written request from the patent holder to the Patent Office is required to abandon a patent. However, this provision was not strictly enforced and the Patent Office routinely allowed parties to passively abandon their patents.

But over the past year or so, the Indonesian Patent Office has begun issuing letters to patent holders who sought to passively abandon their patents. These letters state that not only is the patent at issue null and void, but also that the unpaid annuities that accumulated over the three year period where the patent holder was in the process of abandoning its patent still need to be paid.

The English language version of these letters describes the unpaid annuities as a “debt.”

The legal justification for this position is based upon one sentence contained in the ‘Elucidation’ (otherwise known as the ‘Explanatory Notes’) to Article 115(1) of the Patent Law, which states: “Annual fees that are not paid in 3 (three) years are debt that must be paid by the Patent Holder.”

Numerous questions immediately present themselves, such as: How will this be enforced? If payment is made, does that revive the patent? What are the sanctions for non-compliance/non-payment and who would issue them?

The last question is particularly important as it appears that the pressure for the collection of these fees is coming not from the Indonesian Patent Office or the Directorate General of IP, but instead from the Ministry of Finance, which clearly has a different set of priorities and legal mechanisms at their disposal should they decide to force the issue.

Luckily, it appears as if this situation may be remedied in the not-too-distant future. The current draft of the revised Indonesian Patent Law would eliminate the obligation of the patent holder to pay the outstanding annuities when abandoning a patent.

If enacted, this would be a most welcome change, as it would add clarity and certainty to an unnecessarily confusing situation. However, a revised Act is not expected to be passed until 2015 at the earliest so for the time being, confusion may carry the day.