It has come to our attention that the Indonesia Directorate General of Intellectual Property (DGIP) has recently started issuing formal notices to some patent owners, informing them that they have outstanding annuities and failure to pay the outstanding annuities within six months will result in the DGIP refusing new patent applications.
As a brief background, under the old Indonesian patent law (i.e. before 26 August 2016), annuities could be paid up to three years from the due date. If annuities were not paid within three consecutive years, the patent would be deemed null and void but a patent owner is still obligated to pay the outstanding annuities accrued during the three year period in view that the patent owner had technically benefited from the patent protection accorded to the patent owner during this period (which is regarded as a “post protection system”). The outstanding annuities would be deemed as being owed to the DGIP. This obligation is not applicable under the new law (i.e. with effect on or after 26 August 2016), because the new law provides for a “pre-protection system” such that a patent will be considered null and void if annuities are not paid by the due date without incurring any outstanding annuities.
We understand that a significant number of patent owners did not pay the outstanding annuities because they felt that this practice was unjustified and many adopted a “wait and see” approach until a formal mechanism to pay the outstanding annuities was established. To the best of our knowledge, Indonesia was the only country that adopted this practice of accruing annuities after the due date has passed.
When the old Indonesian patent law was in force, the DGIP actively sought payment of the outstanding annuities from patent owners. However, based on our observation, the DGIP was less active after the new law came into effect. It is only now that the DGIP has significantly stepped up its efforts in seeking payment, culminating in the issuance of these formal notices that included the statement that new applications will not be accepted until the outstanding annuities are paid up.
There is currently no official regulation on the refusal of new patent applications from patent owners with outstanding annuities. However, we understand that the refusal of new patent applications from patent owners with outstanding annuities will only take effect from February 2019.
We expect many issues to arise when the DGIP starts screening new applications for any outstanding annuities from the applicant. The most obvious issue is that the applicant paid all outstanding annuities but the DGIP inadvertently did not update their records and refuses the new application. Another potential issue is the applicant has every intention to pay the outstanding annuities but did not receive any formal notice regarding refusal of new patent applications and was not aware that there are outstanding annuities and proceeds to file a new application. This will obviously be a major concern if the applicant is informed that their new application has been refused after the filing deadline.
We hope the DGIP will provide more guidance on this issue soon.