Monday, February 3, 2014

Non Payment of patent annuities in Indonesia

There is a curious wrinkle in Indonesia's patent laws about non payment of annuities. Article 115 of the Indonesian Patent Law says that in the event that annuities are not paid for 3 consecutive years, the patent will be deemed null and void. However, the outstanding annuities fees remain a debt to be paid to the State of Indonesia.  If the annuities remain unpaid, the Patent Office rules suggest a possible recovery of the debt through diplomatic channels against overseas patentees.

The easiest solution is to expressly abandon a patent; but many patentees take the simpler and cheaper route of non-payment. Technically such patents can be revived within 3 years. This creates the question whether a patentee is in fact liable if he fails to pay? Obviously revival would require payment of the past annuities. But there is a residual worry that Indonesia might try to enforce unpaid annuity fees against the patentees.

Indeed they have sent out letters stating that patents are in fact void. These have created confusion because it is unclear in the letters whether the patent is void from the date of non-payment, or as at the date of the letter. Article 115 suggests the former is correct but the letters suggest the latter.

It is a strange situation. Most patentees ignore the demand and allow patents to lapse when they are no longer needed. There is no actual instance of enforcement against such non-payment and one can hardly believe Indonesia would seek to become the only country in the world to do this.

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