November 22, 2016

Annuity Payments Under Indonesia’s New Patent Law

Informed Counsel

Indonesia’s new Patent Law, which was enacted on August 26 of this year changes how annuity payments are calculated. Annuity payments are now due at the beginning of the protection period, in order to receive protection for the following period. This change from the past system, under which annuity payments were due at the end of each protection period, left patent owners with many questions about how their payments would be impacted under the new law.

The Directorate General of Intellectual Property Rights in Indonesia has issued a new circular that clarifies how the authorities will handle annuity payments for patents that were granted before the enactment of the new Patent Law. All owners of existing Indonesian patents will need to make additional annuity payments before the end of this year to ensure compliance.

Under the circular, any unpaid annuities for patents registered before August 26 of this year, which are due on or after this date, must be paid according to the rules set out in the new Patent Law. The circular sets up a transitionary period for payments to be made between August 26 and December 30, 2016, for annuity payments that cover 2016 to 2017. Failure to submit an annuity payment by December 30 will result in the patent being cancelled. Critically, this means that all patent owners who want to maintain their patents must pay an annuity by December 30, 2016.

There are three important scenarios for patent owners to consider regarding annuity payments. The first scenario is a patent application that was granted before August 26, 2016. The table below is an example of calculations of payment deadlines under the circular.   

In the table above, the annuity payment of year 10 for the protection period of 2016 to 2017, which was formerly due on December 13, 2017, is now due on December 30, 2016. The annuity payment should be paid before the protection period begins.

Subsequent payments that are due in accordance with the new Patent Law are shown in the following table.

The annuity payments must now be paid one month before the start of the corresponding protection period. The annuity payments must be concluded prior to the end of the 19th year of the protection period. If the applicant is not able to pay the annuity by the deadline, a request for extension must be filed within seven working days before the deadline. The extension will incur a 100 percent penalty fee. If an extension is not filed, the patent would be cancelled.

The second scenario involves a patent granted before August 26, 2016, for which annuities have not yet been paid and are due for 2015 to 2016, as shown in the table below.

If the annuities in years 1 to 5 are not paid by December 30, 2016, the patent will be cancelled. Subsequent payments are due one month before the end of the protection period—in this case, August 20 of every year until 2029.

The third scenario involves a patent granted after August 26, 2016. Annuity payments will follow the new Patent Law, per the table below.

Subsequent payments are due one month before the end of the protection period—in this case, August 20 of every year until 2029.

In light of the changes, every owner of an Indonesian patent should urgently review their patent portfolio to assess the annuity payments that need to be made, in order to ensure that their granted patents are not cancelled under the new law.

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