Indonesia Update: Clarification of annuities payments under new Patent Law

Following the enactment of Indonesia’s Law No. 13 of 2016 on Patents (the “New Law”), the Directorate of Patent at the IP Office has issued a Circular Letter No. HKI.3-08.OT.02.02 (“Circular Letter”) to address some of the issues / lack of clarity concerning payment of annuities, in particular with respect to the relevant transitional period.

In the Circular Letter it is confirmed that:

• a. For annuities which have not been paid and have been due before the enactment date of the Patent Law (i.e. 26 August 2016), the procedure and calculation of annuities and the relevant penalties will be based on the provision of Article 114 of Law No. 14 of 2001 on Patent (the “Old Law”).
• b. For annuities which have not been paid and are due after the enactment date of the Patent Law, the procedure and calculation of annuities and the relevant penalties will be based on the provisions of Article 126 of the New Law.
• c. For payment of annuities which are due after the enactment date of the Patent Law, and those that are due during the period of 26 August 2016 until 30 December 2016, the Patent Holder is given the chance to attend to the payment of annuities of the ongoing year as well as unpaid annuities for the following years (for the period of 2016 and 2017). These payments must be made at the latest on 30 December 2016.
• d. If a Patent holder does not pay the annuities as referred to in point c, based on the provision of Article 134(1) of the Patent Law, the relevant Patent will be deemed void and invalid.

We have provided a number of example scenarios below to further explain the annuity payments during the transitional period and based on the New Law.

Scenario 1

A Patent has a filing date of 1 April 2013. The Grant Date is 25 August 2016.

The calculation of annuity payments would be:

The grant date of 25 August 2016 is within the protection period of Year 4. The first annuity would have accumulated annuities for the protection period of 1 April 2013 until 31 March 2017. Based on the Circular Letter (in particular point c), the first annuity has to be paid at the latest on 30 December 2016.

For subsequent annuities, e.g. payment for Year 5 (the protection period of 1 April 2017 –  31 March 2018), payment has to be made by at the latest 1 March 2017 (one month before the anniversary of the filing date). For Year 6, payment has to be made, at the latest, by 1 March 2018 (one month before the anniversary of the filing date).

For the subsequent payment of annuities, the Patent Office will consider 1 month as 30 (calendar) days.

Scenario 2

A Patent has a filing date of 1 April 2011. The Grant Date is 5 January 2014.

The calculation of annuity payments would be:

For the first annuity and the Year 4 annuity, payment will be based on Law 14/2001 as follows:

a. First time annuities covering Year 1 to Year 3 (for the period of 1 April 2011 – 31 March 2014), would need to be made at the latest on 4 January 2015 (based on the Old Law).

b. For payment of Year 4 (for the period of 1 April 2014 – 31 March 2015), the payment will need to be made at the latest on 5 January 2016 (based on the Old Law).

With respect to payment of Year 5 (for the period of 1 April 2015 – 31 March 2016) and payment of Year 6 (for the period of 1 April 2016 – 31 March 2017), the payment will need to be made at the latest on 30 December 2016 (based on letter c of the Circular Letter).

Afterwards, payment of annuities for Year 7 onwards will be based on Law 13/2016, i.e. one month before the anniversary date of the filing date.

a. For payment of Year 7 (for the period of 1 April 2017 – 31 March 2018), the payment will need to be made at the latest on 1 March 2017.

b. For payment of Year 8 (for the period of 1 April 2018 – 31 March 2019), the payment will need to be made at the latest on 1 March 2018. 

For the subsequent payment of annuities, the Patent Office will consider 1 month as 30 (calendar) days.

Scenario 3

A Patent has a filing date of 1 April 2014. The Grant Date is 5 January 2017.

The calculation of annuity payments would be:

The grant date of 5 January 2017 is within the protection period of Year 3. Therefore, the accumulated payment would be for the protection period of 1 April 2014 to 31 March 2017, plus in accordance to Article 126 of the New Law, the patent holder will have to attend to payment for Year 4 (protection period of 1 April 2017 –  31 March 2018) altogether by 4 July 2017, at the latest 6 months after the grant date (however payment for the accumulated annuities would need to be made one day before the same date of the Grant Date. This adopts the same practice as payment of the accumulated annuities under the Old Law).

For payment for the Year 5 (for the protection of 1 April 2018 – 31 March 2017), payment has to be made 1 March 2018 (one month before the anniversary of the filing date). For Year 6, payment has to be made by 1 March 2019 (one month before the anniversary of the filing date).

For the subsequent payment of annuities, the Patent Office will consider 1 month as 30 (calendar) days.

Please be advised that failing to pay the back annuities for a patent granted on or after 26 August 2016 will not result in the unpaid annuities being considered debt. The patent will automatically be deemed nullified.

If you need further clarification or more information on any of the above, please don’t hesitate to contact us.