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Be Aware of Patent Annuity Payment Debt in Indonesia

Some of foreign clients raised questions about the current situation in our country relating with abandonment of a patent right and obligation for annual fee payment. Some of them now receiving invoices from the Indonesian IP Office (DGIP), directly to their address. What happened to our system, particularly to the annuity payment procedure? We would share here shortly about our insights.


Obligation for paying patent annual fees may vary among countries. While in some certain countries patentee or applicant will be charged for annual payment during the first 3 years as of filing and so forth, in Indonesian practice, the annual fee payment and procedure for abandonment (revocation) of a patent right may be somewhat more complicated.

The patentee could begin to pay the “back fees” as soon as the invention granted a patent and the notice of allowability is issued by Indonesian IP Office (Directorate General of Intellectual Properties, DGIP). “Back fees” is accumulation of maintenance fees covering the whole prosecution years counted from the first year up to the year of granting. There is one year grace period from granting date and thus deadline (to pay back fees) will fall on the first anniversary of said granting date.

Special attention should paid on the fact that penalty is to be imposed if the patentee fail to meet the prescribed deadline of annual payment, namely 2,5% surcharge per every running-month after the deadline. Neglecting the deadline shall render the overburden of extra-invoice to the patentee.

The other provisions on patent rights in Indonesia which patentees need to know, among others, are:

  1. If patentee fails to attend the payment for 3 consecutive years, the patent will be considered null or void but the unpaid fees are still considered as debt.
  2. If patentee voluntarily abandons its patent right (by submitting a written request before the DGIP),  then the patent will be considered null or void, and the future invoice will be stopped, but the unpaid fees are still considered as debt.

Kindly note that in a formal revocation or abandonment of a patent, beside a written request and receipt of last payment (to show that you are debt-free), the patentee must also attach a written consent from any party involved in relevant patent licensing (i.e. licensee), since the revocation of such patent will definitely impose legal impacts to the time period and other terms (like royalty arrangement) of the said licensing.

Still relates to the above provision, particularly to point  a), there is another provision for the patentees to pay simultaneously the annuity fees for the last 3 years of protection period (namely 18th,19th & 20th annuity year) at the time of paying for the 18th year.

Refer to above provision b), an accident would necessarily occur whenever the patentee lost interest in maintaining its patent, but only stop paying annual fees without submit an official request in writing to revoke the patent right. From the view of current guideline, such patentee would inadvertently generate a debt, since it does not turn-off the “counting machine” for annual payment invoice.

Government relies on the principle that protection for a patent right in fact has been given by the State as soon as said application was filed, even if said application has not been granted (i.e. should undergo and pass a substantive examination). Also, during in pending status, the existence of said application  (particularly claims) may prevent other party to claim similar features or to commercialize them. The Govt. considers it is reasonable to compensate such protection by payment of annual fees.

Then the keyword here would be “debt” derived from unpaid and belated payment. Since the beginning of patent system being applied in the country before 1990 until end of year 2010, most of local practitioners were thinking simply that abandonment of a granted patent is a usual practice and will have no impacts on the financial or legal aspects. But later, since early of 2011, patent abandonment has been a bit complicated matter. DGIP is of the opinion that, if the patentee submit a request for abandonment and then unwilling to pay the protection fee, then the patentee considered as committed to a lost debt.

For those foreign patentees who already appoint their local agent or representative attorney, the  reminder of unpaid invoice was sent by DGIP to such local reps. Otherwise, DGIP delivers the invoice directly to the patentee’s address overseas.

In sum, each patentees must be aware of the Indonesian rule regarding annual payment for patent. If they intend to revoke the patent, there are some procedures that should be taken into consideration, to prevent any unnecessary burden or even harmful effects to their IP assets as well as business interests in general.