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NON-PAYMENT OF OUTSTANDING ANNUITY OBLIGATIONS IN INDONESIA WILL RESULT IN THE REGISTRY’S NON-ACCEPTANCE OF NEW PATENT FILINGS FROM THE SAME PROPRIETOR

On 16 August 2018, the Directorate General of Intellectual Property (DGIP) issued a Circular requiring payment of all outstanding annuities due before 26 August 2016 (the enforcement date of the new Indonesian Patents Law) in respect of abandoned patent cases. This payment is to be made within six (6) months from the date of issuance of the present Circular (i.e. by 15 February 2019).

If Patent Holders do not comply with this requirement, the DGIP will no longer accept any new patent filings from the same Patent Holders until their entire annuity fee debts are settled.

Prior to 26 August 2016, back taxes had to be paid within one (1) year from the date of grant of patent with a grace period of three (3) years. If the Patent Holder passively abandons the patent after grant, he would still be responsible to pay the back taxes including the annuities and penalties accumulated within the 3-year grace period. On the other hand, if the Patent Holder actively abandons the patent, he would still be responsible to pay the back taxes and annuities accumulated up to the official abandonment date. Since this practice was not consistent with other jurisdictions’ practices, several Patent Holders had accumulated unpaid annuities until this law was changed on 26 August 2016.

In an effort to clear their 2016-2017 Financial Statements, the DGIP now requires Patent Holders with outstanding annuity debts before 26 August 2016 to settle all their dues for their abandoned patent cases (whether actively abandoned by them or declared void by law) within the 6-month period following the date of issuance of the present Circular. It seems that the DGIP has taken an extreme position on this issue. Thus, failure to settle all outstanding annuity fees by the deadline set by the DGIP would have grave repercussions as mentioned above.

In view thereof, we urge the Patent Holders to attend to the payment of the outstanding annuities by the aforementioned deadline of 15 February 2019 to avoid any undesirable consequences such as the non-acceptance of new patent filings from the same Patent Holders by the Registry of DGIP.

For more information on this matter, please feel free to write to us at postgrant@mirandah.com.

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