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Commercial Licensing Agreement for Indonesia

Commercial Licensing Agreement Template for Indonesia

A comprehensive legal document governed by Indonesian law that establishes the terms and conditions under which intellectual property rights are licensed from one party (licensor) to another (licensee). This agreement addresses key aspects including license scope, territory restrictions, payment terms, quality control measures, and compliance with Indonesian regulations, particularly the relevant IP laws and competition regulations. It includes provisions for protecting intellectual property rights, ensuring proper commercial exploitation, and managing the ongoing relationship between parties while adhering to Indonesian legal requirements and business practices.

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What is a Commercial Licensing Agreement?

The Commercial Licensing Agreement serves as a crucial legal instrument for businesses operating in Indonesia who wish to grant or receive rights to use intellectual property. This document is essential when one party owns valuable intellectual property (such as patents, trademarks, copyright, or trade secrets) and wishes to permit another party to use these rights under specific conditions while maintaining ownership. The agreement must comply with Indonesian intellectual property laws, including Law No. 13 of 2016 on Patents, Law No. 28 of 2014 on Copyright, and Law No. 20 of 2016 on Trademarks and Geographical Indications. It's particularly important for foreign companies entering the Indonesian market, technology transfer arrangements, and local businesses expanding their operations through licensing partnerships. The document typically includes detailed provisions on commercialization rights, quality control, payment structures, and territorial restrictions, all within the framework of Indonesian law and business practices.

What sections should be included in a Commercial Licensing Agreement?

1. Parties: Identification of the licensor and licensee, including full legal names, registration numbers, and registered addresses

2. Background: Context of the agreement, brief description of the parties' business, and purpose of the licensing arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Grant of License: Scope and nature of the license (exclusive/non-exclusive), territory, and permitted uses

5. License Fees and Payment Terms: Financial terms, including royalty rates, payment schedules, and calculation methods

6. Protection of Intellectual Property Rights: Provisions for protecting the licensed IP, including registration, enforcement, and infringement procedures

7. Quality Control: Standards and specifications for licensed products/services, inspection rights, and quality assurance requirements

8. Representations and Warranties: Parties' assertions regarding their authority, IP ownership, and other material facts

9. Term and Termination: Duration of the agreement, renewal options, and grounds for termination

10. Post-Termination Obligations: Rights and obligations of parties after agreement ends

11. Confidentiality: Protection of confidential information exchanged during the agreement

12. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

13. General Provisions: Standard clauses including notices, assignment, and entire agreement

What sections are optional to include in a Commercial Licensing Agreement?

1. Sub-licensing Rights: Include when licensee is permitted to grant sub-licenses to third parties

2. Technology Transfer: Include when agreement involves transfer of technical knowledge or training

3. Minimum Performance Requirements: Include when setting minimum sales or performance targets for licensee

4. Export Controls: Include when licensed products/technology are subject to export regulations

5. Source Code Escrow: Include for software licensing agreements where source code protection is needed

6. Local Content Requirements: Include when compliance with Indonesian local content regulations is required

7. Competition Compliance: Include detailed competition law compliance provisions for high-value or market-dominant licenses

8. Insurance: Include when specific insurance coverage is required for licensed activities

What schedules should be included in a Commercial Licensing Agreement?

1. Schedule 1: Licensed Intellectual Property: Detailed description of all IP being licensed, including registration numbers

2. Schedule 2: Technical Specifications: Technical details, standards, and requirements for licensed products/technology

3. Schedule 3: Royalty Calculations: Detailed methodology for calculating royalties and other fees

4. Schedule 4: Quality Control Procedures: Specific quality control requirements and testing procedures

5. Schedule 5: Approved Sub-contractors: List of approved manufacturers or service providers (if applicable)

6. Appendix A: Brand Guidelines: Guidelines for using licensed trademarks and branding elements

7. Appendix B: Territory Map: Detailed definition of licensed territory with maps if applicable

8. Appendix C: Reporting Templates: Standard forms for required periodic reports and royalty statements

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Document Type

License Agreement

Cost

Free to use

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