You have a license agreement. Is signing it enough to protect your rights? A signed agreement sets out the rights and obligations between the parties, but in Indonesia, signing a license agreement is not necessarily the final step.

 

Businesses are required to record their license agreements with the Ministry through the Directorate General of Intellectual Property (Direktorat Jenderal Kekayaan Intelektual or “DJKI”). Recording the agreement can help protect the rights granted under the license, particularly when third parties become involved. It can also help businesses avoid potential legal risks that may arise if the agreement is not properly recorded.

 

The following are key points businesses should know about recording license agreements in Indonesia.

 

What Is a License Agreement?

A license agreement is an agreement that allows the owner of intellectual property (“IP”) to give another party permission to use or commercialize the IP under agreed terms and conditions. The license can be exclusive or non-exclusive. An exclusive license gives one licensee the sole right to use or commercialize the IP within the agreed scope, while a non-exclusive license allows the IP owner to grant the same rights to other parties.  Regardless of the type of license, ownership of the IP remains with the IP owner.

 

There are two main parties involved: (i) the licensor, who grants the license; (ii) the licensee, who receives the rights to use the IP. The agreement sets out, among other things, the scope of the rights granted, the permitted use of the IP, and the duration of the license. Under Government Regulation Number 36 of 2018 on Intellectual Property License Agreements, a license agreement must at least include the following information:

1. the date and place of signing;
2. the names and addresses of the licensor and licensee;
3. the IP covered by the license;
4. whether the license is exclusive or non-exclusive and whether sublicensing is allowed;
5. the duration of the license;
6. the territory where the license applies; and
7. for patent licenses, which party is responsible for paying the annual patent fee.

What Can Be Recorded and Who Can Apply?

License agreements covering various types of intellectual property can be recorded, including copyright and related rights, patents, trademarks, industrial designs, layout design of integrated circuits, trade secrets, and plant varieties.

 

The application can be submitted by the licensor, the licensee, or their authorized representative. If the licensor or licensee is a foreign national or is domiciled or permanently established outside Indonesia, the application must be submitted through an authorized representative.

 

Can a License Agreement Cover Multiple Intellectual Property Rights?

A single license agreement can cover multiple intellectual property rights. This allows the parties to include different IP rights in one agreement where they are part of the same licensing arrangement.

 

However, the recording application may need to be submitted separately depending on the types of intellectual property covered. For copyright or related rights, one application can cover multiple works or titles involving the same type of intellectual property.

 

What Documents Are Required?

The applicant must provide the following documents to record the license agreement:

1. application letter for recording the license agreement;
2. the license agreement;
3. official extract or proof of ownership of the licensed IP, such as a patent, trademark, industrial design, or integrated circuit layout design certificate, or proof of ownership of copyright, related rights, or trade secrets. The relevant IP rights must still be valid;
4. power of attorney, if the application is submitted through an authorized representative; and
5. proof of payment of the applicable recording fee.

How Does the Recording Process Work?

The recording process generally involves the following steps.