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Licensing Agreement Template for Indonesia

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Key Requirements PROMPT example:

Licensing Agreement

I need a licensing agreement for a software product that will be distributed in Southeast Asia, with terms that include a 2-year license period, royalty payments based on sales volume, and provisions for technical support and updates. The agreement should also address intellectual property rights and include a termination clause for breach of contract.

What is a Licensing Agreement?

A Licensing Agreement lets you legally use someone else's intellectual property while they keep ownership of it. In Indonesia, these contracts commonly cover patents, trademarks, copyrights, and trade secrets under Law No. 28 of 2014 on Copyright and related IP regulations.

The agreement spells out exactly how you can use the property, what you'll pay for it, and how long the deal lasts. It protects both sides - the owner gets paid and maintains control, while the user gets clear permission to use valuable assets. Indonesian businesses often use these agreements for technology transfers, franchise operations, and software licensing.

When should you use a Licensing Agreement?

Use a Licensing Agreement when your business needs to legally use someone else's intellectual property in Indonesia. This includes situations like launching a franchise operation, distributing software, manufacturing products using patented technology, or selling merchandise featuring trademarked brands or characters.

The agreement becomes essential before starting any commercial activity using others' IP rights. For example, Indonesian tech companies need licensing agreements to use proprietary code in their applications, while manufacturers require them to produce goods using protected designs or processes. Getting these agreements in place early prevents costly legal disputes and ensures compliance with Indonesia's IP laws.

What are the different types of Licensing Agreement?

Who should typically use a Licensing Agreement?

  • IP Rights Holders: Creators, inventors, or companies who own valuable intellectual property and want to monetize it while maintaining control
  • Corporate Licensees: Businesses seeking to use protected IP, including manufacturers, software companies, and franchisees in Indonesia
  • Legal Counsel: Corporate lawyers or law firms who draft and negotiate Licensing Agreements to protect their clients' interests
  • IP Consultants: Specialists who help value intellectual property and structure licensing terms
  • Government Regulators: Officials from Indonesia's Directorate General of Intellectual Property who oversee IP registrations and enforce regulations

How do you write a Licensing Agreement?

  • IP Documentation: Gather proof of intellectual property ownership, registration certificates, and validity periods
  • Usage Parameters: Define exact scope of licensed rights, territories, and permitted modifications
  • Financial Terms: Calculate royalty rates, payment schedules, and minimum guarantees that work for both parties
  • Quality Control: Outline standards, inspection rights, and reporting requirements to maintain IP value
  • Duration Details: Specify agreement length, renewal options, and termination conditions
  • Compliance Check: Use our platform to generate a legally-sound agreement that meets Indonesian IP regulations and local business practices

What should be included in a Licensing Agreement?

  • Parties & Capacity: Full legal names, addresses, and proof of authority to enter agreement
  • IP Description: Detailed specification of licensed intellectual property and registration details
  • License Scope: Clear terms on usage rights, territory, and any restrictions under Indonesian IP laws
  • Payment Terms: Royalty rates, payment schedules, and currency specifications
  • Duration & Renewal: Agreement period, extension options, and termination conditions
  • Quality Control: Standards maintenance, inspection rights, and reporting requirements
  • Dispute Resolution: Choice of Indonesian law, jurisdiction, and arbitration procedures
  • Signature Block: Space for authorized signatures, company stamps, and witness details

What's the difference between a Licensing Agreement and an Assignment Agreement?

A Licensing Agreement differs significantly from an Assignment Agreement in Indonesian business law. While both deal with intellectual property rights, they serve fundamentally different purposes and have distinct legal effects.

  • Ownership Transfer: Licensing Agreements maintain original ownership while granting usage rights; Assignment Agreements permanently transfer all ownership rights to the assignee
  • Duration: Licenses typically have specific time limits and renewal options; Assignments are permanent and irreversible
  • Control Rights: Licensors retain quality control and usage restrictions; Assignees gain complete control over the assigned property
  • Payment Structure: Licenses usually involve ongoing royalties or periodic payments; Assignments typically require one-time payment for complete transfer
  • Legal Requirements: Under Indonesian IP law, licenses can be registered but remain revocable; assignments must be formally recorded with the IP office for permanent effect

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