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Software Royalty Agreement for Indonesia

Software Royalty Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes the terms and conditions under which a software owner (licensor) grants rights to use and commercially exploit their software in exchange for royalty payments. The agreement complies with Indonesian Copyright Law No. 28 of 2014 and related regulations, addressing key aspects such as licensing scope, payment terms, reporting requirements, and intellectual property protection. It includes specific provisions for technology transfer and cross-border transactions in accordance with Indonesian investment laws, while incorporating necessary tax and regulatory compliance elements for software licensing arrangements.

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What is a Software Royalty Agreement?

The Software Royalty Agreement serves as a critical legal framework for software licensing transactions in Indonesia, establishing the commercial relationship between software owners and those seeking to use or distribute their software. This document is essential when a software owner wishes to monetize their intellectual property through a royalty-based model while retaining ownership rights. It must comply with Indonesian legal requirements, particularly the Copyright Law No. 28 of 2014 and electronic transaction regulations. The agreement covers crucial elements such as license scope, royalty calculations, payment terms, territorial restrictions, and compliance with local technology transfer regulations. It's particularly important for cross-border transactions where foreign software owners license their products to Indonesian entities, requiring careful consideration of Indonesian investment laws and tax regulations.

What sections should be included in a Software Royalty Agreement?

1. Parties: Identifies and provides full details of the licensor and licensee, including registration numbers and addresses

2. Background: Establishes the context of the agreement, including ownership of the software and intention to license

3. Definitions: Defines key terms used throughout the agreement, including technical terms, 'Software', 'Intellectual Property Rights', 'Territory', and 'Net Sales'

4. Grant of Rights: Specifies the scope of the license, including territory, exclusivity, and permitted uses of the software

5. Royalty Payments: Details the royalty calculation method, payment frequency, currency, and payment mechanisms

6. Reporting and Audit Rights: Establishes licensee's obligations for sales reporting and licensor's audit rights

7. Intellectual Property Protection: Confirms ownership of IP rights and obligations regarding protection and enforcement

8. Confidentiality: Defines confidential information and parties' obligations regarding its protection

9. Term and Termination: Specifies agreement duration, renewal terms, and grounds for termination

10. Post-Termination Obligations: Outlines obligations and rights of parties after agreement termination

11. Representations and Warranties: States parties' warranties regarding authority, ownership, and software functionality

12. Governing Law and Dispute Resolution: Specifies Indonesian law as governing law and outlines dispute resolution process

13. General Provisions: Includes standard clauses like force majeure, notices, and assignment rights

What sections are optional to include in a Software Royalty Agreement?

1. Source Code Escrow: Required when source code access needs to be guaranteed under specific conditions

2. Localization Rights: Needed if the licensee will translate or adapt the software for local market

3. Maintenance and Support: Include if the licensor will provide ongoing technical support and updates

4. Minimum Performance Requirements: Used when setting minimum sales or revenue targets for licensee

5. Sub-licensing Rights: Include if licensee is permitted to sub-license the software

6. Export Control: Required for software with international distribution restrictions

7. Data Protection: Necessary when software processes personal or sensitive data

8. Insurance Requirements: Include when specific insurance coverage is required from either party

What schedules should be included in a Software Royalty Agreement?

1. Schedule A - Software Description: Detailed technical specifications and functionality of the licensed software

2. Schedule B - Royalty Rates: Detailed breakdown of royalty rates, including any volume-based variations

3. Schedule C - Territory Definition: Specific geographical areas or markets covered by the license

4. Schedule D - Reporting Template: Standard format for periodic sales and royalty reports

5. Schedule E - Technical Requirements: Minimum technical specifications for software operation

6. Appendix 1 - Authorized Users: List of authorized users or user categories if license is restricted

7. Appendix 2 - Support Services: Details of any included technical support or maintenance services

8. Appendix 3 - Quality Standards: Required quality standards for software implementation and operation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

License Agreement

Sector

IP

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Information Technology

Software Development

E-commerce

Financial Services

Healthcare Technology

Manufacturing

Education Technology

Telecommunications

Gaming and Entertainment

Enterprise Software

Mobile Applications

Cloud Services

Relevant Teams

Legal

Finance

Information Technology

Software Development

Compliance

Business Development

Revenue Operations

Intellectual Property

Commercial Operations

Product Management

Relevant Roles

Chief Technology Officer

Legal Counsel

Software Licensing Manager

Intellectual Property Director

Commercial Director

Chief Financial Officer

Business Development Manager

Software Development Manager

Compliance Officer

Contract Administrator

Technology Transfer Officer

Revenue Operations Manager

Partnership Manager

Product Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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