Patent Licence Template for Indonesia

A Patent Licence agreement is a legal contract that allows you to grant or obtain permission to use patented technology in Indonesia. Under Indonesian Patent Law No. 13 of 2016, these agreements create binding relationships between patent owners (licensors) and authorized users (licensees), enabling controlled commercialization of protected inventions while maintaining the patent holder's underlying rights.

When do you need this document?

You need a Patent Licence when transferring technology across borders into Indonesia's market, particularly in manufacturing, pharmaceuticals, or technology sectors. International companies entering Indonesia through licensing partnerships require these agreements to comply with foreign investment regulations and local content requirements. Domestic patent holders use licensing to expand market reach without direct investment, while research institutions often license innovations to commercial partners for product development. The agreement is also essential when establishing joint ventures involving patented technology or when patent owners want to generate revenue from intellectual property without losing ownership rights.

Key legal considerations

Your Patent Licence must clearly define the scope of rights granted, including whether the license is exclusive or non-exclusive, territorial limitations, and field of use restrictions. Royalty structures require careful drafting to ensure compliance with Indonesian tax law and transfer pricing regulations, particularly for cross-border transactions. Quality control provisions are crucial to maintain patent validity and prevent inferior products from damaging the licensor's reputation. The agreement should address improvement patents, sub-licensing rights, and termination procedures while ensuring compliance with Indonesian competition law to avoid anti-competitive restrictions. Confidentiality clauses protecting trade secrets and technical know-how transfer are equally important for comprehensive intellectual property protection.

Legal requirements in Indonesia

Indonesian Patent Law No. 13 of 2016 mandates registration of Patent Licence agreements with the Directorate General of Intellectual Property (DGIP) within three months of execution for legal enforceability. The agreement must comply with Government Regulation No. 36 of 2018, which details licensing procedures and documentation requirements. Foreign licensors must consider Law No. 25 of 2007 on Investment, which may require specific approvals for technology transfer in certain sectors. Competition law compliance under Law No. 5 of 1999 ensures licensing terms don't create monopolistic practices or unfair business competition. The Civil Code provides the contractual framework, while specific industries may have additional regulatory requirements from relevant ministries or agencies.