Proprietary Software License Template for Indonesia
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What is a Proprietary Software License?
The Proprietary Software License Agreement is essential for any software company or developer operating in Indonesia who wishes to protect their intellectual property rights while granting others the right to use their software. This document is particularly crucial in the Indonesian market, where software licensing must comply with specific local regulations, including the Copyright Law and Electronic Information and Transactions Law. The agreement should be used when distributing proprietary software to end-users, whether they are individuals, businesses, or organizations. It contains critical provisions covering license scope, usage restrictions, fees, warranties, and liability limitations, all aligned with Indonesian legal requirements. The document also addresses modern concerns such as data protection and privacy, reflecting recent developments in Indonesian technology law. This type of agreement is fundamental for protecting the licensor's intellectual property rights while providing clear terms of use for licensees.
About the Proprietary Software License
A Proprietary Software License Agreement is a legally binding contract that grants specific rights to use copyrighted software while maintaining the developer's ownership and control. Under Indonesian law, this document serves as your primary tool for protecting intellectual property rights while generating revenue from software distribution. The agreement establishes clear boundaries between what users can and cannot do with your software, ensuring compliance with local copyright regulations.
When do you need this document?
You need this agreement whenever you're distributing proprietary software to end-users in Indonesia. This includes selling software licenses to corporations, offering subscription-based software services, distributing desktop applications to individual consumers, or providing specialized software solutions to government agencies. The document is essential when launching software products in the Indonesian market, whether through direct sales, reseller partnerships, or digital distribution platforms. Educational institutions purchasing software for academic use also require proper licensing agreements to ensure legal compliance.
Key legal considerations
The agreement must clearly define the scope of usage rights, including whether the license is exclusive or non-exclusive, the permitted number of installations, and any geographical restrictions. Payment terms should specify licensing fees, renewal conditions, and consequences of non-payment. Warranty disclaimers and liability limitations protect you from excessive legal exposure while remaining enforceable under Indonesian consumer protection laws. Intellectual property clauses must explicitly state that the software remains your property and outline prohibited activities such as reverse engineering, modification, or redistribution. Termination provisions should detail circumstances that void the license and require software removal.
Legal requirements in Indonesia
Your agreement must comply with Law No. 28 of 2014 on Copyright, which provides comprehensive protection for computer programs and establishes the legal framework for software licensing. The Electronic Information and Transactions Law (No. 11 of 2008, amended by No. 19 of 2016) governs digital contracts and electronic signatures, making online license agreements legally valid. Consumer Protection Law No. 8 of 1999 requires fair terms when licensing to individual users and prohibits unfair business practices. The Indonesian Civil Code provides the foundational contract law principles that govern agreement formation, validity, and enforcement. Additionally, Government Regulation No. 71 of 2019 on Electronic Systems requires compliance with data protection standards when your software processes personal information. All agreements must be available in Bahasa Indonesia for Indonesian users, and dispute resolution clauses should specify Indonesian courts or arbitration procedures.
GOVERNING LAW
Applicable law
This Proprietary Software License is drafted to comply with Indonesia law. Key legislation includes:
Law No. 11 of 2008 on Electronic Information and Transactions (as amended by Law No. 19 of 2016): Regulates electronic transactions and digital agreements, including the validity of electronic contracts and digital signatures
Indonesian Civil Code (Kitab Undang-undang Hukum Perdata): Provides the fundamental principles of contract law, including formation, validity, and enforcement of agreements
Law No. 8 of 1999 on Consumer Protection: Ensures fair treatment of consumers and regulates business practices, including software licensing to end-users
Government Regulation No. 71 of 2019 on Electronic Systems and Transactions: Implements the Electronic Information and Transactions Law, providing detailed requirements for electronic system operations
Law No. 27 of 2022 on Personal Data Protection: Regulates the collection, processing, and protection of personal data, which is relevant for software that may collect or process user data
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