Sub License Agreement Template for Indonesia

A Sub License Agreement is a critical legal document that allows you to grant specific intellectual property rights to third parties when you are already a licensee under a main license agreement in Indonesia. This arrangement creates a three-way relationship between the original licensor, you as the sub-licensor, and your chosen sub-licensee, all governed by Indonesian intellectual property and contract laws.

When do you need this document?

You need a Sub License Agreement when you hold licensing rights under a main agreement and want to authorize another party to use those rights within Indonesia. This commonly occurs when international companies license technology or brands to Indonesian distributors, who then need to sub-license to local manufacturers or retailers. Technology companies frequently use sub-licensing when expanding through local partners who require rights to manufacture, distribute, or modify licensed products. Franchise operations often require sub-licensing when master franchisees grant rights to individual franchisees. Additionally, you need this document when your main license agreement specifically permits sub-licensing and you want to monetize your rights while maintaining compliance with both the original agreement and Indonesian law.

Key legal considerations

Your sub-license agreement must carefully preserve the restrictions and obligations from your main license agreement while creating clear rights for your sub-licensee. You must ensure that your main license agreement explicitly permits sub-licensing, as unauthorized sub-licensing can breach your original contract. Quality control provisions are essential, as you remain liable to the main licensor for your sub-licensee's performance and compliance. The agreement should include detailed scope limitations, ensuring your sub-licensee cannot exceed the rights you were granted. Payment and royalty structures must account for your obligations to the main licensor while providing fair compensation terms. Termination clauses should align with your main license agreement to prevent conflicts, and you must include provisions for immediate termination if your main license ends.

Legal requirements in Indonesia

Under Indonesian law, your Sub License Agreement must comply with the Indonesian Civil Code regarding contract formation and validity, requiring clear offer, acceptance, and consideration. Copyright sub-licensing must follow Law No. 28 of 2014, which mandates written agreements and potential recordal with the Indonesian IP Office for enforceability against third parties. Patent sub-licensing under Law No. 13 of 2016 requires specific provisions regarding technology transfer and may need approval from relevant Indonesian authorities depending on the technology involved. Trademark sub-licensing must comply with Law No. 20 of 2016, ensuring quality control standards and proper use of registered marks. If your sub-licensee is a foreign entity, you must consider Law No. 25 of 2007 on Investment regarding foreign investment restrictions and local partnership requirements. Competition law under Law No. 5 of 1999 prohibits anti-competitive clauses, requiring careful structuring of territorial and field-of-use restrictions to avoid monopolistic practices.