Trade Mark License Agreement Template for Indonesia

A Trade Mark License Agreement is a legally binding contract that allows you to grant or obtain permission to use registered trademarks in Indonesia. Under Indonesian law, this document creates a formal relationship between the trademark owner (licensor) and the party seeking to use the trademark (licensee), establishing clear terms for how the trademark can be used while protecting the owner's intellectual property rights.

When do you need this document?

You need a Trade Mark License Agreement when entering into any arrangement where trademark usage rights are transferred in Indonesia. This includes franchise operations where international brands license their trademarks to local Indonesian franchisees, manufacturing agreements where foreign companies license their trademarks to Indonesian manufacturers for local production, and distribution partnerships where trademark owners grant usage rights to Indonesian distributors. The agreement is also essential for joint ventures involving shared trademark usage, cross-border licensing arrangements between parent companies and Indonesian subsidiaries, and any situation where you want to monetize your trademark through licensing fees while maintaining control over brand standards and quality.

Key legal considerations

Quality control provisions are mandatory under Indonesian trademark law, requiring you to maintain standards that protect the trademark's reputation and distinctiveness. The agreement must clearly define the scope of licensed rights, including whether the license is exclusive or non-exclusive, the specific products or services covered, and the geographical territory within Indonesia. Royalty and payment terms need careful structuring to comply with Indonesian tax laws and foreign exchange regulations. Termination clauses should address various scenarios including breach of contract, failure to meet quality standards, or expiration of the underlying trademark registration. You must also include provisions for dispute resolution, preferably specifying Indonesian courts or arbitration under Indonesian law to ensure enforceability.

Legal requirements in Indonesia

Indonesian Law No. 20 of 2016 on Marks and Geographical Indications mandates that all trademark license agreements must be recorded with the Directorate General of Intellectual Property within six months of execution to be legally valid against third parties. The agreement must be executed in Indonesian language or accompanied by a certified Indonesian translation. Government Regulation No. 36 of 2018 specifies detailed procedural requirements for license recordal, including specific documentation and fees. The Indonesian Civil Code governs the contract formation and validity requirements, while Law No. 5 of 1999 on competition law ensures that licensing terms do not create anti-competitive practices or monopolistic arrangements. Foreign investment licensing may be required under Law No. 25 of 2007 if the agreement involves significant foreign investment or technology transfer components.