Unlocking the Value of Innovation: A Guide to Patent Licensing in Indonesia

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patent licensing Am Badar & Am Badar

In the business sphere, you’ve likely come across the notion of patent licensing. Licensing is a strategy used to generate income from a patent when the patent owner lacks the capability or motivation to produce it independently. 

This method not only allows inventors to earn revenue from their patents but also promotes broader technological advancement by enabling access to new technologies. 

Before delving into this article, consider exploring Understanding Patent Annuities in Indonesia. You can also visit Am Badar & Am Badar’s insights and services page, or contact their team.

What is Patent Licensing?

A patent license is permission granted by the Patent Holder, whether exclusive or non-exclusive, to the licensee based on a written agreement to use what is still protected within a certain period and conditions. 

Such agreements outline product definitions, payment modalities, the license’s purpose, among other particulars. 

Types of Patent Licensing in Indonesia

In Indonesian patent law, there are two different ways for safeguarding technical innovations, including patents and simple patents (also known as utility models).

  1. Patents. If your invention is new, involves innovation, and has industrial applicability, you are eligible to acquire a patent. This type of protection applies to both products and processes.
  2. Simple Patents. Should your invention be novel and applicable in industry but lacks an inventive step, it could qualify for safeguarding as a simple patent, also known as a utility model. This form of protection extends to products, apparatuses, and processes. 

Note: The law defines an invention as an inventor’s solution to a specific technological problem, encompassing products, processes, and their improvements or developments.

Whereas based on Article 76 paragraph (1) of the Patent Law, the patent holder has the right to grant licenses to other parties based on a license agreement, either exclusive or non-exclusive.

An exclusive patent licensing permits one Licensee in a specific territory, while non-exclusive licensing allows multiple licensees in different territories. Well, here are the various types of patent license in Indonesia according to  Article 76 paragraph (1):

  • Regular License

An ordinary license or voluntary license is the granting of a license at the discretion of the Patent holder, done through an agreement and functions in a manner akin to the provision of licenses in other forms of intellectual property rights.

  • Government License

A government license is the granting of a License for the implementation of the patent by the government. However, not all patents can be monopolized by the government under the pretext of a government license.

  • Compulsory License

A compulsory license is a license for implementing a patent carried out based on a Ministerial Decision. Furthermore, the application and issuance of compulsory licenses are regulated by the Minister of Law and Human Rights Regulation Number 14 of 2021.

  • Cross Licensing

This type of patent licensing refers to reciprocal licensing arrangements established when a patent is derived or developed from a prior patent. In this setup, both parties are empowered to provide each other with authorization.

For in-depth knowledge about different types of patent licenses in Indonesia, refer to a trustworthy resource on Indonesian Patent Law, like the Directorate General of Intellectual Property of the Republic of Indonesia (https://www.dgip.go.id/). 

Crucial Factors for Successful Patent Licensing

Prior to delving into the intricacies of licensing negotiations, it is crucial to comprehend the fundamental factors that affect these agreements:

  • Scope of License

Determining the scope of a license is crucial. Will it be exclusive or non-exclusive? The practice of patent licensing can display significant variations contingent upon factors like industry, geographical location, and particular circumstances. 

Recent research indicates that most, approximately 65%, of patent licensees in the technology sector, prefer non-exclusive agreements.

  • Commitment and Performance Standards

Equally important, license holders are encouraged to actively develop and promote the licensed technology. Failure to achieve designated milestones could result in the termination of the agreement. 

According to research by Cognizance IP, implementing diligence criteria resulted in a 30% increase in the pace of product development for a biotech startup within the initial year of the agreement.

  • Royalty Arrangement

Establishing the financial elements is critical. Royalties might derive from sales or a fixed charge. Negotiators work towards balance to ensure fair recompense for the licensor and motivation for the licensee.

In a manner akin to sharing riches, a semiconductor pioneer witnessed a 15% increase in licensee profitability over a span of two years through the implementation of a blended royalty structure, highlighting the benefits of a strategic approach.

  • Intellectual Property Rights

It’s crucial to precisely delineate the intellectual property rights under consideration. This entails specifying the patents involved, any linked trademarks or copyrights, and whether the licensee’s enhancements or alterations are encompassed.

Collaboration for Success with Am Badar & Am Badar

Collaborating with Am Badar & Am Badar is pivotal for navigating patent licenses in Indonesia. 

Their proficiency is in crafting and negotiating strong licensing agreements that protect client interests, screening potential licensees, and ensuring adherence to Indonesian regulations. 

With the assistance of Am Badar & Am Badar, clients can confidently manage the intricacies of licensing and achieve the best outcomes in the Indonesian market. 

Streamlining the Licensing Process for International Clients

Am Badar & Am Badar serves as a dependable partner in facilitating patent licensing for international clients. We guarantee transparent and efficient communication and negotiations. 

Our team of legal experts adeptly navigates clients through the intricacies of licensing. In the event of a dispute, we take complete responsibility for resolving it. 

Moreover, we assure a smooth licensing procedure, enabling clients to fully leverage the global potential of their patents, as per our commitment.

Key Points

Obtaining a patent license may involve complexities similar to those experienced during the patent acquisition process. Instead of navigating this process alone and facing potential frustrations, rely on the patent services offered by Am Badar & Am Badar.

Collaborating with Am Badar & Am Badar provides international IP law firms with specialized assistance in Indonesian patent licensing. Maximize the full value of your intellectual assets with strategic licensing. 

Contact us now for tailored support, and don’t forget to browse our services section for more details. Plus, check out our insightful blog articles like How to File a Design Patent in China? Follow These Easy Steps!


Reviewed by Nabil Argya Yusuf

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