FINALLY, RECORDAL OF LICENSE AGREEMENT CAN BE APPLIED TO AND PROCESSED IN THE DIRECTORATE GENERAL OF INTELLECTUAL PROPERTY

Basically, the provisions concerning the Recordal of License Agreement on Intellectual Property have been mandated for a long time by the Law relating to Intellectual Property in Indonesia. In this opportunity, we shall take one of the Intellectual Property fields, namely Mark, which is regulated in Law No. 15 of 2001, especially in Article 43 of the said Law stating that:

• The owner of a registered Mark shall be entitled to grant a License to another party with an agreement that the Licensee will use the Mark either for a part of, or entire kind of goods or services.
• The License Agreement shall be valid for the entire territory of the Republic of Indonesia, unless agreed otherwise, for a period not exceeding the period of protection of the registered Mark concerned.
• The recordal of License Agreement must be applied to the Directorate General and shall be charged with a fee and the legal consequences of the recordal of License Agreement shall apply to all parties concerned and to any other third party.
• The License Agreement as referred to in paragraph (3) shall be recorded by the Directorate General in the General Register of Marks and shall be announced in the Mark Official Gazette.

In line with Law No. 15 of 2001 concerning Marks, provisions concerning the Recordal of License Agreement on Intellectual Property have also been regulated in Law No. 20 of 2016 concerning Marks and Geographical Indications, which are contained in Article 42 stating that:

• The owner of a registered Mark may grant a License to another party to use such Mark, whether for a part of, or entire kind of goods and/or services.
• The License Agreement shall be valid for the entire territory of the Republic of Indonesia, unless agreed otherwise.
• The recordal of License Agreement must be applied to the Minister and shall be charged with a fee.
• The License Agreement as referred to in paragraph (3) shall be recorded by the Minister and shall be announced in the Mark Official Gazette.
• Unrecorded License Agreement shall not have any legal consequences for a third party.
• The License Agreement must not state provisions whether directly or indirectly, causing detrimental effects on the Indonesian economy or contain restrictions hampering the ability of the Indonesian people to control and develop the technology.

As can be seen from the title of PP 36/2018, this regulation can be implemented for all Intellectual Property objects. It is also stated expressly in Article 2 paragraph (1) of PP 36/2018 stating that the Recordal of License Agreement is carried out on Intellectual Property objects in the fields: Copyright and Related Rights; Patent; Mark; Industrial Design; Integrated Circuit Layout Design; Trade Secret; and Plant Varieties.

In order to facilitate all readers who want to make a License Agreement, we would like to inform you of the following matters for your consideration when making such agreement, which are also in accordance with the requirements referred to in Article 7 paragraph (2) of PP 36/2018.

A License Agreement at least contains the following matters:

1. Date, month, year and place of the License Agreement is signed;
2. Name and address of the Licensor and Licensee;
3. Object of the License Agreement;
4. Terms of the License which are exclusive or non-exclusive, including sublicense;
5. Period of time of the License Agreement;
6. Area where the License Agreement shall be valid; and
7. The party who shall make the patent annuity payment.

Furthermore, as the Application for the Recordal of License Agreement on the Intellectual Property shall be filed to the Minister through the Directorate General of Intellectual Property, it certainly requires some requirements to support the said application, as follows:

1. Copy of the License Agreement;
2. Official excerpt of Patent Certificate, Mark Certificate, Industrial Design Certificate, Integrated Circuit Layout Design Certificate, proof of ownership of Creation or Related Rights, or proof of ownership of a licensed and still valid Trade Secret;
3. Power of Attorney, if the application is filed through a Proxy; and
4. Proof of payment.

In addition to the above-mentioned documents, an Applicant must also fill in a form of statement stating that the recorded License Agreement is an Intellectual Property object which:

1. Is still in the protection period;
2. Does not harm national economic interests;
3. Does not hamper technology development; and
4. Is not in contradiction to the provisions of laws and regulations, decency and public order.

In our opinion, there are such interesting matters in the PP 36/2018, especially the matter which is related to the provision of Article 1 paragraph (3) stating that “The Applicant is the Licensor, the Licensee, or his Proxy“. In accordance with such provision, the Licensee is one of the parties who may file an Application for the Recordal of License Agreement, which generally, only the owner of Intellectual Property who may file an application with the Directorate General of Intellectual Property.

The provision of such article may be regulated to facilitate the parties to file the Application for the Recordal of License Agreement. Considering that at the present time, more Intellectual Property Owners are usually Licensors from abroad, thus, the Government of Indonesia facilitates those interested parties by stating that a Licensee shall also be an Applicant, or for the example of this case is a Licensee who is domiciled in Indonesia.

Other than the facilities as described above, it is also necessary to pay attention to the provisions of Article 6 of PP 36/2018 which regulate prohibitions of a License Agreement. The following matters shall be prohibited from a License Agreement:

1. Inflicting damages to the Indonesian economy and Indonesia’s national interests;
2. Containing restrictions that hamper the ability of the Indonesian people to carry out the transfer, control and development of technology;
3. Resulting in unfair business competition; and/or
4. Contradiction to the provisions of laws and regulations, religious values, decency and public order.

Therefore, in order that your Applications for the Recordal of License Agreement can be accepted and approved by the Directorate General of Intellectual Property, it is highly advisable to pay full attention to the provisions of Article 6 of PP 36/2018 and other provisions as mentioned above.

Last but not least, the Directorate General of Intellectual Property now can process the Application for the Recordal of License Agreement. Therefore, if all required documents are in order and have met the requirements after a filed application passes an examination process of document completeness and conformity, the Minister shall issue a Recordation Letter of License.

Actually, there are still many other interesting matters related to this recordal of License Agreement that we want to inform you, but due to one thing and another, it is not possible for us to continue and explain it one by one in this article. For this reason, if all readers require further information or would like to consult us, please do not hesitate to contact us, Am Badar & Partners, either via email, phone or please directly visit our Office.

For your last information, please also note that considering our experience as an Intellectual Property Consultant Office that has more than 50 years of experience, it can be said that we are very competent in the field of Intellectual Property, which also includes making and reviewing License Agreement or other matters related to the Intellectual Property in Indonesia and internationally.

We hope the above information will bring benefit and be a useful knowledge for all readers. However, if there are still any other matters that you would like to ask or further discuss with us, our professional team will be pleased to serve you.