The difference between Transfer of Trade Secret Rights and Licenses

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A trade secret is a part of the Intellectual Property Rights system because a trade secret is a right that has economic value and can make a company gain profit, thereby supporting business activities.

Trade secrets are regulated in Law Number 30 of 2000 concerning Trade Secrets (Trade Secret Law). According to Article 1 paragraph 1 of the Law, a Trade Secret is information that is not known by the public in the field of technology and/or business, has economic value because it is useful in business activities, and is kept confidential by the owner of the Trade Secret.

Based on this article, we can describe the elements of a trade secret, namely:

  1. information that is not publicly known.
  2. useful for technology and/or business.
  3. Has economic value
  4. The owner must have steps to maintain the confidentiality of the information.

One example of a trade secret is information about specific food recipes used by restaurants in making their food.

Trade secrets can be transferred according to Article 5 of the Trade Secret Law:

The Trade Secret Law states that Trade Secret Rights can be transferred or transferred by inheritance, grants, wills, written agreements, or other reasons justified by laws and regulations.

After learning that trade secrets can be transferred with a written agreement, the question arises whether this is the same as a licensed trade secret?

Article 1 paragraph 5 of the Trade Secret Law explains that a License is a permit granted by the holder of a Trade Secret Right to another party through an agreement based on the granting of rights (not a transfer of rights) to enjoy the economic benefits of a Trade Secret that is given protection for a certain period and certain conditions.

In other words, a trade secret license is a permit granted by the owner of a trade secret right so that the party receiving the license can use the trade secret and gain economic benefits, but the trade secret rights do not change.

The licensee also has specific terms and conditions for using the trade secret. As for trade secrets that are transferred, the party receiving the transfer can use the trade secret without conditions and for a certain period of time unless the transfer is made by agreement and the agreement stipulates otherwise.

The elucidation of Article 6 of the Trade Secret Law explains that, in contrast to the agreement that forms the basis for the transfer of a Trade Secret, a license only grants limited rights for a limited time. Thus, a License is only granted for the use or use of a Trade Secret within a certain period of time. To conclude, the Licensee grants permission to use the trade secret with conditions and time limits, but the trade secret owner who grants the license still retains the trade secret rights. At the same time, the transfer of trade secret rights means a transfer of ownership of trade secret rights.



  1. Undang-Undang Nomor 30 Tahun 2000 tentang Rahasia Dagang

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