Indonesian law has always required that a licence in respect of Intellectual Property (IP) rights be recorded. However, until recently, it had not been possible to record such licences due to the absence of implementing regulation. With effect from 24 February 2016, it is now both possible and mandatory to record a licence in respect of IP rights.
The new developments will affect licences in respect of:
- Trade marks;
- Industrial designs;
- Integrated circuit layout designs; and
- Trade secrets.
These developments have been long awaited, as they finally set out the procedures and requirements for recording such licences with the Indonesian IP Office.
Importance of recording a licence
It is now both possible and mandatory to record the grant of an IP licence. For instance, Indonesian trade mark law now requires such recordals in order for:
- The licence agreement to have legal effect and to be enforceable against third parties.
- Without recordal, the licensee (with or without the licensor’s assistance) would not be able to enforce its rights granted under the licence agreement so as to take action against third party infringers. In other words, the only party with the right to take action against third parties would be the trade mark owner. Nevertheless, whilst the licence agreement is not enforceable against third parties unless recorded, it would still be enforceable between the contracting parties.
- Use of the mark by the licensee to constitute relevant use of the mark by the trade mark owner. This is important particularly to safeguard against challenges on the basis of non-use, especially where use of your mark is only through your subsidiary or other third parties.
Who should file the application?
Under the new Regulation, the licensor, licensee, or its proxy (i.e. an IP consultant or individual authorised by the IP owner) may submit the application to record the grant of an IP licence.
The following documents are required in order to record a licence:
- A copy of the licence agreement or evidence of the licence agreement;
- A copy or certified true copy of the patent, trade mark, industrial design or integrated circuit layout design certificate or evidence of ownership of the copyright in question;
- An original power of attorney, to be simply signed, if the application is submitted through proxy;
- The original payment receipt of the recordal application; and
- A letter in the prescribed form, simply signed, stating that the licence sought to be recorded is in respect of IP which:
- is within the protection period;
- does not inflict any harm towards national economic condition;
- does not obstruct innovation of technology; and
- does not contradict with the provisions under the prevailing laws, regulations, norms and public order.
The application will be examined for formalities. If there are any issues, the applicant will be notified and given 10 days to comply, failing which the application will be considered withdrawn. If all requirements are complied with, the licence agreement will be recorded and published on the website of the Directorate General of IP.
There is no indication at present as to whether the licence agreement itself will be examined substantively or the requirements as to the form or contents of the licence agreement.
Period of validity
A recordal of an IP licence agreement will be valid for five years, and subsequent re-applications will have to be made thereafter. When re-filing, the IP rights must still be valid.
No deadline by which the licence must be recorded
Whilst there is no deadline by which a licence must be recorded, we recommend filing an application for recordal as soon as possible to ensure that the licensee can enjoy the full benefit of the rights in the trade mark.