As stated in Article 1 point 5 of Law No. 20/2016 on Trademarks and Geographical Indications (Trademark Law), the trademark owner has the right to use the trademark himself or give permission to other parties to use it, or in other words, license the trademark.
Yes, a brand license allows the brand owner to grant permission to another party (usually another company or individual) to use the trademark in relation to certain products or services. However, this trademark license can only be executed based on a trademark license agreement. Well, this agreement also needs to be registered, you know! What is the procedure? Check out the further explanation in the following article.
Overview of Brand Licenses
In general, a license is the granting of permission to produce a certain product or service, where the product or service has previously been patented by the one who created it the first time. A license is also often interpreted as a form of granting permission to utilize intellectual property rights, which intends that the licensee can carry out business activities or produce certain products using the intellectual property rights licensed. In the context of a brand license, the brand owner is the party that owns the exclusive rights to a particular trademark, which can be a name, logo, slogan, or symbol used to identify their products or services. This license is granted to be able to enjoy the economic benefits of the use of such intellectual property within a certain period of time and under certain conditions.
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In other words, the more parties that use the license, the more people will recognize your brand. In fact, this brand license may involve competitors to create a brand or just a new nickname for a new product innovation.
Contents of Brand License Agreement
As mentioned earlier, brand licenses can only be run based on a brand license agreement. This serves as legality between the two parties and becomes a medium to involve the government or the Directorate General of IP in monitoring the use of your trademark. A trademark license agreement can also prevent unauthorized use or damage to the trademark by other parties. In addition, the trademark owner can also usually receive royalties from the licensee in exchange for permission to use the trademark. A license agreement based on Article 7 paragraph (2) of Government Regulation No. 36/2018 on the Recording of Intellectual Property License Agreements (“PP 36/2018”) must at least contain:
- Date, month, year, and place where the license agreement was signed;
- Name and address of the licensor and licensee;
- The object of the license agreement;
- The terms of the license are exclusive or non-exclusive, including sub-licenses;
- Term of the license agreement;
- The area where the license agreement is valid; and
- The party that makes the annual fee payment for the patent.
What is the Procedure for Recording a Trademark License Agreement?
Based on Article 7 paragraph (1) of Government Regulation No. 36/2018, the license agreement must be recorded by the Minister of Law and Human Rights. This is to help them provide protection to the brand. In fact, not only for trademarks, the recording is carried out for other intellectual property objects in the fields of copyright, patents, industrial designs, integrated circuit layout designs, trade secrets, and plant varieties (Article 2 paragraph (1) of PP 36/2018). The procedure for recording a trademark license is as follows:
Application Submission
The applicant can submit an application for recording the license agreement electronically through the official website of the DJKI https://www.dgip.go.id.
Booking Billing Code and Account Login
After covering all the above requirements, the applicant can then order a billing code on the https://simpaki.dgip.go.id page . Furthermore, the applicant can continue to log in to the brand account on the https://merek.dgip.go.id page with the following procedure:
- Select ‘Post Application Online’
- Select the application type ‘License Agreement Recording’, enter the billing code that has been paid, click the ‘Add Application’ button (bottom left corner), enter the Application Number
- Enter Applicant Data
- Filled in if the application is with a power of attorney (IP consultant)
- Click ‘Add’, attach the required documents
- Preview (make sure all your data is correct)
- Notes for Officers (if any)
- Click ‘Finish’
Application Examination
Every application for license agreement registration must be checked first, whether the documents attached are appropriate and complete. If incomplete, the application shall be returned for completion. A maximum of five days from the date the documents are declared complete, an examination of the application is carried out on the suitability of the documents. In the event that it is declared inappropriate, the Minister notifies the applicant in writing to adjust the documents within a maximum of 30 days after the date of sending the notification letter. If the time limit is exceeded, the Minister shall notify the applicant in writing that the application is deemed withdrawn and the fees paid are irrevocable.
Listing and Announcement
The MOLHR will issue a letter of registration of the license agreement within 2 days from the date the examination is declared complete and appropriate. Then, the license agreement is recorded in the public register and subsequently announced in the official brand news.
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Granting a license aimed at empowering a brand can provide optimal benefits to the brand owner, such as expanding market reach, being a means of innovation, and complementing product shortcomings. So in fact, granting partial use of a brand is not a bad thing. Moreover, the government is now stronger in protecting the brand license agreement between the owner and the licensee later. If previously the Directorate General of IP only involved brand owners, now there are other parties as licensees who need to be considered as well and of course the potential for disputes is getting higher. This is where the role of the Directorate General of IP as a supervisor is increasingly necessary so that the recording of the trademark license agreement is needed.
KH Contact
Well, for KH pals who currently have a business and plan to give the use of your trademark rights to other parties, don’t miss to make a trademark license agreement! After that, you can record the trademark license agreement to the Directorate General of IP with a Legal Contract.
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We can help you to record a trademark license agreement with a competent and officially registered IPR consultant, so that it is guaranteed to be legal and safe. For service information, visit the KH Services – Trademark License Agreement Recording page. Or if you have other Intellectual Property needs, you can consult for free at Ask KH or send a direct message (DM) to Instagram @Kontrakhukum.
