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The Royalty Bearing License agreement is essential for businesses seeking to commercialize intellectual property rights in Indonesia while ensuring compliance with local regulations. This document is typically used when a rights holder (licensor) grants permission to another party (licensee) to use their intellectual property in exchange for royalty payments. The agreement becomes particularly relevant in scenarios involving technology transfer, brand licensing, or patent commercialization within the Indonesian market. It must comply with various Indonesian laws, including Law No. 24 of 2019 on Creative Economy, relevant intellectual property laws, and tax regulations regarding royalty payments. The document includes comprehensive provisions for royalty calculations, payment mechanisms, quality control, and regulatory compliance, making it suitable for both domestic and international licensing arrangements within Indonesia's jurisdiction.

1. Parties: Identification of the licensor and licensee, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, brief description of the intellectual property being licensed, and parties' authority to enter into the agreement

3. Definitions: Detailed definitions of key terms used throughout the agreement, including Licensed Property, Territory, and Net Sales

4. License Grant: Scope of the license, including territory, exclusivity/non-exclusivity, and field of use restrictions

5. Royalty Payments: Detailed structure of royalty calculations, payment terms, currency, and payment methods

6. Reporting and Audit Rights: Requirements for sales reporting, record-keeping, and licensor's audit rights

7. Quality Control: Standards for using the licensed property and quality maintenance requirements

8. Intellectual Property Protection: Obligations regarding IP protection, infringement actions, and maintenance of rights

9. Term and Termination: Duration of the agreement, renewal provisions, and termination circumstances

10. Confidentiality: Protection of confidential information exchanged during the agreement

11. Representations and Warranties: Parties' representations regarding their rights and authority

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Force Majeure: Provisions for unforeseen circumstances affecting performance

14. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment