What Qualifies As Due Diligence In Regards To Licensing Agreements?
If you want to enter into a licensing agreement with someone, both parties are going to have to exercise due diligence. However, not everyone understands how due diligence applies to licensing. Here’s what you need to know.
Due Diligence For Licensors
If you are the one licensing something, then you need to take a closer look at the person or company that is obtaining the license from you. You may want to conduct some sort of background check.
It is your job to make sure that the licensor doesn’t handle any competing products. You should also make sure that they have a solid reputation. It’s your job to protect your license. Make sure that your licensing agreement won’t damage the license in any way.
Due Diligence For Licensees
A licensor isn’t the only party that has to exercise due diligence. Licensees also need to practice this. What do they need to be doing? To start, they need to make sure that the person they are obtaining the licensing from actually owns the license. If you’re licensing a product, for example, the inventor of that product may not be authorized to license it to you.
There are a number of other things you’ll want to look into as well. You should find out what kind of protection the license has. You should see if the product you are licensing is unique enough to justify the cost of a license. You may want to work with a lawyer. They’ll be able to help you get everything sorted out.
It’s vitally important to exercise due diligence when you are licensing something. If you fail to do this, you could have big problems later on. When is doubt hire one of 361 lawyers to make sure you are handling all aspects of your business correctly.