Unlike most business processes and function for which companies can implement controls to manage their risk, licensors must trust and rely on the internal control environment of their licensee to ensure intellectual property (IP) is protected and they are compensated fairly. Licensors must maintain professional skepticism to determine how to monitor the effectiveness of the licensee’s controls surrounding the protection and utilization of their IP while maintaining a symbiotic relationship.
The following discussion offers guidance to individuals responsible for licensing programs and for those responsible for monitoring compliance to licensing requirements. It includes information on the most common types of licensed IP, common compliance components in most license agreements, typical licensing channel relationships, common licensing risks, and leading practices in effective licensing programs. Additionally, it highlights some examples of the types of analytics utilized in monitoring a licensing channel.