Data Licensing: A Core Asset When You're the Licensee

In my prior posts in this data series, I shared an overview of data licensing and general concerns, and went in depth on common issue areas for companies licensing out their data sets. In today’s post, I discuss issues to consider when you’re the licensee, or receiving data as part of a commercial agreement. 

Common Issue Areas

The common issue areas as licensee have some overlap with the licensor, but with key differences. As a licensee, you’re taking on a risk by licensing data without complete information as to its provenance and whether consent was properly provided by the companies or individuals whose data is being licensed. As such, there are additional considerations and concerns to address, whether as warranties, indemnification, or similar risk-shifting provisions. 

Here are common issue areas to consider: 

1. Specific Datasets: Make sure the exact data sets in question are listed out, so you know what you’re getting for the money.
2. Access: Is the provisioning and access rights in-line with your security team’s requirements? 
3. Consent: Regardless of your application, has consent been obtained by the vendor? 
4. Ownership: Will you be able to create derived data from the original data? Will you own it? Do you have an interest in owning it, or will a license suffice?
5. License Terms: How do you plan to use the data? That will determine whether the license terms, as-written, cover your use case. You should consider how you currently plan to use the data as well as possibilities in the future, such as for product development, marketing, and other use cases that may open up future revenue streams. 
6. AI Use Cases: Will you need the data to train AI models you’re developing? Do you know the provenance of the data (where it came from), and whether there are any IP issues or consent issues with how it was obtained? Have you seen a subset of the data to evaluate its usefulness to your business? 

As I mentioned, usage of data for AI development or training requires different provisions from traditional data licensing arrangements, and particularly as a licensee, you should have discussions with your vendor and your team to get comfortable with how and where that data was obtained. Often, company licensees ask for further assurances in the form of warranties, indemnification, and other protections. It’s best to ask a commercial attorney who’s worked with these agreements and transactions to fully understand any risks you’re taking on and how best to protect your business. 

Happy holidays, everyone! Thanks for reading and I’ll see you all in the new year!