Ethical Practices in Licensing Flashcards

A licensee requests a meeting to discuss technical assistance, and the licensing professional realizes the licensee is attempting to reverse-engineer the licensed software beyond the agreed scope. The ethical response is to:

Answer: Decline to assist and document the potential contractual breach

Declining assistance and documenting the potential breach protects the licensor's IP rights while creating a proper record for any subsequent enforcement action.

The ethical principle of 'competence' in licensing practice means that a CLP professional should:

Answer: Only advise on matters within their verified expertise, seeking help or disclosing limitations otherwise

Competence requires professionals to work within areas of genuine expertise and to disclose limitations or refer out when a matter exceeds their knowledge.

Which action by a licensing professional would MOST likely constitute an ethical violation related to misrepresentation?

Answer: Claiming a patent is commercially practiced when it is not yet reduced to practice

Claiming a patent covers commercially practiced technology when it has not been reduced to practice is a material misrepresentation that misleads the licensee about the technology's readiness.

In ethical IP management, the duty of loyalty requires that a licensing professional acting as an agent must:

Answer: Prioritize the principal's interests above the agent's own financial interests

The duty of loyalty means the agent must subordinate personal interests and act exclusively in the principal's best interest throughout the engagement.

A licensing professional is aware that a specific valuation methodology would produce a higher royalty for their employer's benefit, while a more widely accepted methodology would produce a lower, fairer rate. Ethical conduct requires:

Answer: Applying the most appropriate and widely accepted methodology and disclosing alternatives

Professional integrity requires using the most defensible methodology and disclosing alternative approaches so the other party can make an informed decision.

When a licensing professional learns that confidential deal terms have been leaked to a competitor, the FIRST ethical obligation is to:

Answer: Investigate internally, stop further disclosure, and notify affected parties

An immediate internal investigation, containment of further leaks, and notification of affected parties are required to fulfill confidentiality obligations and minimize harm.

A technology licensor engages in 'sham litigation'—filing infringement suits they know are meritless to pressure smaller competitors into taking a license. This practice raises which primary ethical concern?

Answer: Abuse of the legal process and anticompetitive exclusionary conduct

Sham litigation weaponizes the legal system to coerce licenses through baseless suits, which constitutes an abuse of process and can be found anticompetitive under antitrust law.