On Promises
A license is not a possession. It is a promise — a permission, granted in writing, to do something with a right that someone else still owns. To broker a license is to broker a promise. The promise has a shape. The shape has a vocabulary. Learn the vocabulary, and the work becomes legible.
The first error of an apprentice broker is to believe that the right is the document. The right is the relationship the document witnesses. The document is the wall. The relationship is the writing on the wall. The two are not the same thing — though they are not separable either.
On Chains
Every license has a chain. The chain is the sequence of all assignments, sub-assignments, and exclusivities that have shaped the right since its origin. To verify the chain is to walk it. Beginning to end. Read every link. Note every break.
A break is a place where a prior assignment was made but not recorded — a tag that was painted but not photographed. The right may still be valid. It may not. The cost of finding out is the cost of an indemnity clause.
The throwie is the apprentice's tool here: an interim transfer, executed under express conditions, valid pending the witnessing of the chain. A skilled broker will use one perhaps twice in a career.
On Encumbrances
What the license wears matters. A patent license wears pledges — secured-creditor priority interests filed against the patent itself. A music sync license wears most-favored-nations clauses, which retroactively re-price every prior license if a more favorable one is later granted. A franchise license wears territory exclusions, which are sometimes drawn on a map and sometimes drawn in a memorandum, and which sometimes contradict each other.
Read what the license is wearing before you bag it. Read carefully. The bombing — the simultaneous portfolio-wide reassignment that follows an M&A — is when encumbrance errors compound the worst. Slow the bombing down. Read every wall.
On Witness
Three signatures. Assignor, assignee, witness. The witness is the unloved third — but the witness is the link to the wall. Without a witness, the assignment is a private act. With a witness, the assignment is part of the public record of how rights move.
In twelve U.S. states and nineteen E.U. members, the witness is statutorily mandatory for license assignments above a stated value threshold. Confirm the jurisdiction. The threshold differs in each. The penalty for omission is, in every case, voidability.