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Data Licensing: 9 Questions to Address Before Getting Data from a Third Party

Data Licensing | DM Valid |

The Overview of Data Licensing

Every business is built on data. Whether a business is small-scale or huge, with several branches around the world, highly precise and trustworthy data is what makes it successful. But where do you get these enormous collections of information? The majority of businesses get it from outside sources that compile and update the list in accordance with the conditions set forth.

These sources fall into various categories, some of which are covered by a contract known as a “data license agreement.” Website terms of service, subscription agreements, outsourcing agreements, data security policies, alliance agreements, purchase and sale agreements, or other business agreements are examples of such documents. Every company has to understand how to utilize data licensing agreements because they are one of the most popular and extensively used protocols. This is so they can prevent issues that could arise from using them improperly.

Are you looking for data licensing services?

Therefore, if you have any intentions to license data from third-party sources, you need to be aware of the numerous components that, when managed properly, can lead to better outcomes. Before deciding to seal the deal with a third party for the service, we outlined nine questions that needed to be addressed. You will understand what data you require and how to control its utilization carefully once you get the answers to all of these questions.

1. What Are the Basic Clauses of a Data License Agreement?

Everything about the data that is authorized is defined by the fundamental clauses of data licensing. It contains:

  • The way in which they offer the information
  • How often is the data updated?
  • The format in which they deliver the information to you
  • The method for transmitting data in real-time or near it
  • In addition, the delivery method
  • Data encryption and other safety precautions
  • Requirements for hardware or software configuration.

Depending on the license type your company uses, some of these conditions can be different.

2. Who is able to utilize the data?

There are many limitations on data usage outlined in the data license agreement. In other words, these are the restrictions on who is allowed to use the data, what devices are allowed to use it, and how many or what tools are allowed to be used. These regulations must be made clear to the licensee in advance so that they can follow them.

In addition, it’s possible that multiple people can use the data in huge organizations. The data might also need to be accessible to other organizations, affiliates, contractors email list, or even the licensee’s clients. In order to prevent difficulties, you must confirm that it is legal and that the license you already paid permits it.

3. Is the data license exclusive?

Instead of exclusive license agreements, third-party sources typically offer non-exclusive ones. The licensor will have the same rights as a licensee under the non-exclusive agreement. And he has the option of licensing the same data to other businesses or third parties. Since they seek an exclusive right to all the data, some businesses might not welcome this kind of offer.

If you are one of them, you can choose an exclusive licence, which grants the licensee complete control over the data and forbids access or use by anyone else, not even the licensors. One can also choose a single licence, which allows access to and use of the data but forbids the licensor from granting the same permission to third parties. Recognize the license type your company requires and make your purchases accordingly.

4. What does a data license serve?

You can obtain the data license from some third-party sources just for the intended use. You might utilize it for outside purposes without carefully understanding the restrictions, which would be a licence violation. Therefore, it is crucial to understand your data licence in order to prevent future problems. One can, for instance, identify the patient’s history, report, survey, research, and other health-related tasks utilizing hospital data. You can’t utilize it on a separate domain because that would be against the law.

Therefore, if you are a licensee, it is your duty to ask the third party for information about how they use their data and to request that they include all potential uses of that data in the license agreement. Both the maximum scope and potential future use cases should be included in it.

5. Do any location restrictions apply?

There are certain businesses that may have operations in various nations. The location restriction specified in your data license agreement must be known in such circumstances. Some third parties, for instance, only offer data licensing to one particular nation. The data can therefore only be accessed, used, or stored in that specific area.

Additionally, if your business operates outside of the boundaries of the agreement, you must make this known to the other party. In these situations, you can either choose a license that gives the licensee unrestricted access or access from anywhere in the globe, or you can ask the third party to alter the license in accordance with your needs.

6. What Security and Privacy Issues Exist?

Before purchasing a data license from another party, you should always be aware of information relating to privacy policies and security. Cybersecurity and data protection legislation like the GDPR are becoming more and more important in practically every industry on a daily basis.

Therefore, before moving on, you must have a firm understanding of this domain. The data license must take into account:

  • The nature and sensitivity of the data they offer
  • The precautions the licensee can take to safeguard against any privacy or security concerns
  • The licensee’s possible liability in the event of a data breach

7. Does the licensor offer data of high quality?

It’s not always required for licensed data to be of high quality and completely reliable. Such details are frequently provided by the licensor in the disclaimer section of the data license agreement. Such a disclaimer is common, particularly when the data’s owner grants other users access to it or when the owner does not offer a particular type of data. We always advise you to carefully read all of the information before accepting it.

You can find this information in the following sections of the majority of license agreement forms:


8. What Rights Do I Have With Respect to Data Licenses?

The licensees need to know if the licensors will provide them complete access to the data or if there are any limitations. Most of the time, the data’s licensors won’t grant the licensee any more rights. Therefore, it is essential that you become familiar with it before making the buy. Additionally, you should make an effort to incorporate details like intended uses and permissions in the data licence agreement beforehand.

In contrast, if your business uses personal data, the licensors may have obtained the information from a variety of sources. Ensure that the third-party sources represent and warrant that they have obtained everyone’s authorization for the use of their data. The licensor is required to inform the licensees and take appropriate measures in the event that any person withdraws their approval.

9. How Long Does My Data License Last? When does it end?

Most of the time, the licensor offers a limited subscription term for the data license. And when the allotted time has passed, the data will either be destroyed or returned. The legality of your data license must be established in advance because these data are essential to the running of your firm.

The data may be used by the companies or its affiliates in a variety of other systems, and it will be impossible to trace its usage in the future. Therefore, it is a good idea to become aware of these restrictions in advance. The data license agreement’s terms and termination provisions might not always be adequate for your company’s purposes. In some circumstances, you could need a perpetual license to satisfy business requirements.


Now that you are aware of the factors to examine, you can purchase licenced data from others. Spend some time answering them or ask a third party to provide the information. You will know what to expect from such data and how to use it properly after responding to these nine questions.

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