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Liability: the complicated task of licensing law enforcement technologies

This paper discusses a situation where a company (licensor) requires a liability policy as a condition of a license agreement, when licensing law enforcement technologies. The purpose of this discussion is to evaluate the reasons behind the need for extensive liability policies to protect licensors when marketing their law enforcement technologies to private industry. Finding a solution to the problem, therefore reducing the potential for high liability insurance costs, would be desirable. Since the risks associated with most technologies are virtually unknown, and because such technologies are used in very unpredictable legal environments, alternative ways of guaranteeing research and development enterprises that they will be covered against product liability are needed. Without such protection, licensors may require licensees to indemnify them beyond the usual guarantees provided in a licensing agreement, which may make the license too costly for smaller businesses. When the share of the market is limited to larger corporations, competition suffers and ultimately the cost to law enforcement agencies increases.