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The License Option Agreement serves as a crucial intermediate step in intellectual property transactions under United States law, providing potential licensees with the opportunity to evaluate and secure rights to intellectual property before committing to a full license. This document type is particularly valuable when parties need time for due diligence, technology evaluation, or market assessment before entering into a full license agreement. The agreement typically specifies the option fee, duration, exercise conditions, and key terms of the potential future license. Common use cases include technology transfer from research institutions, software licensing, patent commercialization, and pharmaceutical development agreements. The License Option Agreement must comply with federal intellectual property laws, state contract laws, and industry-specific regulations, while addressing potential antitrust concerns for exclusive arrangements.
