A U.S. licensor will be most successful in maintaining effective control over licensees and preventing them from voiding its contract by:

a. using lawyers from both countries to write the licensing agreement.
b. insisting that all licensees have a published code of ethics.
c. not allowing the licensee to pay a fee for the use of proprietary knowledge.
d. locally registering patents and trademarks to the U.S. firm and not to the licensee.

ANSWER: d

Licensing may create a new competitor in the long run, if the licensee decides to void the license agreement. Two common ways of maintaining effective control over licensees are shipping one or more critical components from the United States and locally registering patents and trademarks to the U.S. firm, not to the licensee.