Can you license records that are under a litigation hold?

What a litigation hold requires, and what it does not#

A litigation hold requires a company to preserve records that may be relevant to a pending or reasonably anticipated dispute, investigation or audit. In practice that means suspending deletion, keeping originals intact and making sure nothing in scope is altered, overwritten or lost when systems change.

A hold does not, by itself, make records secret or unusable. Companies keep working with held email, tickets and project files every day. The licensing question is narrower: whether copying, transforming and delivering a set of records could compromise the preserved originals, conflict with a court order, or expose privileged or confidential material.

So the answer is conditional. Licensing held records can be workable when originals stay untouched and counsel approves the scope, and inadvisable when the dispute concerns the very records in question. This is general information, not legal advice; the analysis is done case by case with litigation counsel.

Which licensing steps touch a hold?#

Licensing steps touch a hold at different points, and the risk sits mostly in what happens to the originals. The table separates actions that usually leave preservation intact from those that need a specific answer from counsel.

Many email and collaboration platforms offer built-in hold features that keep content preserved even when users delete it. Slack, for example, states that when a legal hold is in place, messages and files in a conversation are saved regardless of retention settings, even if members edit or delete them; holds there are an Enterprise-tier feature. An export from a held mailbox or workspace generally leaves that hold in place, but confirm the behavior in the platform's documentation and with IT before relying on it.

The common failure is not the license but the housekeeping around it. A team preparing records for a buyer decides to shut down an old help desk at the same time, and the shutdown removes records a hold still covers.

Records that stay out even with counsel's approval#

Some records stay out of a license regardless of how the hold analysis comes out, because other duties attach to them. Build these exclusions into the scope before any export runs.

Excluding the disputed subject matter is often the simplest path. If a claim concerns one customer's shipments, leaving that customer's records out entirely usually costs little in a dataset built from many customers.

Your own records that were produced in the case raise a separate question. Producing a document usually does not stop the company from using its original elsewhere, but if the produced copy carries a confidentiality designation, counsel should confirm what that designation covers before the original is licensed.

• 1Communications with lawyers and documents prepared for the litigation, which may be privileged or protected work product.
• 2Documents received from the other side in discovery, which are often governed by a protective order that may limit their use to the case.
• 3Records describing the disputed transaction, project or customer, where licensing could look like disclosure of contested facts.
• 4The hold notices, custodian lists and preservation correspondence themselves.
• 5Internal investigation files, HR complaint records and anything subject to a confidentiality order or settlement term.

Counsel sign-off checklist for held records#

A counsel sign-off checklist turns the hold analysis into a record the supplier, counsel and buyer can rely on. Litigation counsel, not the licensing team, should own the answers.

Re-check the hold register right before delivery. A new claim can arrive between scoping and release, and a hold issued after delivery still applies to your originals even though the licensee's copy has already left.

Illustrative: a third-party logistics company with one open claim#

Illustrative: a fictional third-party logistics company operates warehouse and transportation management systems plus a help desk, and is preparing several years of shipment exception records for licensing. One retail client has sued over damaged inventory, and a hold covers that client's account, the operations managers who handled it and their email.

Counsel approves a scope that excludes the litigating client's records and the held custodians' mailboxes entirely. The remaining exception records are exported read-only into a separate preparation environment, de-identified there and logged. A planned help desk migration is postponed until IT confirms a preservation export of the held tickets.

The license proceeds with the rest of the exception history. The hold stays on the originals, and the release record names the counsel who signed off and the date of the final hold check.

How SourceX handles records under a hold#

SourceX asks about pending disputes, holds and protective orders during the Rights step of the SourceX five-step transaction: Supply, Rights, Preparation, Approval and Delivery. The first fit check works from descriptions of systems, record types and date ranges, so no held record is copied to answer it.

When held records are in scope, the exclusions, preparation method and counsel's approval are recorded in the SourceX Evidence Packet under licensing rights, the privacy record and release authorization. The supplier approves each step, and preparation is limited to copies.