What the GitHub Licensed tool does
GitHub’s tool works as follows:

It caches and checks license metadata, looking for dependencies. These dependencies are detected for various language types and package managers across the projects in a repo.
A configuration file determines where and how to enumerate dependencies, which are enumerated for each source path in the configuration.
When a dependency is found, the tool finds the source location in a local environment and extracts the relevant metadata.
It uses the Licensee Ruby Gem to determine the license of each dependency and find the license text.