Licensing

Licensing is a business arrangement where one company gives another company permission to manufacture its product for a specified payment. There are many types of licenses, including software licenses, patent licenses, and copyright licenses.

Types of Licenses

There are several types of licenses that are commonly used in various industries. These include:

• Software license: This is a legal instrument that governs the use and redistribution of software.

• Patent license: This is a transfer of rights under a patent from the patent owner to a licensee.

• Copyright license: This is a contract under which the holder of a copyright gives another party permission to use the copyrighted work in ways that would otherwise infringe on the copyright.

Licensing Agreements

A Licensing agreement is a legal contract between two parties, known as the licensor and the licensee. In a typical licensing agreement, the licensor grants the licensee the right to produce and sell goods, apply a brand name or trademark, or use patented technology owned by the licensor. In exchange, the licensee usually submits to a series of conditions regarding the use of the licensor's property and agrees to make payments known as royalties.

Benefits of Licensing

Licensing offers several benefits to both the licensor and the licensee. For the licensor, licensing can provide a source of revenue from an asset that the licensor may not have been able to exploit on its own. For the licensee, it can offer a way to gain access to a well-known brand or patented technology without having to create those assets from scratch.

See Also

• Franchising
• Intellectual Property
• Royalties

Licensing Resources
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