Licensing is a legal agreement in which the owner of intellectual property (the licensor) grants permission to another party (the licensee) to use that property under defined conditions, often in exchange for payment such as royalties
. The intellectual property involved can include trademarks, patents, copyrights, brand names, technology, or know-how
. Key features of licensing include:
- The licensee is authorized to use the licensor’s property, typically for manufacturing, marketing, or selling products or services
- The agreement specifies terms such as geographic regions, duration, exclusivity, and scope of use
- Licensing allows companies to enter new markets or expand their business with lower risk and investment, leveraging existing brands or technology without direct ownership transfer
- The licensor retains ownership of the property but permits the licensee to exploit it commercially
- Licensing agreements help avoid legal disputes by clearly defining rights, usage limits, and compensation
In essence, licensing acts as a business tool enabling the controlled use of protected intellectual property, facilitating brand extension, commercialization, and international expansion without the licensee owning the property outright
. Examples of licensed assets include logos, software, music, technology, patents, and copyrighted works
. Thus, licensing can be understood as a formal "rental" or permission system that legally allows one party to use another party’s protected property under agreed conditions
