Licensing (2024)

FAQs

What is an example of a licensing strategy? ›

For instance, the company behind a major television series may enter into a licensing agreement, allowing Netflix to include the show among its titles for a certain number of years. In exchange, Netflix would agree to provide royalties to the content owner from fees it collects from its subscribers.

You keep ownership of your intellectual property - Licensing allows you to give suppliers, competitors or complementary businesses certain rights over your patent while receiving royalty income and still retaining ownership of your asset.

Licensing is a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. Licensing generally involves allowing another company to use patents, trademarks, copyrights, designs, and other intellectual in exchange for a percentage of revenue or a fee.

Some advantages of software licensing include the 3 Ps of licensing: portability, piracy, and profitability.

Licensed Solutions means a product, including diagnostic kits, research reagents, proprietary compositions, substances, methods, services or a part thereof, the manufacture, use, sale, offer to sell, importation, distribution, or transfer of which.

Loss of Control: Licensing involves giving up control over the licensee's manufacturing and marketing operations. This can lead to concerns about maintaining quality standards and consistent brand identity, potentially harming a company's reputation.

Entry into new markets: Licensing can help you enter new markets without having to establish a physical presence or invest in local resources. By partnering with a licensee, you can leverage their knowledge and expertise in the local market to expand your business.

Licensing is essentially an agreement between you (the licensor) and another party (the licensee) to take your product to market. In return, you receive either a lump sum or royalty payments for each item sold.

Licensing is useful for small businesses to generate a high income with less overhead and production costs. A small market will get better market coverage and diffuse the conflicts between businesses.

Why is licensing low risk? ›

Although the multinational firm usually has no ownership interests, it often provides ongoing support and advice. Most companies consider this market-entry option of licensing to be a low-risk option because there's typically no up-front investment.

A license is an agreement through which a licensee leases the rights to a legally protected piece of intellectual property from a licensor — the entity which owns or represents the property — for use in conjunction with a product or service.

Licensing is a rapid entry strategy, allowing almost instant access to the market with the right partners lined up. Licensing is low risk in terms of assets and capital investment. The licensee will provide the majority of the infrastructure in most situations.

For example, a company that manufactures toys may license its brand name to a company that produces children's clothing. The clothing company pays the toy company a fee and/or royalties to use the brand name on its clothing.

What is brand licensing? Brand licensing is the act of giving permission to another company to use your business's intellectual property (IP). Brand owners lease their patents, software, or characters to other companies. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it.

Licensing is a type of market entry whereby a company in one country transfers the right of a company in another country to use its unique production processes, patents, trademarks, technological achievements, and other valuable skills for a fee that is established under the contract.

Expanding Product Portfolio through Licensing. One of the strategies that Coca-Cola has used to grow its brand and product portfolio is licensing. Licensing is a business arrangement in which one company gives another company permission to manufacture its product for a specified payment.