licensing defined

Licensing offers a way of getting to existing or new markets more quickly and at less expense. Licensing is granting the right to make, use or sell a proprietary product, process, or service in return for a payment in the form of Royalties.

A license is the grant of permission or rights, the granting being done by a party that has the right to do so.

A licensing agreement is the formal embodiment of this arrangement, specifying the parameters of the permission granted.  It includes the territory in which it can be used, the length of time as well as other terms and conditions including amount and schedule of payments and whether an advance is going to be provided as well.

Licensing requires three things:

1. A product, defined as a product, service, or process.

2. A seller, defined as the licensor, the owner of intellectual property

3. A buyer, defined as the licensee, the party obtaining permission to use the product.

Licensing is a strategic tool for growing a business.

A successful business relationship is the ultimate strategy in Licensing.

The search for a licensing partner requires an escalating need to gather, organize, and analyze information.

This gathering of information starts with the industry or industries where your product or service is likely be put to use. It proceeds to  the firms in those industries that can best use your products or that can best sell them within the target industries.