Glossary

A licensing agreement is a legal contract between parties in which the owner of a patent, trademark, or copyrighted work permits another party to use that property for a specific purpose, under certain conditions, and for a defined timeframe. 

Licensing agreements are standard in art, film, music, publishing, and software industries.

The licensing agreement outlines clauses regarding exclusivity, territorial limitations, and quality control, as well as the terms and conditions of the use of the property — including the payment of royalties or licensing fees by the licensee to the licensor. 

The licensee also benefits by obtaining the right to use the property to create and distribute their own products.

By entering into a licensing agreement, the licensor can generate revenue from their intellectual property without producing or distributing the product themselves.