Licensing intellectual property enables you to retain ownership of your Intellectual Property while permitting others to make some use of it.
The nature of the licensing agreement needed depends on the IP you are licensing. Is it use of a brand, technology, content, designs, or what? Licensing depends on having the necessary rights in the first place, so first make sure that you own these.
Licensing can be an excellent way to introduce a new revenue stream to your business, and arises commonly in the following situations:
- When a business franchises its format (See: Franchising)
- Where a business wants to enable others to make use of technology (Technology Licensing)
- Where computer software is ‘sold’ to consumers – in reality a licence is granted to use the software.
- Merchandising – which is common in the entertainment industry.
- Sponsorship whereby sponsors allow you to use their brand during promotions.
- Endorsement or product placement