What is Licensing?

Licensing is the business of granting someone else permission to use a legally protected trademark, copyright, name, image, likeness, logo, or other intellectual property for use on or in connection with an approved product or service in exchange for a set fee or series of payments known as royalties.

Think of licensing as a form of rental or lease agreement, whereby a property owner (“licensor”) allows a manufacturer or organization (“licensee”) to use certain rights (a trademark, logo, image, likeness, etc.) for a specific purpose, for a set period of time, within a specified geographic area or distribution network, all in return for an agreed upon payment.

As a key component to any integrated marketing program, licensing serves as a tool for companies, organizations and institutions to complement and extend brands and properties into new markets, increase or perpetuate awareness, and generate supplemental income.

Licensing is a multi-billion dollar, worldwide industry involving thousands of properties, products, and services of all types. Thus if you’ve ever worn a hat or t-shirt bearing the logo of your favorite sports team, purchased products featuring your child’s favorite television show, movie, cartoon or comic strip, or come across a television commercial or magazine advertisement featuring the likeness of a favorite classic television or film star, then you’re already familiar—perhaps unwittingly—with the concept and power of licensing.