Licensing is the most common method to acquire the right to exploit IP. In a good licensing agreement, both parties benefit. The licensor gains the benefit of a brand extension and revenue (via royalties) without any investment in product development, production, or marketing.
Confused? Check this video to understand the different jargons associated with licensing:
Brand licensing is the leasing of a brand name to a company other than the owner of that particular brand.
While licensing agreements by their nature tend to be one-sided to protect the brand owner, a solid understanding by both parties will ensure everyone gets off on the right foot.
Also Read: Here’s why licensing is important for brand