What Is Licensing?

Licensing is a business arrangement commonly regarded as an alternative to franchising. Under a licensing arrangement, the beneficial owner of the relevant intellectual property rights ("Licensor") grants the other party ("Licensee") the right to use or sell products or services under the Licensor's intellectual property rights ("Licence"). These intellectual property rights include copyrights, trademarks, trade secrets and patents.

Mechanisms of Licensing

In contrast with franchising which is governed by the Franchise Act 1998, the concept of licensing is not governed by any specific legislation. The concept of licensing is purely based on the terms and conditions of the contractual agreement between the Licensor and the Licensee, which is more commonly known as a Licence Agreement.