Licensing is the process of obtaining authorization from a company (licensor) to produce and distribute its products in a specific market area. The licensee pays a royalty to the licensor for this privilege.

Now let’s see some types of licensing:

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Software licensing in mass

Individuals acquire licenses to use software on multiple devices, allowing installation on several computers. For instance, an operating system requires a license for usage.

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Patent

Licenses granted by patent holders enable licensees to engage in patent-related activities. Obtaining rights to use patented products, techniques, or services in a company can be costly.

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Brand and trademark licensing

This type of licensing permits the licensee to distribute products under the licensor's brand name. Specific contractual agreements are necessary, defining geographic areas and duration of use for the trademark.