A license agreement allows the owner of a patent, trademark, or software to entrust its use to a third party in exchange for financial compensation. This compensation generally includes an up-front fee and royalties. This ensures regular long-term income for the project owner or the holding company, which remains the owner of the innovation or creation.
The license agreement specifies a term (e.g., 10 years) and a scope (e.g., in terms of applications or geographical areas).
It is possible to grant a license for any intellectual property right, including patents, trademarks, designs, and software. This gives a third party the right to produce, use, or market the invention.