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 typically includes an upfront fee and royalties. The arrangement provides the project owner or the holding company with regular, long-term income, while the owner of the innovation or creation remains the owner.
The license agreement specifies a term (e.g., 10 years) and a scope (e.g., applications or geographic areas).
A license can be granted 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.