Briefly discuss licensing and its benefits-01078

Licensing is an arrangement between two parties, where one party has proprietary rightsprotected by a patent, trademark, or copyright. This requires the licensee to pay a royaltyto the holder of the proprietary rights in return for permission to copy the patent.Licensing has significant value as a marketing strategy to holders of patents.

Benefits:

There are various ways in which a license agreement can give the licensee thepossibility of increasing revenues and profits, and of enlarging market share:?There is often a rush to bring new products onto the market. A license agreement that gives access to technologies which are already established or readily available can make it possible for an enterprise toreach the market faster.

Small companies may not have the resources to conduct the research anddevelopment necessary to provide new or superior products. A licenseagreement can give an enterprise access to technical advances thatwould otherwise be difficult for it to obtain.

A license can also be necessary for the maintenance and development ofa market position that is already well established but is threatened by anew design or new production methods. The costs entailed in followingevents and trends can be daunting, and quick access to a new technologythrough a license agreement may be the best way to overcome thisproblem.

There may also be licensing-in opportunities which, when paired withthe company's current technology portfolio, can create new products,services and market opportunities.