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Professional Vocabulary


LICENSING means the use of intellectual property objects in the production, design, advertisement of products and services. Licensing unites the interests of the owners of brands, manufacturers and retailers, allowing you to fully discover and expand the potential of the brand.

There are several types of licensing in the world licensing market:

  • Characters and entertainment content licensing
  • Trademarks and corporate brands licensing
  • Licensing in fashion
  • Licensing in sport
  • Licensing in art

  • LICENSOR – the owner of the images, brands, trademarks, know-how, intellectual property as it is sometimes referred to. Licensors may represent their right directly or appoint a specialist agency to represent them – a licensing agent or licensing agency.

    LICENSEE – legal entity / individual person or an entrepreneur holding a license for a particular activity or use of the intellectual property object, agreeing to pay royalties.

    LICENSING AGENCY – legal entity, authorized representative of licensor, vested with the right to negotiate on his behalf, to license, supervise the fulfillment of licensing agreements and implement the legal protection of brands.

    LICENSING AGREEMENT - a contract in which one party (the licensor) grants the right to use objects of intellectual property (license), and other party (the licensee) pays for it appropriate remuneration (royalty).

    License agreement term depends on the parties discretion. This should take into consideration the terms of validity of patents and certificates. Simultaneously with the term of validity of the contract can be defined modalities for its entry into force, the procedure for extension or early termination.

    GUARANTEE PAYMENTS - non-returnable amounts paid in the time of licensing agreement signing or in installments within a specified time, what is the insured value of the license agreement.

    LICENSING PAYMENTS – payment by a legal entity or individual person to the intellectual property owner or creator of something for the right to use this property for commercial purposes. License fees are set in licensing contracts proceeding, as a rule, either fr om real economic returns fr om the use of the license, or on the basis of licensee expected profit.

    ROYALTY – compensation for the use of licensing rights, paid to the licensor representing a certain % on the licensed products sales.

    AGREEMENT APPLICATION TERRITORY – is a list of the countries (regions), in the territory of which the licensee is granted the right to use patents, certificates or know-how. Depending on the volume of provided rights under a licensing agreement they distinguish:

  • The territory of the exclusive rights – the list of the countries (regions) wh ere the licensee is granted the exclusive right to license;

  • The territory of non-exclusive rights – the list of the countries (regions), wh ere the licensors retains the right to license and transfer them to third parties.

  • STYLE GUIDE – guide of the licensor (copyright holder) for licensees to the brands, passed for rent (usually includes principles and guidelines for the design, packaging, presentation of goods in retail, the principle of quality control etc.).

    DISTRIBUTION CHANNELS – retail networks, through which sales (direct sales) of licensed products are organized. .

    QUALITY CONTROL – licensor control for the products \ services of the licensee; the question of quality control is the most acute for companies which give brands in rent. The licensor has the right to check how far the licensee maintains the level of products quality, how it corresponds to the design and characteristics of the corporate style of the brand.

    DIRECT-TO-RETAIL – license agreement, by which licensor grants the right to use the brand to the retailer directly (instead of the manufacturer). In this case, the retailer is responsible for the royalty payments and the products quality.

    RAITING OF BRANDS REPRESENTING IN LICENSING – this rating is based on monitoring of federal retail networks, specialized stores, industrial exhibition and thematic fairs. 

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