Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia.
- the assignment by one firm to another (exclusive licence) or a number of firms (non-exclusive licence) of the right to use its technology or distribution network or to produce its product. Similarly, the grant by the government to an authority (for example an airport) or firm of the rights to supply a particular product. Licences are contractual arrangements which are entered into usually for a specified period of time, with the licensee paying a lump sum payment and/or a royalty or fee for the rights assigned. For an innovating firm with limited financial resources of its own, licensing offers a means of obtaining extensive national and international sales potential (see FOREIGN MARKET SERVICING STRATEGY) and a quick return on its risk capital. The danger is that the firm, by providing actual and potential (long run) competitors with its know-how etc., will lose control of core technology and products to rival producers. To safeguard this and also to provide greater technological collaboration between firms working both in complementary and diverse areas, a cross licensing arrangement may be established involving the reciprocal licensing of each other's products or technology.
- a document issued by a licensing authority as a means of ensuring that persons or premises are ‘fit and proper’ for the activities in which they are engaged, for example, an investment adviser or premises for the consumption of alcoholic drink.
- a document which shows proof of legal ownership (or entitlement) or compliance with a statutory or private requirement in which a fee is payable, for example a television licence issued by the government, or a private fishing licence. See EXPORT LICENCE.
- the grant by one FIRM to another firm (exclusive licence) or others (nonexclusive licence) of the right(s) to manufacture its product, or to use its technology or distribution facilities. Similarly, the grant by the government to an authority (for example, a gas corporation) or firm of the rights to supply a particular good or provide a particular service. The granting of a licence in these cases is a CONTRACTUAL arrangement that is entered into, usually for a specified period of time, with the licensee usually paying a ROYALTY or FEE for the rights assigned. See EXTERNAL GROWTH, STRATEGIC ALLIANCE, FOREIGN MARKETING SERVICING STRATEGY.
- a document that shows proof of legal ownership (or entitlement) and compliance with a statutory or private requirement for a payment thereon, for example, a television licence issued by the government or a private fishing licence. Such licences are issued primarily for the purpose of raising revenue.
- a document issued as a means of ensuring that premises or persons are ‘fit and proper’ for the purposes in which they are engaged, for example, a licensed casino, a licensed dealer in securities.