According to Andrew Wakefield the transfer of rights to manufacture or market a particular product to another individual or organization through a legal arrangement or contract. It usually requires that a fee, commission, or royalty is paid to the licensor. Isa practice of allowing a manufacturer to affix the idea ,character , design , or other representation owned by another to his product.
The licensing is just a marketing tool, although some experts consider it a "weapon" with many opportunities It is an contractual agreement between two business entities whereby the licensor (selling firm) allows the licensee (the buying firm) to use its Technology Patents Trademarks Designs Processes Intellectual propertyin exchange for a fee or a royalty.
The major objective of licensing system is to give effect to the industrial policy of the government. To regulate the location of industrial units so as to secure a balanced regional development. To protect and promote small scale sector. To regulate foreign capital and technology. To maintain a proper demand-supply balance. To encourage exports and the substitution of imports. To conserve foreign exchange.
Profitable business strategy, particularly when the economy begins to flourish again. Is an excellent option for the entrepreneur to increase revenues, without risk. Licensing can also be a way to start a new venture when the idea may infringe on someone else’s patent, trademark, or copyright. Powerful marketing tool
Of licensing for the licensor are the loss of control over the technology and the associated risk of exploitation or piracy of the intellectual property. Inadequate support from the licensor The pay of royalties in a local currency Import restriction and tariffs that are suddenly imposed after a company has established a market for its products in the country through exports pose a difficult problem for the company
Toys Licensing is very popular in the toy industry, because it allows toy manufacturers to come out with many new toys each year. Even toys based on popular movies and television shows are licensed from their inventors. You may see licensed toys from Batman Begins, Star Wars, Harry Potter, and Shrek at your favorite department store or toy store.