Brand Licensing Basics

An easy way to get started on the topic of Brand Licensing is to break the subject into its two component parts – brand and licensing. Let's start with the latter part first. What is licensing? Licensing means nothing more than the renting or leasing of an intangible asset. An example of intangible assets includes a song (Somewhere Over The Rainbow), a character (Donald Duck), a name (Michael Jordan) or a brand (The Ritz-Carlton). An arrangement to license a brand requires a licensing agreement. A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor). Before we move any further, let's discuss what we mean when we use the term brand.