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A license (
American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the English language native to the United States. Currently, American English is the most influential form of ...
) or licence (
British English British English (BrE) is the standard dialect of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval England, which has eventually become the ...
) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another party (licensee) as an element of an agreement between those parties. In the case of a license issued by a government, the license is obtained by applying for it. In the case of a private party, it is by a specific agreement, usually in writing (such as a
lease A lease is a contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted wi ...

lease
or other contract). The simplest definition is "A license is a promise not to sue," because a license usually either permits the licensed party to engage in an activity which is illegal, and subject to prosecution, without the license (e.g.
fishing Fishing is the activity of trying to catch fish. Fish are often caught Wild fisheries, in the wild but may also be caught from Fish stocking, stocked bodies of water. Fishing techniques, Techniques for catching fish include Gathering seafood by ...
, driving an automobile, or operating a broadcast radio or television station), or it permits the licensed party to do something that would violate the rights of the licensing party (e.g. make copies of a copyrighted work), which, without the license, the licensed party could be sued, civilly, criminally, or both. In particular, a license may be issued by authorities, to allow an activity that would otherwise be forbidden. It may require paying a fee or proving a capability (or both). The requirement may also serve to keep the authorities informed on a type of activity, and to give them the opportunity to set conditions and limitations. A licensor may grant a license under
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The most well-known types are copyright ...
laws to authorize a use (such as copying software or using a
patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years in exchange for publishing an sufficiency of disclosure, enabling disclo ...

patent
ed invention) to a licensee, sparing the licensee from a claim of infringement brought by the licensor. A license under intellectual property commonly has several components beyond the grant itself, including a term, territory, renewal provisions, and other limitations deemed vital to the licensor. Term: many licenses are valid for a particular length of time. This protects the licensor should the value of the license increase, or market conditions change. It also preserves enforceability by ensuring that no license extends beyond the term of the agreement. Territory: a license may stipulate what territory the rights pertain to. For example, a license with a territory limited to "North America" (Mexico/United States/Canada) would not permit a licensee any protection from actions for use in Japan. Again, a shorthand definition of license is "a promise by the licensor not to sue the licensee". That means without a license any use or exploitation of intellectual property by a third party would amount to copying or infringement. Such copying would be improper and could, by using the legal system, be stopped if the intellectual property owner wanted to do so. Intellectual property licensing plays a major role in business, academia and broadcasting. Business practices such as
franchising Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion. Where implemented, a franchisor licenses some or all of its know-how, procedures, intellectual property, use of its busines ...
,
technology transfer Technology transfer (TT), also called transfer of technology (TOT), is the process of transferring (disseminating) technology Technology ("science of craft", from Ancient Greek, Greek , ''techne'', "art, skill, cunning of hand"; and , ''wikt:- ...

technology transfer
, publication and character merchandising entirely depend on the licensing of intellectual property. Land licensing (proprietary licensing) and IP licensing.


Real property licenses

A license provides one party with the authority to act on another's land, when such action would typically amount to trespass absent that license. A key distinction between licenses and leases is that a license grants the licensee a revocable non-assignable privilege to act upon the land of the licensor, without granting any possessory interest in the land. Once a license is agreed upon, the licensee may occupy the land only so far as is necessary to complete the act. Another key distinction between a license and a lease is that leases are generally required to be in writing, where the statute of frauds requires it, while licenses can be made orally.


Creation

A license is generally created by an express or implied agreement. The licensor must agree to the license which can be shown in writing or the licensors acquiescence in its exercise. Furthermore, unlike many other contractual agreements, a license does not require consideration, a license can be created with or without it. Moreover, whether an agreement is held to be a “license” and not a lease will depend on three essential characteristics of a license: (1) a clause allowing the licensor to revoke “at will"; (2) the retention by the licensor of absolute control over the premises; and (3) the licensor’s supplying to the licensee all of the essential services required for the licensee’s permitted use of the premises.


Termination

Under a pure licensing agreement, the licensor, under its terms and by common-law, can cancel the agreement at will and without cause, unless it is coupled with an interest or made irrevocable by contract. A license that has been coupled with an interest is not revocable by the licensor without exposure to liability and potential damages. In the event a license is coupled with an interest, the licensor must provide reasonable time for the licensee to remove that interest from the property prior to termination. Additionally, because a license does not confer any possessory interest in the licensee, in the event of a sale of the property, the license is terminated and cannot be enforced against the new owners of that property. Moreover, the death of either the licensee or licensor will terminate the agreement.


Remedies

If a license is revocable at will by the licensor, courts will be unable to grant specific performance in favor of the licensee. A licensee would be unsuccessful in bringing forcible entry claims or a detainer proceeding because the licensee was never granted any possory interest. The Licensee would also not be able to recover damages for money spent unless they are able to show detrimental reliance on the license. In certain cases, however, licenses can be made irrevocable, and specific performance may be granted. Where a license is made with a set term period and valid consideration is transferred, revocation of the license prior to the terms expiration may raise breach of contract claims that could provide damages against the licensor. Furthermore, once the licensor terminates or revokes the license, notice is statutorily required prior to the commencement of any special proceeding to recover possession of the property (e.g., in NY that requirement is 10 days).


Mass licensing of software

Mass distributed software is used by individuals on personal computers under license from the developer of that software. Such license is typically included in a more extensive
end-user license agreement An end-user license agreement (EULA, ) is a legal contract entered into between a software developer A computer programmer, sometimes called a software developer, a programmer or more recently a coder (especially in more informal contexts), is ...
(EULA) entered into upon the installation of that software on a computer. Typically, a license is associated with a unique code, that when approved grants the end user access to the software in question. Under a typical end-user license agreement, the user may install the software on a limited number of computers. The enforceability of end-user license agreements is sometimes questioned. As of 2020, there are various ways to license software with different kinds of licensing models, which allow software vendors to profit from their product offerings in flexible ways.


Patent licensing

Like other intellectual property, patent owners may grant permission to others to engage in conduct that would otherwise be within the scope of a patent. For example, a patent owner may authorize a licensee to make, use, sell, offer for sale, or import a patented product. Such agreements are typically referred to as a patent license agreement or a covenant not to sue. These agreements can last for a specific period of time (such as 5 years) or for the entire life of the patent (''i.e.,'' until the patent expires). Patent license agreements may also be exclusive (''i.e.,'' the licensee is the only person or entity that is allowed to sell, make, use, offer to sell, or import the patented invention) or non-exclusive (''i.e.,'' the licensee is simply one of several entities who has rights under the patent). Finally, any rights given under the agreement may be limited to a particular "field of use" (''e.g.,'' a licensee may be able to practice an invention in the field of consumer electronics, but not in the field of industrial electronics). Often, patent owners will require a licensee to pay money in exchange for granting a patent license. Such payments are referred to as
royalty payments A royalty is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or a fixe ...
and come primarily in two forms: lump sum or running royalty. A lump sum royalty involves an upfront, one-time payment, while a running royalty typically involves periodic payments (''e.g.,'' quarterly or annual) based on the number of patented products sold or imported.


Trademark and brand licensing

A licensor may grant permission to a licensee to distribute products under a
trademark A trademark (also written trade mark or trade-mark) is a type of intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual pr ...

trademark
. With such a license, the licensee may use the trademark without fear of a claim of trademark infringement by the licensor. The assignment of a license often depends on specific
contractual terms A contractual term is "any provision forming part of a contract". Each term gives rise to a contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agr ...
. The most common terms are, that a license is only applicable for a particular geographic region, just for a certain period of time or merely for a stage in the
value chain A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product (i.e., good 175px, In many religions, angels are considered to be good beings. In most contexts, the concept of g ...

value chain
. Moreover, there are different types of fees within the trademark and brand licensing. The first form demands a fee independent of
sales Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the goods or services, completes a sale in r ...

sales
and profits, the second type of license fee is dependent on the productivity of the licensee. When a licensor grants permission to a licensee to not only distribute, but manufacture a patented product, it is known as
licensed productionLicensed production is the production under license A license (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the English language nativ ...
.


Artwork and character licensing

A licensor may grant a permission to a licensee to copy and distribute
copyright Copyright is a type of intellectual property that gives its owner the exclusive right to copy and distribute a creative work, usually for a limited time. The creative work may be in a literary, artistic, educational, or musical form. Copyrigh ...

copyright
ed works such as "art" (e.g.,
Thomas Kinkade William Thomas Kinkade III (January 19, 1958 – April 6, 2012) was an American painter of popular realistic, pastoral A pastoral lifestyle is that of shepherds herding livestock around open areas of land according to season A sea ...
's painting ''Dawn in Los Gato'') and characters (e.g.,
Mickey Mouse Mickey Mouse is a Animated cartoon, cartoon Fictional character, character created in 1928 by Walt Disney and Ub Iwerks at Walt Disney Animation Studios, The Walt Disney Studios, who serves as the mascot of the Walt Disney Company. An Anthropo ...
). With such license, a licensee need not fear a claim of copyright infringement brought by the copyright owner.
Artistic license Artistic license (alongside more contextually specific derivative terms such as poetic license, historical license, dramatic license, narrative license, and creative license) refers to deviation from fact or form for artistic purposes. It can i ...
is, however, not related to the aforementioned license. It is a
euphemism A euphemism () is an innocuous word or expression used in place of one that is deemed offensive or suggests something unpleasant. Some euphemisms are intended to amuse, while others use bland, inoffensive terms for concepts that the user wishes to ...
that denotes freedom of expression, the ability to make the subject appear more engaging or attractive, by
fiction Fiction generally is a narrative form, in any media (communication), medium, consisting of people, events, or places that are imagination, imaginary—in other words, not based strictly on history or fact.William Harmon and C. Hugh Holman ''A Hand ...

fiction
alising part of the subject.


Academia

:''National examples of the licentiate are listed at
licentiate (degree) A licentiate (abbreviated Lic.) is a degree similar to a Master's degree A master's degree (from Latin ) is an academic degree awarded by University, universities or colleges upon completion of a course of study demonstrating mastery or a high-orde ...
'' A licentiate is an
academic degree An academic degree is a qualification awarded to students upon successful completion of a course of study in higher education, usually at a college or university. These institutions commonly offer degrees at various levels, usually including Bach ...
that traditionally conferred the license to teach at a university or to practice a particular profession. The term survived despite the fact that nowadays a
doctorate The cover of the thesis presented by Claude Bernard to obtain his Doctor of Medicine">Claude_Bernard.html" ;"title="thesis presented by Claude Bernard">thesis presented by Claude Bernard to obtain his Doctor of Medicine degree (1843) A doctorat ...
is typically needed in order to teach at a university. The term is also used for a person who holds a licentiate. In English, the degree has never been called a license. In France, the ''licence'' is the first degree awarded in Universities. In
Sweden Sweden ( sv, Sverige ), officially the Kingdom of Sweden ( sv, links=no, Konungariket Sverige ), is a Nordic countries, Nordic country in Northern Europe.The United Nations Group of Experts on Geographical Names states that the country's for ...
,
Finland Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the west, Russia to the east, Norway to the north, and is defined by the Gulf of Bo ...
, and in some other European university systems, a 'licentiate' is a postgraduate degree between the master's degree and the doctorate. The licentiate is a popular choice in those countries where a full
doctoral degree The cover of the thesis presented by Claude Bernard to obtain his Doctor of Medicine">Claude_Bernard.html" ;"title="thesis presented by Claude Bernard">thesis presented by Claude Bernard to obtain his Doctor of Medicine degree (1843). A doctora ...
would take five or more years to achieve.


Vehicle licensing

A license to driving certain vehicles has been applied to many countries around the world. Being allowed to drive a certain vehicle requires a specific driving license, the type of license depending on the type of vehicle.


Criminal law

In the United Kingdom prisoners serving a determinate sentence (a fixed time in prison) will be released prior to the completion of their full sentence "on licence". The licence is the prisoner's agreement to maintain certain conditions, such as periodic reporting in to a probation officer and only living at an approved address, in exchange for their early release. If they break the conditions of the licence, they can be "recalled" (returned to prison). Offenders serving determinate sentences are released automatically at a set point in their sentence, whereas prisoners serving indeterminate sentences (e.g.
life imprisonment Life imprisonment is any sentence (law), sentence of imprisonment for a crime under which convicted people are to remain in prison either for the rest of their natural lives or until pardoned, paroled or otherwise commuted to a fixed term. Crim ...

life imprisonment
) can only be released by the
parole boardA parole board is a panel of people who decide whether an offender should be released from prison on parole after serving at least a minimum portion of their sentence as prescribed by the sentencing judge. Parole boards are used in many jurisdiction ...

parole board
.


Economic theory

Patent licensing has been studied in formal economic models in the field of
industrial organization In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of good ...
. In particular, Katz and Shapiro (1986) have explored the optimal licensing strategy of a research lab selling to firms who are competitors on the product market. It turns out that (compared to the welfare-maximizing solution) the licensor’s incentives to develop innovations may be excessive, while the licensor’s incentives to disseminate the innovation are typically too low. Subsequently, the seminal work of Katz and Shapiro (1986) has been extended in several directions. For example, Bhattacharya, Glazer, and Sappington (1992) have taken into account that the firms acquiring licenses must make further investments in order to develop marketable products. Schmitz (2002, 2007) has shown that asymmetric information due to
adverse selection In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods a ...
or
moral hazard#REDIRECT Moral hazard In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economi ...
may lead the research lab to sell more licenses than it would do under complete information. Antelo and Sampayo (2017) have studied the optimal number of licenses in a
signalling In signal processing Signal processing is an electrical engineering subfield that focuses on analysing, modifying, and synthesizing signals such as audio signal processing, sound, image processing, images, and scientific measurements. Sig ...
model.


Criticism

The provision of licenses and the agencies that mandate them are often criticised by American libertarians like
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and c ...

Milton Friedman
for creating an anticompetitive environment for occupations, which creates a
barrier to entry In theories of competition Competition arises whenever two or more parties strive for a common goal A goal is an idea of the future or desired result that a person or a group of people envision, Planning, plan and commit to achieve. Peop ...
for more qualified and skilled individuals who may not have the resources to obtain the necessary licences. According to Friedman, licenses and permits have become so burdensome due to legislation that favors the current establishment of wealthy occupants that they decrease the supply of such occupations, which raises prices for the average consumer. Libertarians and the anti-authoritarian left (
anarcho-communists Anarcho-communism, also known as anarchist communism, is a political philosophy Political philosophy is the philosophical study of government, addressing questions about the nature, scope, and legitimacy of public agents and institutions and t ...
) view competing guilds and other voluntary communes as being more beneficial for disseminating the skills and education required to perform a specified career.


See also

Intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The most well-known types are copyright ...
-related: *
Brand licensing Licensing means renting or leasing of an intangible asset. It is a process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed perio ...
*
Compulsory license A compulsory license provides that the owner of a patent NPOV disputes from March 2021 A patent is a Title (property), title that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited per ...
*
Cross-licensingA cross-licensing agreement is a contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the ...
*
Free license A free license or open license is a license agreement which contains provisions that allow other individuals to reuse another creator's work, giving them Four Freedoms (Free software), four major freedoms. Without a special license, these use ...
*
Licensed productionLicensed production is the production under license A license (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the English language nativ ...
*
Music licensing Music licensing is the licensed use of copyright Copyright is a type of intellectual property that gives its owner the exclusive right to make copies of a creative work, usually for a limited time. The creative work may be in a literary, art ...
* Smartphone patent licensing and litigation *
Software license A software license is a legal instrument (usually by way of contract law A contract is a legally binding agreement that defines and governs the rights and duties between or among its Party (law), parties. A contract is legally enforceable w ...
*
Statutory license A compulsory license provides that the owner of a patent or copyright licenses the use of their rights against payment either set by law or determined through some form of adjudication or arbitration. In essence, under a compulsory license, an in ...
Other: *
Amateur radio license Amateur radio, also known as ham radio, is the use of radio frequency radio spectrum, spectrum for purposes of non-commercial exchange of messages, wireless experimentation, self-training, private recreation, radiosport, contesting, and emergen ...
*
Banking license A banking license is a legal prerequisite for a financial institution Financial institutions, otherwise known as banking institutions, are corporations that provide services as intermediaries of financial markets. Broadly speaking, there are ...
*
Broadcast license A broadcast license is a type of spectrum license granting the licensee permission to use a portion of the radio frequency Radio frequency (RF) is the oscillation rate of an Alternating_current, alternating electric current or voltage or of a ...
*
Dog licence The dog licence tag might be one of several dog tags worn. A dog licence is required in some jurisdictions to be the keeper of a dog. Usually a dog-licence identifying number is issued to the owner, along with a Pet tag, dog tag bearing the iden ...
*
Driver's license A driver's license is a legal authorization, or the official document confirming such an authorization, for a specific individual to operate one or more types of motorized vehicles—such as motorcycles A motorcycle, often called a motorb ...
*
Firearms license A firearms license (also known as a gun license; or licence in British English British English (BrE) is the standard dialect of the English language English is a West Germanic languages, West Germanic language first spoken in H ...
* Golf license *
Hunting license A hunting license is a regulatory or legal mechanism to control hunting. Hunting may be regulated informally by unwritten law, self-restraint, a moral code, or by governmental laws. The purposes for requiring hunting licenses include the p ...
*
Law licenseAn admission to practice law is acquired when a lawyer receives a license to practice law. In jurisdictions with two types of lawyer, as with barristers and solicitors, barristers must gain admission to the bar whereas for solicitors there are distin ...
* License to kill *
Licensee A licensee can mean the holder of a license A license (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the English language native to t ...
* Licensing context (linguistics) *
Liquor license A liquor license (or liquor licence in most forms of Commonwealth English The use of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, early medieval Engl ...
*
Marriage license A marriage license (or marriage licence in English in the Commonwealth of Nations, Commonwealth spelling) is a document issued, either by a religious organization or state authority, authorizing a couple to marriage, marry. The procedure for ...
*
Medical license A medical license is an occupational license that permits a person to legally practice medicine Medicine is the Art (skill), art, science, and Praxis (process) , practice of caring for a patient and managing the diagnosis, prognosis, Preventi ...
*
Pilot license Pilot licensing or certification refers to permits for operating aircraft An aircraft is a vehicle that is able to flight, fly by gaining support from the Atmosphere of Earth, air. It counters the force of gravity by using either Buoyancy, ...
*
Professional license Licensure means a restricted practice or a restriction on the use of an occupational title, requiring a license. A license created under a "practice act" requires a license before performing a certain activity, such as driving a car on public roads ...
*
Television licence A television licence or broadcast receiving licence is a payment required in many countries for the reception of television broadcasts, or the possession of a television set where some broadcasts are funded in full or in part by the licence fe ...
* Vehicle license


References


External links

* {{Authority control Business law Strategic alliances Revenue models