‘Partnerships’ are often used to help companies enter new markets and reach new customers. Trademark licensing is a common partnership form or type.
‘Licensing’ refers to the use of trademark or copyright by a third-party licensee to enhance the appeal of a product or service. Licensing is used by companies across a wide range of markets and product categories.
Licensors ‘license-out’ their trademarks to obtain marketing benefits and high margin royalty revenue. Licensees ‘license-in’ trademarks to gain high consumer awareness and appeal for products to generate incremental product sales.
The licensing business is often defined by the type of intellectual property (I.P.), and the product category that is licensed. Licensed trademarks and copyrights can be a brand, corporate name, character, entertainment, celebrity, designer, sports, art, music, or nonprofit.
There are two common forms of trademark licensing: conventional and brand extension. The difference is important because the approach and requirements can vary dramatically.
Conventional trademark licensing includes characters, designs or trademarks that are used to convey an affiliation and/or for aesthetics purposes.
Brand extension trademark licensing involves extending into new product category that benefits from the licensed brand identity.
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