A Licensing Agreement is an agreement that allows one party to use the intellectual property (IP) of another party. This type of agreement gives the licensee the right to produce, market and distribute products based on the licensor’s IP. In exchange, the license fee or royalty payments are paid to the licensor. Through this arrangement, both parties can benefit: the licensor gains increased revenue for their IP, while the licensee is able to quickly enter the market with a brand new product without having to invest in research and development. Licensing agreements can be established for any type of IP, including patents, copyrights, trademarks, and trade secrets.