A License and Royalty Agreement is an agreement between two parties, typically a licensor and licensee, where the licensor grants to the licensee the right to use, exploit or sell certain intellectual properties such as copyrights, patents, trademarks and designs. In exchange, the licensee pays the licensor a royalty fee, which may take either a variable form, depending on sales performance, or a fixed amount. This is an important business tool that allows companies to protect their intellectual property while expanding their income potential—it’s a win-win!