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What is a License and what Licensing Involves?

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A license refers to the legal permission to do something or be somewhere, such as drive, operate heavy machinery, or even perform surgery. You might think of your driver’s license when you think of licensing; this document proves that you are authorized to drive a car and gives you certain rights, but it also comes with certain responsibilities.

Licensing is not just associated with driving; in fact, there are many different types of licenses and applications you can fill out to get your own license or certification. Below, we’ll look at these different types of licenses and explain what they entail.




What Is A License?

A license is a legal document that gives a person or organization permission to do something. Licenses are typically requested from an authority, such as a government agency or educational institution. For example, if you’re going to drive in certain areas, you need a driver’s license. Similarly, when people learn a new skill—such as scuba diving—they often have to pass an exam before they receive certification or licensure.

To become certified or licensed, individuals usually need to study at an accredited school and pass several exams given by an outside agency. Sometimes individuals will purchase books, watch instructional videos and pay for other supplemental materials to prepare for tests.


Legalities of Licensing

When you license your invention, you are not selling it, but rather giving someone else permission to sell it. In fact, a signed license agreement legally prohibits you from trying to compete with or sell your invention in any way. This allows others to invest their time and money into marketing and distributing your invention while you keep 100% of all profits.

If you want to go into business for yourself but don’t want all of the hassle that comes with creating a new product line and manufacturing processes, then licensing may be right for you. Once your licensed product is ready for production, either by yourself or another company that paid you a licensing fee (royalty), they will produce it according to agreed-upon specifications in accordance with patents that are specific to each product type.


The Pros And Cons Of Licensing

Before you think about licensing your work, be aware that most licenses are non-exclusive. This means that if a company wants to use your work in an advertisement and another company wants to use it for a magazine spread, both companies will have access to it. In essence, by licensing your work, you are extending its reach without hindering yourself.


Create Your Own Product Line

One common way to gain market share is to create a product line. Most large companies have their own product lines, but even if you’re just starting out on your own, you can do it too. A product line involves coming up with different versions of one thing—for example, five different flavors of jam or five types of hats.

Instead of selling each flavor or type individually (which can be expensive), you sell them as a package deal and reap more rewards in return. Once you get going, you could also consider developing and selling add-ons to your main products—such as candies that match your flavors of jam or headbands that match your hats.



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