Licensee vs Licensor

Defined:
li·cen·see [lahy-suhn-see] - noun
a person, company, etc., to whom a license is granted or issued.

li·cen·sor [lī'səns-or] - noun
a person or company who grants official or legal permission to do or own a specified thing. See Synonyms at permission.

I had to be clear on these before I even ventured to the Licensing Show. Sure you know what they are but what are they REALLY? In terms of intellectual property or tangible things?

Well I went to the show thinking I was a licensee because my brand isn't well known enough to garner much attention. Certainly not the kind that some slightly larger companies were getting.


The show inspired me to go into licensing and scrap the whole manufacturing thing. But that's another blog post.

Some of the booths were so cool. They looked like little stores.


So it turns out that I was right (kind of) in thinking I'm the licensee because my brand does not have much equity yet. But I would only be a licensee if I was there to, say enter an agreement with an artist so I could put their designs on my line of kids clothes. I would be licensing their art in hopes that people would like it enough to buy it, thus selling my product because of their art. I make money, they make money.

But in another case, because I am a brand owner I would be a licensor. Say Stylease had brand equity and someone wanted to capitalize on the Stylease brand being connencted with mom-invented, problem-solving, well-made products. They would license the logo from me for their products and I would make a royalty on the sales of those products. People bought their products because of the Stylease brand. I make money, they make money.

But not just anyone is granted a license. If you have hardly any distribution and you want the Coca-Cola logo (for example) so you can get broader sales channels (grant me the logo and the sales will come) well, it doesn't work like that.

Coke wants to grant their logo to big companies with wide reach so they can get their name all over the place.

There are apparently no hard rules in licensing. Loose guidelines yes but with all the billions of dollars being made in the licensing industry, there is no such thing as a "Standard Licensing Agreement" every facet of every line of every thought or idea is negotiable.

This is a great thing. but also extremely dangerous if you don't know what you are doing. You would have to hire a consultant and licensing atty. to protect you from pitfalls like a single sentence in a wordy contract that negates a line somewhere else

>POOF< they don't owe you any royalties - didn't you understand line 58 b.1 section 7.

As intimidating as it was with the big guns signing HUGE agreements and renewing successful past deals, what struck me was the incredible energy everyone had. No one was moping around like at the apparel shows where I exhibit. People in licensing are very happy people.

And why shouldn't they be? Here is company A being approached by company B so everyone can make lots of money. And they do. A good licensing partnership is like the best marriage in the world.

Customers want to buy the brands they believe in and trust. Brand owners want to offer products in as many categories as are appropriate for their brand perception. It's a win win.

Next time I will discuss good and bad match-ups between brands and categories. Why some work and some don't.