Licensing o The licensor permits the licensee to use its intellectual property(an intangible)in exchange for a royalty payment Advantages of licensing No capital investment, knowledge, or marketing strength Huge profit potential, recovered costs Minimal risk of government intervention A stage in internationalization Preempt market entry before competition Increasing intellectual property rights protection Copyright 2001 by Harcourt, Inc. All rights reservedCopyright © 2001 by Harcourt, Inc. All rights reserved. 9-3 Licensing The licensor permits the licensee to use its intellectual property (an intangible) in exchange for a royalty payment. Advantages of licensing • No capital investment, knowledge, or marketing strength • Huge profit potential, recovered costs • Minimal risk of government intervention • A stage in internationalization • Preempt market entry before competition • Increasing intellectual property rights protection