Legal Definitions - licensor

A licensor is an individual or entity that owns a specific right or property and grants another party (known as the "licensee") limited permission to use that right or property. This permission, called a license, allows the licensee to engage in activities that would otherwise be restricted by the licensor's ownership.

Crucially, the licensor retains ultimate ownership of the underlying right or property. The license only conveys specific, often temporary or restricted, usage rights, rather than transferring full ownership. To be a valid licensor, the party must legally possess the authority and rights to grant the permissions outlined in the license agreement.

Here are some examples illustrating the role of a licensor:

• Software Company: "CodeCraft Inc." develops a popular graphic design software called "PixelPro." When customers purchase PixelPro, they don't buy the software itself; rather, CodeCraft Inc. grants them a license to install and use the software on their computers according to the terms of an End-User License Agreement (EULA). In this scenario, CodeCraft Inc. is the licensor because it owns the copyright to the PixelPro software and provides its users with limited, revocable permission to operate it, retaining full ownership of the software's intellectual property.

• University Research Department: A university's biology department, "Academia Labs," invents a new, highly effective compound for treating a rare disease. Academia Labs holds the patent for this compound. To bring the treatment to market, Academia Labs partners with "PharmaInnovate Corp.," a pharmaceutical company. Academia Labs grants PharmaInnovate Corp. an exclusive license to manufacture, distribute, and sell drugs containing the patented compound. Academia Labs is the licensor because it owns the patent rights to the compound and grants PharmaInnovate Corp. the specific rights to commercialize it, while still retaining ownership of the patent.

• Brand Owner: "Global Coffee Co." owns a widely recognized trademark for its distinctive coffee cup logo. A manufacturer, "MugMaster Inc.," wants to produce a line of branded coffee mugs featuring Global Coffee Co.'s logo. Global Coffee Co. enters into a licensing agreement with MugMaster Inc., allowing them to use the logo on their mugs for a set period and royalty fee. Global Coffee Co. acts as the licensor in this arrangement, as it owns the trademark and grants MugMaster Inc. permission to use its protected brand identity on products, without transferring ownership of the trademark itself.