This website uses cookies to ensure you get the best experience on our website. Learn more

Got it!

license

Generally, a “license” is permission granted by a qualified authority permitting a licensee  to do something that would otherwise be prohibited. “License” may also refer to a physical document granting such permission, sometimes referred to as a permit . Licenses may have territorial and/or time limits and can be revoked  or forfeited .  

• Permissions granted by a license are limited by the licensor’s  power to confer such permissions. For example, in Gibbons v. Ogden  the Supreme Court  ruled that a license granted by New York state giving Ogden exclusive use of a water route was void because New York lacked the power to regulate interstate commerce.

• Licenses may be granted by public  or private entities. Common examples of public licenses include marriage licenses , professional licenses, business licenses , and licenses to drive. Examples of private licenses include licenses to use land  or intellectual property  owned by another.

With respect to real property , a “license” is permission to enter or use land or property  owned by another in a manner that would otherwise constitute a trespass . License to use or enter another’s land may be either express  or implied .

In intellectual property (“IP”) law, licenses allow individuals and entities to use patents , trademarks , and creative works owned by others without infringing  on the owners’ property rights. IP owners have the right to exclude others from using their property as conferred by statutes such as 35 U.S.C. § 154 . When IP owners license use of their IP to others, they  effectively agree to forfeit their right to exclude the licensees from using the IP for a typically limited amount of time. IP owners benefit from licensing because they maintain ownership over their IP while profiting from a licensee’s use of their IP. IP licenses are usually formed contractually  as license agreements with fixed terms, and owners usually profit from royalties  paid by the licensee in exchange for use of the IP. IP licensing is intended to reward innovators while incentivizing release of the IP into the public market.

[Last reviewed in June of 2020 by the Wex Definitions Team
]

Wex

• COMMERCE

• PROPERTY

• business law

• contracts

• wex definitions

• intellectual property