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Explain Technology Licensing

Technology Licensing: It is the agreement whereby an owner of a technological intellectual property (that is, the licensor) permits another party (that is, the licensee) to employ, modifies, and/or resells that property in exchange for compensation (that is, consideration). The compensation might take the form of a (a) lump sum royalty, (b) royalty totally based on the volume of production (termed running royalty), or (c) right to use licensee's technology (termed cross licensing). Via licensing of proprietary technology, small firms can earn substantial income from markets which they could not penetrate on their own, and big firms can have foreign affiliates devoid of high financial and lawful risks.

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