A licence is an agreement that allows the licensee to do an act which would otherwise be the exclusive right of the licensor.
Licensing-out is commonly engaged in by companies without the resources fully to commercialise their Intellectual Property Rights (IPR). Larger companies may conversely licence-in, assisting others in developing their products. A licence may be exclusive (only the licensee can exploit the IPR) sole (where both the licensor and the licensee can use the IPR) or non-exclusive (where the licensor can appoint other licensees). The licence major may not include the right to the licence to grant sub-licences to others within the territory.