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In this YouTube tutorial, Andrew Krause explains the basics of licensing contracts. He discusses the difference between patents and licensing agreements, emphasizing that a licensing agreement is the deal made with a company to pay royalties for selling a product. He highlights the importance of having a licensing agreement, mentioning that some companies may not be concerned with patents and are willing to pay royalties without the need for a patent. It is essential to understand the purpose and terms of a licensing agreement when entering into a partnership with a company.