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In this lesson from Finance Strategist, Rainey explains licensing agreements, which are contracts that allow one party (licensee) to use the property of another party (licensor) for a fee. These agreements transfer ownership rights for temporary use and are commonly applied in intellectual property areas like patents, trademarks, copyrights, movies, music, and artwork. Examples include a movie studio licensing character copyrights to a toy manufacturer for action figures, and a pharmaceutical company licensing a drug patent to a third-party manufacturer in a lower-cost location. In real estate, revocable licensing agreements can replace leases, giving licensees limited rights since licensors retain control.
