What is the name of a contract that grants rights to use intellectual property?

A licensing agreement is a legal contract that allows one party to use the intellectual property of another party under specified conditions. This type of agreement is crucial for businesses and creators, as it enables them to monetize their inventions, trademarks, copyrights, or patents while still retaining ownership of the intellectual property. The terms of the licensing agreement outline how the licensee can use the intellectual property, the duration of the agreement, and any compensation involved, such as royalties or lump-sum payments.

In the context of startup fundamentals, understanding licensing agreements is vital for startups that want to leverage existing intellectual property to enhance their offerings or market presence without undertaking the full process of development. It provides a structured approach to utilize valuable assets while minimizing risks associated with intellectual property infringement.