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A party granting a license. To grant a valid license, licensors must possess the legal power to convey the limited rights provided by the license. For example, a public entity must have the authority to grant marriage licenses for the licenses granted by the entity to be valid, and a company must possess complete ownership of a patent to license use of that patent to another entity.

The term “licensor” is most commonly used when referring to intellectual property licensing. Patents, trademarks, and other intellectual property confers the right to exclude others from using the property to the intellectual property owner. For example, under 35 U.S.C. § 154, a patent grants the patent owner “the right to exclude others from making, using, offering for sale, or selling the invention.” Intellectual property owners may agree to forfeit their right to exclude for a limited time by licensing use of their property to a licensee, making the owner a licensor. Intellectual property licensors retain ultimate ownership of their intellectual property when they license use to a licensee. Licensors usually contract use of their owned patents to licensees in licensing agreements which may include terms set by both licensor and licensee. By licensing owned intellectual property, licensors are able to profit without manufacturing or selling products themselves.  

[Last updated in June of 2020 by the Wex Definitions Team]