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((Short description|Renting or leasing of an intangible asset))
((Refimprove|date=September 2010))
((marketing))
'''Brand licensing''' means renting or leasing of an [[intangible asset]]. It is a process of creating and managing [[contracts]] between the owner of a [[brand]] and a company or individual who wants to  use the brand in association with a product, for an agreed period of time, within an agreed territory. Licensing is used by brand owners to extend a [[trademark]] or character onto products of a completely different nature.<ref>((cite book|title=Integrated Intellectual Asset Management|first= Steve|last= Manton|year=2005|publisher=Gower Publishing, Ltd.|isbn=0-566-08721-9))</ref>

Examples of intangible assets include a song ("[[Over the Rainbow]]"), a character ([[Donald Duck]]), a name ([[David Beckham]]), or a brand ([[Rolls-Royce Motor Cars|Rolls-Royce]]). An arrangement to license a brand requires a licensing agreement. A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor).

== History ==

[[File:Beatrix potter certificate of registration for a peter rabbit doll.jpg|thumb|upright=1.1|1903 [[Intellectual Property Office (United Kingdom)|patent]] for a [[Peter Rabbit]] soft toy created by [[Beatrix Potter]]]]

Brand licensing is a well-established business, in both [[patent]]s and [[trademark]]s. A concept established in British business, the world's first licensed character was a soft toy of [[Peter Rabbit]], a fictional character created by [[Beatrix Potter]] and patented in 1903, to be sold alongside the first public edition of ''[[The Tale of Peter Rabbit]]''.<ref name="Wagner 2009">((cite news |last=Wagner |first=Erica |title=Peter Rabbit blazed a trail still well trod |url=https://www.thetimes.co.uk/article/peter-rabbit-blazed-a-trail-still-well-trod-c9zdfx2c6nk |date=23 December 2009 |access-date=25 April 2023|work=[[The Times]]))</ref><ref name="Eccleshare 2002">((cite news |last=Eccleshare |first=Julia |title=Peter Rabbit Turns 100 |url=https://www.publishersweekly.com/pw/print/20020422/30115-peter-rabbit-turns-100.html |access-date=21 March 2023 |work=Publishers Weekly |date=22 April 2002))</ref> Merchandise of Peter and other Potter characters have been sold at [[Harrods]] department store in London since at least 1910 when the range first appeared in their catalogues.<ref>((cite news |title=Peter Rabbit hops into Harrods in film affiliation |url=https://www.luxurydaily.com/peter-rabbit-hops-into-harrods-in-film-affiliation/ |access-date=11 May 2023 |work=Luxury Daily))</ref> For the rest of her career, Potter would continue to oversee merchandising and licensing opportunities for her characters, with Peter depicted in a multitude of spinoff merchandise such as porcelain figurines, painting books and dishes.<ref name="Wagner 2009"/><ref name="Eccleshare 2002"/>

Trademark licensing also has a rich history in American business, largely beginning with the rise of mass entertainment such as the movies, comics and later television. [[Mickey Mouse]]'s popularity in the 1930s and 1940s resulted in an explosion of toys, books, and consumer products with the lovable rodent's likeness on them, none of which were manufactured by the Walt Disney Company. [[McDonald's]] play food, [[Burger King]] T-shirts and even ghastly [[Good Humor]] Halloween costumes became commonplace. [[Brand extension]]s later made the brand licensing marketplace much more lucrative, as companies realized they could make real dollars renting out their equity to manufacturers. Instead of spending untold millions to create a new brand, companies were willing to pay a royalty on net sales of their products to ''rent'' the product of an established brand name. [[Armor All]] auto vacuums, [[Breyers]] yogurt, [[TGI Friday's]] frozen appetizers, and [[Lucite]] nail polish are only a handful of the products carrying well-known brand names which are made under license by companies unrelated to the companies who own the brand.

== Reasons for licensing ==
A company may choose to license its brand(s) when they believe there is strong consumer acceptance for [[brand extensions]] or products.

Apart from benefits to licensors, there are benefits to licensees as well. Licensees lease the rights to a brand for incorporation into their [[merchandise]], but do not share ownership in it. Having access to major national and global brands, and the logos and trademarks associated with those brands, gives the licensee significant benefits. The most important of these is the marketing power the brand brings to the licensee's products. When brand managers enter or extend into new product categories via licensing they create an opportunity for a licensee to grow their company. Below is an example of the licensed product process steps:
* Licensor chooses the product categories to be licensed  
* Licensor finds and negotiates a license with the best licensees  
* Licensees develop concepts, prototypes and final production samples and submit for approval  
* Licensor approves licensed products for sale  
* Licensees sell licensed products to authorized retailers

Licensees expect that the license will provide them with sales growth. This sales growth may be in the form of growth within existing market or the opportunity to enter a new market. To achieve this, licensees expect that the brand they are licensing has significant brand preference, that it will open doors and ultimately help them meet or exceed their business objectives. The licensing contract forces the licensee to achieve certain sales targets and royalties; therefore, the goal of the licensee is to quickly meet their business objectives, thereby achieving their contract obligations. [[Royalties]] are the money paid to a licensor by the licensee for the right to use the licensed property. It is calculated by multiplying the Royalty Rate by the Net Sales.<ref name="Atlanta Business Radio">((Cite web|url=https://businessradiox.com/podcast/atlantabusinessradio/atlanta-business-radio-interviews-swine-flu-expert-dr-elaina-george-brand-licensing-expert-pete-canalichio-and-batteries-plus-owner-john-cyphers/|title=Atlanta Business Radio Interviews Swine Flu Expert Dr Elaina George, Brand Licensing Expert Pete Canalichio and Batteries Plus Owner John Cyphers |date=November 18, 2009|website=Business RadioX))</ref>

== Global brand licensing industry ==

The main international [[professional association]] for brand licensing is the [[Licensing Industry Merchandiser's Association]], which sponsors the annual Licensing International Expo.

Each May, ''License! Global'' magazine publishes an annual list of "The Top 150 Global Licensors". For 2017, the leader was [[Disney Consumer Products]] with $53 billion in retail sales of licensed merchandise, followed by [[Meredith Corp.]] with $23.2 Billion and [[PVH (company)|PVH]] with $18 Billion.<ref>((cite news|last=Anonymous|title=Top 150 Global Licensors|url=http://www.licensemag.com/license-global/top-150-global-licensors-3|access-date=2018-03-14|archive-date=2017-04-14|archive-url=https://web.archive.org/web/20170414082257/http://www.licensemag.com/license-global/top-150-global-licensors-3|url-status=dead))</ref>

According to the International Licensing Industry Merchandisers' Association (LIMA), global licensed merchandise sales was $272.2 billion in 2016, versus $262.2 billion in 2015.<ref>((cite news |last=Stone |first=Michael |last2=Ames |first2=Allison |url=http://adage.com/article/agency-viewpoint/licensing-expo-2017-8-trends-263-billion-industry/309209/ |title=8 Trends Ahead for the $263 Billion Licensing Industry |work=[[Advertising Age]] |date=2017-06-01 |access-date=2017-06-01 ))</ref>

In the fashion industry, branded perfumes and cosmetics are often produced under license.<ref>((Cite web |date=2021-05-15 |title=Licensed Fragrances Show Their Strength |url=https://licensinginternational.org/news/licensed-fragrances-show-their-strength/ |access-date=2023-11-16 |website=Licensing International |language=en-US))</ref> For example, [[L'Oréal|L'Oreal Group]] holds the fragrance and beauty licenses for [[Yves Saint Laurent (fashion house)|Yves Saint Laurent]], [[Armani|Giorgio Armani]], [[Valentino (fashion house)|Valentino]], [[Prada]], [[Ralph Lauren Corporation|Ralph Lauren]], and more.<ref>((Cite web |title=L'Oréal Group : Our Global Brands Portfolio |url=https://www.loreal.com/en/our-global-brands-portfolio/ |access-date=2023-11-16 |website=www.loreal.com))</ref>

=== Brand licensing in South Korea ===
Han Chang-Wan, a professor at [[Sejong University]], published the history of animation character design in Korea at the Character Licensing Fair 2016. This study became the first to have rabbit and turtle illustrations as Korean animated characters. This was revealed in ''[[Tongnip Sinmun|The Independent]]'' newspaper.<ref>Gu, Jungmo (2016-07-14). [https://www.msn.com/ko-kr/news/other/%ED%95%9C%EA%B5%AD-%EC%BA%90%EB%A6%AD%ED%84%B0-%EB%B3%80%EC%B2%9C%EC%82%AC%EB%A5%BC-%EC%82%B4%ED%94%BC%EB%8B%A4%E2%80%A6%EC%BA%90%EB%A6%AD%ED%84%B0%C2%B7%EB%9D%BC%EC%9D%B4%EC%84%A0%EC%8B%B1-%ED%8E%98%EC%96%B4/ar-BBujYiL "한국 캐릭터 변천사를 살피다...'캐릭터·라이선싱 페어'"] [The history of Korean character...'Character·licensing fair']. MSN.</ref>

With American and Japanese characters dominating the Korean animation industry until the 1970s, it was not until 1983 when [[Dooly the Little Dinosaur]] (아기 공룡 둘리) appeared in Bomulsum—a monthly magazine for kids—and changed the Korean character market.<ref>Korean Ministry of Trade, Industry and Energy, Official blog (2013-04-19). [http://blog.daum.net/mocie/15613209 "황글알을 낳는 거위! 떠오르는 '한국 캐릭터 산업'"] ((Webarchive|url=https://web.archive.org/web/20221209104322/http://blog.daum.net/mocie/15613209 |date=2022-12-09 )) [The golden goose! Growing Korean character industries]. Korean Ministry of Trade, Industry and Energy.</ref> In 1987, Dooly the Little Dinosaur first aired as a six-part TV show, with another seven parts airing in 1988. In 1995, [[Kim Soo-jung]], its creator, established a company named 'Dooly World' and went into the character design industry. The following year, the animated movie '[[Dooly the Little Dinosaur]]' was released. In the 30 years since Dooly the Little Dinosaur launched, its related market generated 2–3 billion [[South Korean won|won]] per year (about 1.7–2.7 million dollars as of July 2018). This paved the way for the character market in Korea.<ref>No, Jawoon (2013-05-01). [http://biz.chosun.com/site/data/html_dir/2013/04/30/2013043002012.html "'둘리' 이후 30년...캐릭터 시장 규모 8조원 육박'"] [30 years after 'Dooly'... The size of Character market is closing in upon 8 trillion won]. Chosun Biz.</ref>

== References ==
((Reflist))
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[[Category:Brand management]]
[[Category:Intellectual property law]]

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