Sub-licensee

A sub-licensee is an individual or entity that has been granted a sub-license by a licensee. A sub-license, in turn, grants the sub-licensee the right to utilize or distribute specific intellectual property, technology, or a service that the licensee already possesses the rights to. This arrangement allows the licensee to extend the reach of their assets while potentially earning royalties or fees. Sub-licenses are commonly used in industries like software, music, and franchising to broaden the market penetration of intellectual property or services without directly handling all aspects of distribution or use.

Sub-licensee meaning with examples

• The software company, the licensee, granted a sub-license to a smaller firm, the sub-licensee, to integrate their application into a specific mobile device platform. This allowed the licensee to expand its software’s reach without the direct costs of developing a platform-specific version. The sub-licensee gained a valuable application to offer users.
• A major music label, acting as the licensee, granted a sub-license to an independent record store chain, the sub-licensee, enabling them to sell digital downloads of their artists' music. The sub-license allowed the label to extend its distribution network and royalties, giving customers convenient access while limiting risk.
• A global fast-food franchise (licensee) granted a sub-license to a local entrepreneur (sub-licensee), permitting them to operate a specific restaurant within a designated territory, adhering to the franchise’s standards. The licensee gains profits through royalties. The sub-licensee gains market share through a recognised brand and the structure of the franchise
• A company holding a patent (licensee) granted a sub-license to a manufacturing firm (sub-licensee), enabling them to produce and sell products incorporating the patented technology. This arrangement facilitated broader commercialization and market penetration. The sub-licensee benefitted from the right to manufacture and make a profit.