1) A strategy or practice of granting contractual permission to use intellectual property rights such as patents, trademarks, or knowhow during a specified time period in a given geographic area. It may go sideways (competitors), upstream (vendors), or down stream (customers, resellers). A way one firm gains the right to use the creations of another. It may be exclusive or nonexclusive.
2) A method of entering a foreign market in which the company enters into an agreement with a licensee in the foreign market, offering the right to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.