Certified Professional Contract Manager (CPCM) Practice Exam

Licensing in contract management specifically refers to the arrangement where one party (the licensor) allows another party (the licensee) to use, manage, or exploit a certain product, service, or technology under specified conditions without transferring ownership. This allows the licensee to utilize the intellectual property or technology while the licensor retains ownership.

This arrangement is often utilized in various sectors, such as software, pharmaceuticals, and entertainment, where the licensor may have developed a valuable product or technology and wants to generate revenue through its use while still retaining rights to the original. Licensing agreements can include various terms and conditions that dictate how the technology can be used, who can use it, and any royalties or fees to be paid for that access.

The other options do not capture the essence of licensing. Transfer of ownership rights would involve a sale or a transfer agreement rather than simply licensing use. Selling goods without restrictions does not relate to the control or ongoing ownership typical of licensing. The creation of new patents pertains to the invention and patenting process rather than the use of existing technologies or products under a licensing agreement.