Question

Which of the following is NOT true about licensing? a. The license fee could be based on a percentage of final sales revenue of the product, or the number of units sold. b. Unscrupulous licensees have been known to manufacture licensed products and sell them under different brand names. c. When a product is licensed, the foreign partner will use the licensor’s patented technology as agreed to manufacture and sell products that meet the licensor’s standards. d. Licensing is the practice in which a company or individual provides the foreign partner with the technology to manufacture and sell products or services in a target country for an annual fee e. It involves slightly more risk to the licensee than licensor.

Answer 1

Answer:

The option that is not true about licencing is E) It involves slightly more risk to the licensee than licensor.

Explanation:

Licensing is a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. Licensing generally involves allowing another company to use patents, trademarks, copyrights, designs, and other intellectual in exchange for a percentage of revenue or a fee.

Usually, It is the licensor that that bears more risk. For instance, unscrupulous licensees have been known to manufacture licensed products and sell them under different brand names in order to tamper with the royalty payable to the licensor.