A license allows you to use the intellectual property of someone else or vice versa. INC explains licensing agreements can come in handy if you wish to capitalize on something someone else owns. For example, it would be financially beneficial to sell items featuring Disney characters because they are so popular and such items often sell well.
However, a licensing agreement can be restrictive and it involves quite a bit of legal work. You may not want to mess with it. The problem is if you do not get a licensing agreement when you should have one, you could face legal trouble or end up losing a lot of money. So, it is in your best interests to understand when you do and do not need one.
Your intellectual property
If it is your intellectual property at the heart of the situation, you have every right to make the decision on whether you need an agreement or not. What you want to keep in mind is that not requiring a licensing agreement allows others to use your property as they wish with no restrictions. You also cannot earn any money without an agreement.
If you do not care about those things, then you could skip the agreement.
Others’ intellectual property
When it comes to the property of other people, you do not have a say in whether there is a licensing agreement. That is the sole decision of the owner of the intellectual property.
If you fail to get an agreement, the owner could sue you for infringement.
In general, when it comes to using intellectual property, it is almost always best to secure a licensing agreement regardless of the circumstances because of the protection it offers to both parties.