A licence is a legal agreement in which the owner of intellectual property (IP) allows another party to use it. The owner of the intellectual property is the licensor, and the party receiving permission is the licensee. Licences may involve different types of intellectual property such as patents, copyright and know-how.

Licensing IP to an existing company is the most common choice. Often a licence is bundled with other agreements, such as a research contract or consultancy, which further develops the IP.

Generally Monash grants a licence for a specific piece of IP in return for a 'consideration'. A consideration may be payments, annual technical or commercial milestones, and/or royalties from sales by the licensee. The University sometimes chooses to form a spin-out company. In these cases the consideration may include equity in the company.

The IP, the business model, the needs of the licensee and other market forces determine licence structure. Taking into account all these factors results in the best outcomes for Monash and the licensee.