Which statement correctly differentiates licensing and merchandising?

• A. Licensing grants permission to produce products using IP.
• B. Licensing is the actual sale of products bearing the IP.
• C. Merchandising grants permission to produce products using IP.
• D. Both licensing and merchandising involve IP and are the same.

Answer: (A)

Licensing is about granting rights to use a property’s IP to create products. This permission is set out in a contract and covers what can be made, where, for how long, and under what terms. Merchandising, by contrast, is about the marketing and sale of those products bearing the IP—promotion, distribution, and retail—after production rights have been granted. So the statement that licensing grants permission to produce products using IP is the correct differentiation. The other ideas mix up production rights with sales or treat them as the same thing.