Open to org that can exercise control over their intellectual property rights. Under license, patent-holder normally retains intellectual property rights over technology but allows licensee to use technology in products or services it develops, in return for a loyalty fee. For example, licensing agreements usually include a minimum level of return, licensee is guaranteed to receive. However, exact financial returns will vary according circumstances.
Licensees will typically be those that posses assets the owner of the technology does not have such as:
1) Knowledge
Might be market knowledge, resulting from substantial market presence or result of experience working in a particular market. Take long time to acquire, not easily assimilated through learning. Therefore, may be better to grant license to someone who has this kind of knowledge
2) Access to finance
Some form of long term capital since this is what the innovation is likely to require.
3) Motivation
Would need the motivation to carry out the innovation themselves. Innovation is a long and difficult process and requires necessary motivation to see it all the way through.
Exploiting proprietary technology externally through licensing depends on factors
1) Complementary assets in production and marketing
2) Transactions costs associated with complementary assets
3) Competition in the final product market