Make sure the correct currency is selected, and then select the Required authorization box if a license fee needs to be approved before demarcation or payment. The part of the head defines the terms of the agreement: how often the royalties are calculated for payment, to the seller the royalty is paid, whether the royalty is based on the amount or quantity, the data and whether an authorization is required. Optionally, a list of items can also be assigned at the head level. This question explains how license agreements are defined and implemented. A royalty is a royalty that one party (licensee) pays to another party (licensor) for the use of intellectual property, including logos or copyrights. For example, Fabrikam sells t-shirts with a small logo on the sleeve. The logo belongs to Contoso.