Font licensing is the permission, bought from the company that owns a font, to use that font in a business's designs, website, app or packaging. A font is not free just because it is installed on a computer. It is software, and the company that made it decides, in a licence, where and how it may be used.
First, two terms. A typeface is the design of a set of letters, such as a rounded or a narrow style. A font is the computer file that holds that design, in one weight such as bold or italic. Large font companies own libraries of thousands of typefaces. They also draw custom lettering, a typeface made for one brand alone, often to match its name and logo.
A font licence is not one permission. It is a set of separate permissions, each for one use. A desktop licence lets a number of computers install the font, so designers can use it. A web licence lets a website load the font in visitors' browsers. It is usually priced by the number of page views each month. An app licence lets the font be built into a mobile app. Further licences cover advertisements, e-books and television. Using a font beyond what the licence covers is a breach of the licence, and font companies do check websites and apps for this.
Say a snack brand in Kolkata redesigns its packs. It chooses a typeface that has Bengali, Devanagari and Latin letters, because its packs are printed in three scripts. Indian scripts are harder to design than Latin. They have conjuncts, letters that join to form a new shape, such as क्ष. So a typeface with good Indian-script fonts is worth paying for. The brand buys a desktop licence for its 8 designers, a web licence for up to 5 lakh page views a month, and an app licence for its ordering app. The total comes to about ₹3 lakh a year. When the pack artwork goes to the printer, the letters are turned into plain shapes in the file. So the printer does not need a licence of its own.
The pack itself is designed in packaging design software, and the brand's other designs in graphic design software. Font files can also be protected by digital rights management, which limits who can open or copy a file.
A font licence is a fee to use a design. It is not a share of sales. Semiconductor IP licensing works differently: a chip company pays a fee to start using a design, and then a small royalty on every chip sold. Brands that print a QR code on the same pack track the scans through connected packaging.