Final answer:
Harley-Davidson's agreement with Portland Clothing is a licensing arrangement, where Portland Clothing is permitted to use the Harley logo on jackets in exchange for a licensing fee or royalties.
Step-by-step explanation:
When Harley-Davidson allows Portland Clothing to use its logo on the jackets that the latter company makes and sells, this forms a licensing arrangement. Licensing is a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. This arrangement typically involves a licensing fee and/or royalties based on sales.
In this case, Portland Clothing is granted the rights to use the Harley-Davidson logo, which is a recognized trademark. Portland Clothing is able to produce and sell Harley-branded apparel, and in exchange, Harley-Davidson receives a financial benefit without having to manufacture the apparel themselves. This allows Harley-Davidson to extend its brand reach and generate revenue through licensing fees.