Stick licensing is the practice of licensing a patent

Patent

A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

 or other form of intellectual property where the patent holder threatens to sue the licensee for patent infringement

Patent infringement

Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...

if the licensee does not take a license. In contrast to the stick licensing, the "carrot licensing" is a "friendly approach in luring the target to adopting one's invention and taking a license".