Royalty Rates and Valuation

Determining Royalty Rates

When a property owner is ready to license their intellectual property, licensing contracts will need to be drafted. These contracts will contain various provisions regarding the marketing, distribution and sale of the property, such as the duration of the agreement, how the product can be used, any usage restrictions, warranties, indemnification and clauses covering liability and other issues. A license agreement will also contain terms regarding the payment of royalties resulting from any sales. Establishing royalty rates often involves the valuation of the IP and the economic advantage secured by the licensee from the license. Some of the ways in which royalty rates are determined include:

• Market studies and analysis
• The costs involved in producing the product
• Expected income from sales of the product

Grimes LLC is a highly regarded intellectual property law firm with clients throughout the world. We have developed an international reputation for excellence in this specialized field of law, and have significant experience in licensing. Our firm can prepare your license contracts and help you establish royalty rates and valuation of your intellectual property. Contact an Intellectual property attorney from our firm for legal advice and representation when valuation and royalty rates are at issue.

Determining royalty rates and intellectual property valuation is critical to the licensing process. Attorneys at our office are skilled legal professionals that can give you the guidance needed in this regard when drafting a license agreement.