Royalty Rates for Technology 4th Edition
By Russell L. Parr
Published by Intellectual Property Research Associates, Inc.
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Royalty Rates for Technology 4th Edition reports all available compensation terms for the license agreements we discovered. We report fixed royalty rates, per unit royalties, scaled royalty rates, and license fees. For each transaction in this book we report:

• A description of the licensed technology
• Compensation terms including royalty rates and license fees
• Identity of the licensor and licensee
• For many deals, we also discuss the markets for and benefits of the licensed technology

In addition to royalty rates from real deals, we provide:

• Royalty Rate Derivation Models, showing different methods for calculating appropriate royalty rates.
• Royalty Audit advice to assure compliance with license agreements and the accurate collection of royalty payments.

Real Deal Royalty Rates
This fourth edition of Royalty Rates for Technology contains more information about technology pricing than in any other publication. This book represents nearly two decades of research. Included in these pages you will find information about technology royalty rates, license fees and milestone payments. Also reported is information about infringement damage awards and settlements.

Royalty Rate Chart
As you review the information contained in this book it will become apparent that the most frequently negotiated royalty term is 5% of sales. Especially interesting is that the 5% royalty rate is found across a diverse number of industries including automotive, chemical, communications, computers, defense, energy, electronics, food, franchises, glass, household products, mechanical, medical, photography, sports, toys and waste treatment. The chart below summarizes royalty rates across all the industries covered in this book. The royalty range from 0.50% to 40% of sales, are grouped by rate and then graphed by the frequency of their appearance. Excluded from this chart are instances where royalty rates are specified on a per unit basis.

License Fees Chart
In 20% of the license deals we discovered, compensation to the licensor also includes an up-front license fee. Sometimes these fees are meant to cover the licensor’s costs for transferring the patents and technical know-how to the licensee. But, sometimes these fees are substantial. The pie chart below shows a distribution of up-front license fees.

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This publication is designed to provide accurate and authoritative information about the subject matter covered. All of the information in this report has been obtained from reputable and reliable sources and is therefore believed to be accurate. The publisher accepts no responsibility for any damages that any party may experience from relying on the information presented herein.

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