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Tên tư liệu Establishing Royalty Rates in Licensing Agreements - Howard E. Johnson
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Manufacturers possessing proprietary technology, know-how or ‘brand value’ in their products and who are looking to expand their operations sometimes consider licensing. Pursuant to a licensing arrangement, the Licensor typically offers a Licensee the right to produce and distribute the Licensors’ products for a defined period in exchange for a royalty. Licensing arrangements frequently are associated with international expansion efforts, where the Licensor does not have the resources to penetrate a new market on its own, and therefore finds a ‘partner’ that is familiar with, and has an established infrastructure in the territory. From the standpoint of the Licensee, a licensing arrangement can provide it with access to proprietary technology and other intangible benefits that would otherwise be difficult, costly, or in the case of patented products, impossible or impractical to develop on its own.
The first issues that normally arise in discussions between the Licensor and Licensee when negotiating a new licensing arrangement or modifying an existing arrangement are the terms of the license agreement and the amount and structure of the royalty payment. These issues are directly interrelated. This article examines various factors that normally should be taken into account when establishing an appropriate royalty rate, including the related provisions frequently found in license agreements.

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