Royalty Authority
Your licensing negotiations are progressing in a positive direction. The presumptive licensee is impressed with your technology. Their patent analysts believe your patents were well-drafted, have early priority dates and a low prior art risk.
However, at this advanced hour in the negotiations, the royalty rate has not yet been negotiated. You need a credible royalty report…now.
Fortunately, you are now welcome to order a Royalty Authority Report. This authoritative report, created by the developer of the Certified Patent Valuation Analyst designation, will be delivered directly to your email within two working days.
Patentees usually wish to monetize their patents. Acquiring patents is great, but there is low visibility into the long-term benefits of commercializing patents. On the other hand, acquiring patents is fraught with risks such as:
- Invalidity attacks erupting at any moment.
- Damaging prior art popping up.
- Inaccurate inventorship can be revealed.
- Chinks in the chain of title can emerge
Licensing agreements enable licensors and licensees to share the benefits of commercialization efforts long into the future. But royalty rates must be set at the outset of the licensing agreement, which is no easy task.
- Licensors want to ensure they are fairly compensated for their years of hard work and investment.
- Licensees may struggle to afford a high royalty rate, which can hinder the commercialization of the patented product, force pricing adjustments that drive products out of the market or motivate designing around the patents.
Patent licensing negotiations are high-stakes events. One percentage point swing in the royalty rate could mean millions of dollars shifting from one side of the table to the other over the ensuing years. Even friendly licensing discussions can engender angst.
Thus, having a renowned third-party provide an objective assessment of a fair royalty rate could reduce tension, keep the licensing negotiations from derailing, and contribute to a long-term, accretive relationship between the licensor and the licensee.
Many deal-makers seek to establish royalty rates based on precedential licensing agreements. This is a great idea—in theory. Several royalty rate databases exist to fulfill this purpose, and some have great user interfaces. Users can search based on a variety of metrics. And the results are presented in attractive formats and can be quickly exported into Excel.
However, there are significant shortcomings with these royalty rate databases:
- Outdated Records: The average age of agreements in these databases must be about 15 years old. We’re not joking.
- Inadequate Matches: Finding precedential technologies that even remotely map to your technology is rare. Patents must reflect unique inventions, making it challenging to find statistically significant precedential transactions.
A consistent comment from over 120 sessions of the Certified Patent Valuation Analyst program around the world over the past 15 years is, “Where can we quickly obtain good quality royalty rate reports?” We have listened to the patent community, which is why we have been hard at work developing Royalty Authority over the past few years.
The algorithms driving Royalty Authority are a matter of trade secret protection. However, many lessons imparted during the Certified Patent Valuation Analyst training are baked into our proprietary methodologies. Additionally, in view of the importance of generating up-to-the-moment results, we incorporate stock market activity, such as the performance of industry groupings corresponding to the intended field-of-use licensing.
Obtaining a Royalty Authority report is as easy as can be. Just answer a few questions, such as your name, the patent numbers, and the intended fields of use. We also have sliders that you can use to convey issues such as the degree of:
- Exclusivity
- Apportionment
- Patent strength
- Novelty of the technology
- Non-patent rights conveyed in the transaction
- Upfront fees and milestone payments
Royalty Authority customers receive a handsome report stating the fair royalty rate and likelihood of securing a licensing agreement within 48 working hours of placing their orders.