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Determination of Royalty Rates for Technology Licensing

Determination of Royalty Rates for Technology Licensing Royalty rates are at the heart of this book, providing a comprehensive review of surveys, data analysis, rules of thumb, profit differential methods and discounted cash flow analysis for determining an appropriate royalty rate for technology. This book also provides guidance about the impact associated with exclusivity, minimum royalty payments, upfront license fees, naked patents, and royalty rates for trade secrets. The book ends with an example of how to determine a royalty rate for a specific technology. The methods in this book are not just for licensing negotiations. They can also be used for valuing technology and establishing patent infringement damages.


ROYALTY RATE BASICS
5% OF SALES IS THE MOST COMMON ROYALTY RATE
FORCES DRIVING ROYALTY RATES
ROYALTY RATE GENERAL GUIDANCE
INSUTRY NORM ROYALTY RATES
THE "25%" RULE
RETURN ON R&D COSTS
THE 5% OF SALES METHOD
THE ANALYTICAL APPROACH
COMPARABLE LICENSE TRANSACTIONS
NAKED PATENTS
PATENTED VERSUS UNPATENTED TECHNOLOGY
MINIMUM ROYALTIES
UPFRONT LICENSE FEES
EXCLUSIVITY
ROYALTY BASE
DISCOUNTED CASH FLOW ANALYSIS
DTERMINING A ROYALTY RATE – AN EXAMPLE
ROYALTY RATE REFERENCES

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