If you are considering granting your intellectual property or becoming a licensee, you must be familiar with licensing agreements. A company`s licensing agreement is a central element of any licensing agreement and ensures that both parties are properly compensated for their contributions. In this article, we explain what a licensing agreement is and give you an example of when it could be used. At the end of this page, you can download a license agreement so you can see an example of what is included in a license agreement and how it is designed. The mechanical licence rate paid to the publisher in Europe is about 6.5% on the price published to the distributor (PPD). [43] The synchronization licenses are due to the composer/songwriter or his publisher. They are strictly contractual and vary greatly in quantity, depending on the subjective importance of the music, the type of production and the media used. The royalties to be paid are those of mutual acceptance, but they depend on industry practice. In 2002, during a review of 458 licensing agreements over a 16-year period, the Licensing Economics Review found an average royalty of 7% with a range of 0 to 50%. [15] [16] All of these agreements may not have been “long guns.” As part of the licensing negotiations, companies could deduct royalties for the use of patented technology from the retail price of the product licensed downstream. [17] Where a performance with the composer/songwriter is in common, as in a piece of music, they share royalties. Not all royalties go directly to the writer.

On the contrary, it is shared with the publisher on a 50:50 basis. All publishing fees are paid by the publishing house that sets an author`s royalties, except in rare cases where the author can claim large advances and royalties. There are three general approaches to assessing the applicable fee rate for IP licensing. They are the two tables presented below, which are selectively extracted from information available from an IP-related organization and online. [75] [76] The first shows the scope and distribution of royalties in the agreements. The second shows royalty records in certain technology sectors (the latter are extracted from Dan McGavock of the IPC Group, Chicago, USA). Development costs and risks are not taken into account. The licence rate is calculated by comparing competing or similar technologies in a sector that are modified by a reflection on the useful “residual life” of technology in this sector and by contractual elements such as exclusivity rules, exclusivity rights, usage restrictions, geographic restrictions and the associated “technological bundle” (mix of patents, know-how, trademark rights, etc.). Economist J.

Gregory Sidak explains that comparable licenses, if selected correctly, “show what the licensee and the licensee consider to be fair compensation for the use of the patented technology,” which “most accurately represents the price a licensee would be willing to pay for this technology.” [73] The federal circuit has repeatedly confirmed that the comparable approach to the market is a reliable method of calculating a reasonable licence fee. [74] The processing of mechanical royalties in the United States is very different from international practice.