Introduction to royalties and licence fees

This resource outlines some of the issues that arise when negotiating an IP licence fee, and some potential solutions to those issues.

Resource  \  27 Sep 2017

Often when negotiating an IP licence, it can be difficult to know what the payments should be, or how they should be calculated. To avoid simply guessing a figure, it’s best to apply a royalty valuation methodology.

Most IP licences will state that the licensee will pay one or more of the following:

  • an up-front licence fee 
  • ongoing lump sum licence fee payments 
  • rolling royalties.

This information sheet provides a brief summary of the issues that arise when negotiating royalties and licence fees, and some potential solutions to those issues.