The exploitation of intellectual property (IP) holds no boundaries. Just as stylised branding can generate royalties for brand owners when applied to toys, games and other consumer products, so too can that innovative technical step, whether forming part of specific hardware technology applications or as software programming.
Developing the technology and then protecting it, either via patents or otherwise, is an acknowledged major step, but so too is the task of ensuring that the technology owner receives its just financial rewards for subsequent exploitation of the IP in the market place.
There may well be a number of rightful participants in these revenue streams, so how does one ascribe value to each?
The answer is that all of this should be carefully defined and enshrined within the Licence Agreement between the Licensor (and/or the IP owner) and the Licensee so that the correct attributable value can be assigned for royalty purposes.
We deal with a range of such technologies, whether a simple one-way valve incorporated into a larger machine or a microscopic component embedded into an integrated circuit chip that contains forty other components already. By contrast, the IP could take the form of software, itself incorporated into a larger software package.
Exploitation can take place internationally via an array of licensees and distributors. The accounting involved in order for the licensee to produce the royalty statements may be complex and our experience tells us that, in the vast majority of cases, our technology royalty audits discover and quantify significant under-reporting of royalties. Some of this may be due to clerical error, but often it is because of contractual misinterpretation or the lack of flexibility within the licensees accounting systems to accommodate the contractual requirements. The message is clear whichever technology is involved, it pays handsomely to audit.