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How to Set Royalty Rate of  Intellectual Property;Intellectual Property Valuation;Technology Transfer;Licensing Strategies;MTA;Venture Agreements;Medical Devices;Pharmaceuticals

 

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What is the "right" Royalty Rate for your new technology, product?


Unless you have the required competence, we recommend that you hire an expert who could help you with the following:
 

  • Establish, quantitatively or semi-quantitatively, how well your technology fits into the prospective company's strategic plan. This requires complete understanding of current market size and its trend, competitive situation, environmental and regulatory trends, the strength of your patented (?) technology or other barrier to entry, the prospective company's return on investment (ROI.)  
  • Establish the relative ease for transforming your technology into a manufacturable product. 
  • Establish the customer's acceptance of your new product. Be careful if it requires major user re-educating or is quite a bit ahead of its time. 
  • Remember that royalty rates will be significantly higher if your technology is in the pharmaceuticals, biotech markets and much lower if it is aimed at highly cost competitive markets (mass production businesses with practically no entry barriers.) 
  • Recognize that today the life cycle of every product has been severely compressed, especially in hot, highly competitive markets. 
  • You should have as goal to receive a royalty rate in the one to five percent (1 to 5) % range of annual sales. That is our experience, but every situation is different.

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403 Christie Ct., Stewartsville, NJ 08886 USA
Costas B. Chantzis, CEO 


Tel.: 908.387.9276
Fax: 908.387.0447  Email
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Home
Who We Are
Unique Strengths
Our Services
Projects Resume
Your Next Step
Write Us
What's New
Articles
Ask SolvWizSM For FREE 

TechnoBusiness Solutions
403 Christie Ct., Stewartsville, NJ 08886 USA
Costas B. Chantzis, CEO 


Tel.: 908.387.9276
Fax: 908.387.0447  Email
Home